Regulatory, Ethical, and Compliance Issues in EC.

Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Regulatory, Ethical, andCompliance Issues in EC


1. Understand the foundations for legal and ethical issues in EC.

2. Describe civil, intellectual property, and common law.

3. Understand legal and ethical challenges and how to contain them.

4. Explain privacy, free speech, and defamation and their challenges.

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5. Describe types of fraud on the Internet and how to protect against them.

6. Describe the needs and methods to protect sellers.

7. Describe EC-related societal issues. 8. Describe Green EC and IT.

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• intellectual propertyCreations of the mind, such as inventions, literary and artistic works, and symbols, names, images, and designs, used in commerce

• LAWS ARE SUBJECT TO INTERPRETATION

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• THE LAW: A SYSTEM FOR SOCIAL CONTROL AND PROTECTION– due process

A guarantee of basic fairness and fair procedures in legal action

– rightLegal claim that others not interfere with an individual’s or organization’s protected interest

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• THE LAW: A SYSTEM FOR SOCIAL CONTROL AND PROTECTION– protected interests

Interests, such as life, liberty, and property, which a national constitution protects.

– dutyLegal obligation imposed on individuals and organizations that prevents them from interfering with another’s protected interest or right

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• PERSONAL AND PROPERTY RIGHTS– Rights are divided into two categories: personal

rights and property rights• Generally, the interests of life and liberty fall into the

personal rights category• The major property rights relevant to EC and Web sites

are:1. Control of the use of the property2. The right to any benefit from the property3. The right to transfer or sell the property4. The right to exclude others from the property

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– civil litigationAn adversarial proceeding in which a party (the plaintiff) sues another party (the defendant) to get compensation for a wrong committed by the defendant

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• REGULATORY COMPLIANCE IN EC– regulatory compliance

Systems or departments in an organization whose job is to ensure that personnel are aware of and take steps to comply with relevant laws, standards, policies, and regulations

– compliance dataPertaining to enterprise included in the law that can be used for the purpose of implementing or validating compliance

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• CRIMINAL LAW AND CIVIL LAW– Characteristics of Criminal and Civil Laws• crime

Offensive act against society that violates a law and is punishable by the government• criminal laws

Laws to protect the public, human life, or private property• statutes

Rules that define criminal laws

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– civil lawsLaws that enable a party (individual or organization) that has suffered harm or a loss to bring a lawsuit against who is responsible for the harm or loss

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• intellectual property lawArea of the law that includes patent law, copyright law, trademark law, trade secret law, and other branches of the law such as licensing and unfair competition

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– copyrightAn exclusive right of the author or creator of a book, movie, musical composition, or other artistic property to print, copy, sell, license, distribute, transform to another medium, translate, record, perform, or otherwise use

– infringementUse of the work without permission or contracting for payment of a royalty

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– digital rights management (DRM)An umbrella term for any of several arrangements that allow a vendor of content in electronic form to control the material and restrict its usage• fair use

The legal use of copyrighted material for noncommercial purposes without paying royalties or getting permission

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– patentA document that grants the holder exclusive rights to an invention for a fixed number of years

– trademarkA symbol used by businesses to identify their goods and services; government registration of the trademark confers exclusive legal right to its use

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• COMMON LAW IN E-COMMERCE– common law (case law)

Law created by judges in court decisions– tort

Civil wrong that can be grounds for a lawsuit

• FAN AND HATE SITES– cyberbashing

Domain name that criticizes an organization or person

• OTHER E-COMMERCE LEGAL ISSUES

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• ethicsThe branch of philosophy that deals with what is considered to be right and wrong

• privacyThe right to be left alone and free of unreasonable personal intrusions

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• business ethicsA form of applied ethics that examines ethical principles and moral or ethical problems that arise in a business environment

• EC ETHICAL ISSUES– Non–Work-Related Use of the Internet– Codes of Ethics

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• PRIVACY RIGHTS AND PROTECTION– opt-out

Business practice that gives consumers the opportunity to refuse sharing information about themselves

– opt-inAgreement that requires computer users to take specific steps to allow the collection of personal information

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• FREE SPEECH ONLINE VERSUS PRIVACY PROTECTION– Children’s Internet Protection Act (CIPA)

Law that mandates the use of filtering technologies in schools and libraries that received certain types of U.S. federal funding

– legal precedentA judicial decision that may be used as a standard in subsequent similar cases

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• THE PRICE OF PROTECTING AN INDIVIDUALS’ PRIVACY

• HOW INFORMATION ABOUT INDIVIDUALS IS COLLECTED– Web Site Registration– Cookies– spyware

All unwanted software programs designed to steal proprietary information, or that target data stores containing confidential information

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– RFID’s Threat to Privacy– Other Methods• Site transaction logs• EC ordering systems and shopping carts• Search engines• Behavioral targeting• Polling and surveys• Payment information and e-wallets

– Privacy of Employees

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• PRIVACY PROTECTION BY INFORMATION TECHNOLOGIES

• PRIVACY ISSUES IN WEB 2.0 TOOLS AND SOCIAL NETWORKS– Presence, Location, and Privacy– Free Speech via Wikis and Social Networks

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• PRIVACY PROTECTION BY ETHICAL PRINCIPLES– Notice or awareness– Choice or consent– Access or participation– Integrity or security– Enforcement or redress• Online Privacy Clarification

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• THE USA PATRIOT ACT– Platform for Privacy Preferences Project (P3P)

A protocol allowing Web sites to declare their intended use of information they collect about browsing users

• PRIVACY PROTECTION IN COUNTRIES OTHER THAN THE UNITED STATES

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• CONSUMER (BUYER) PROTECTION– Representative Tips and Sources for Your

Protection– Third-Party Assurance Services– Computer Fraud and Abuse Act (CFAA)

Major computer crime law to protect government computers and other Internet-connected computers

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• SELLER PROTECTION– What Can Sellers Do?

• PROTECTING BUYERS AND SELLERS: ELECTRONIC AND DIGITAL SIGNATURES– electronic signature

A generic, technology-neutral term that refers to the various methods by which one can “sign” an electronic record

– Authentication and Biometric Controls

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• digital divideThe gap that has emerged between those who have and those who do not have the ability to use the technology

• electronic discovery (e-discovery)Discovery in civil litigation that deals with information in electronic format; also referred to as electronically stored information (ESI)

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• Green computingThe study and practice of eco-friendly computing resources; is now a key concern of businesses in all industries—not just environmental organizations

• Green ITGreen IT begins with manufacturers producing environmentally friendly products and encouraging IT departments to consider more friendly options like virtualization, power management, and proper recycling habits

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• HOW TO OPERATE GREENER BUSINESSES, DATA CENTERS, AND SUPPLY CHAINS

• GLOBAL GREEN REGULATIONS– Electronic Product Environmental Assessment

Tool (EPEAT)A searchable database of computer hardware that meets a strict set of environmental criteria

– The Field of Green Technology and Telecommuting

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• OTHER SOCIETAL ISSUES– Education– Public Safety, Criminal Justice, and Homeland

Security– Health Aspects

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1. What legal and ethical issues should be of major concern to an EC enterprise?

2. What are the most critical ethical issues?3. How can intellectual property rights be

protected when it comes to digital content4. How can patent cost be monitored effectively?5. What is the ethical principle of protecting the

privacy of customers?6. How can a company create opportunities in the

global trend toward Green EC?

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Regulatory, Ethical, and Compliance Issues in EC.

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