Chapter 8: Ethical, Social, and
Political Issues in E-commerce
Chapter 8
Ethics, Law, and E-commerce
Copyright © 2010
2011 Pearson
Pearson Education,
Education, Ltd.
Inc. Slide 8-1
Understanding Ethical, Social, and
Political Issues in E-commerce
Internet, like other technologies, can:
Enable new crimes
Affect environment
Threaten social values
Costs and benefits must be carefully
considered, especially when there are no
clear-cut legal or cultural guidelines
Slide 8-2
A Model for Organizing the Issues
Issues raised by Internet and e-
commerce can be viewed at individual,
social, and political levels
Four major categories of issues:
Information rights
Property rights
Governance
Public safety and welfare
Slide 8-3
Basic Ethical Concepts
Ethics
Study of principles used to determine right and wrong courses of
action
Responsibility
Accountability
Liability
Laws permitting individuals to recover damages
Due process
Laws are known, understood
Ability to appeal to higher authorities to ensure laws applied correctly
Slide 8-4
Analyzing Ethical Dilemmas
Process for analyzing ethical dilemmas:
1. Identify and clearly describe the facts
2. Define the conflict or dilemma and identify the
higher-order values involved
3. Identify the stakeholders
4. Identify the options that you can reasonably
take
5. Identify the potential consequences of your
options
Slide 8-5
Candidate Ethical Principles
Golden Rule
Universalism
Slippery Slope
Collective Utilitarian Principle
Risk Aversion
No Free Lunch
The New York Times Test
The Social Contract Rule
Slide 8-6
Privacy and Information Rights
Privacy:
Moral right of individuals to be left alone, free
from surveillance or interference from other
individuals or organizations
Information privacy
Subset of privacy
Includes:
The claim that certain information should not be
collected at all
The claim of individuals to control the use of whatever
information is collected about them
Slide 8-7
Privacy and Information Rights (cont.)
Major ethical issue related to e-commerce
and privacy:
Under what conditions should we invade the
privacy of others?
Major social issue:
Development of “expectations of privacy” and
privacy norms
Major political issue:
Development of statutes that govern relations
between recordkeepers and individuals
Slide 8-8
Information Collected at
E-commerce Sites
Data collected includes
Personally identifiable information (PII)
Anonymous information
Types of data collected
Name, address, phone, e-mail, social security
Bank and credit accounts, gender, age, occupation,
education
Preference data, transaction data, clickstream data,
browser type
Slide 8-9
Social Networks and Privacy
Social networks
Encourage sharing personal details
Pose unique challenge to maintaining
privacy
Facebook’s Beacon program
Facebook’s Terms of Service change
Slide 8-10
RIP: Facebook’s Beacon
Facebook's advertisement system that sent data
from external websites to Facebook,
allowing targeted advertisements and allowing users
to share their activities with their friends.
Certain activities on partner sites were published to
a user's News Feed.
Born: November 6, 2007 with 44 partner websites.
Dead: September 2009.
Slide 8-11
Profiling and Behavioral Targeting
Profiling
Creation of digital images that characterize online individual and
group behavior
Anonymous profiles
Personal profiles
Advertising networks
Track consumer and browsing behavior on Web
Dynamically adjust what user sees on screen
Build and refresh profiles of consumers
Google’s AdWords program
Slide 8-12
Profiling and Behavioral Targeting (cont’d)
Deep packet inspection
Business perspective:
Web profiling serves consumers and businesses
Increases effectiveness of advertising, subsidizing free
content
Enables sensing of demand for new products and services
Critics perspective:
Undermines expectation of anonymity and privacy
Consumers show significant opposition to unregulated
collection of personal information
Enables weblining
Slide 8-13
The Internet and Government
Invasions of Privacy
Various laws strengthen ability of law enforcement
agencies to monitor Internet users without
knowledge and sometimes without judicial oversight
CALEA, PATRIOT Act, Cyber Security Enhancement Act,
Homeland Security Act
Government agencies are largest users of private
sector commercial data brokers
Retention by ISPs of user data a concern
Slide 8-14
Legal Protections
In U.S., privacy rights explicitly granted or
derived from
Constitution
First Amendment – freedom of speech and association
Fourth Amendment – unreasonable search and seizure
Fourteenth Amendment – due process
Specific statutes and regulations (federal and
state)
Common law
Slide 8-15
Informed Consent
U.S. firms can gather and redistribute
transaction information without individual’s
informed consent
Illegal in Europe
Informed consent:
Opt-in
Opt-out
Many U.S. e-commerce firms merely publish information
practices as part of privacy policy without providing for
any form of informed consent
Slide 8-16
The FTC’s Fair Information
Practices Principles
Federal Trade Commission:
Conducts research and recommends legislation to Congress
Fair Information Practice Principles (1998):
Notice/Awareness (Core)
Choice/Consent (Core)
Access/Participation
Security
Enforcement
Guidelines, not laws
Slide 8-17
