Chapter 5:
Ethical and Legal Issues
Learning Objectives
Overview of Ethics and Legal Issues
Ethics is a general endeavor that takes into account the concerns and values of a
society as a whole. Laws are normally created for broader purposes, with the goal
of addressing national or sometimes international populations. Although there is a
relationship between ethics and legality, they are separate entities that should be
treated as such.
Ethics and Ethical Codes
Ethics have been studied for over 2500 years. The American Marketing
Association’s (AMA) Code of Ethics reflects the commitment to honesty,
integrity, and fairness. Some issues that technology has spawned are:
Privacy
There is much debate concerning what privacy entails. Consumers are apt to give
personal information for benefits that they perceive to be worthwhile – credit
cards, frequent flyer mileage, security precautions, etc. In these cases, ethics and
law attempt to provide guidelines in the final decision by critically examining
definitions, priorities, and implications.
Privacy within Digital Contexts
The Internet uses several different ways to gather information, some of
which may be considered unethical. The AMA determined the
“information collected from customers should be confidential and used
only for expressed purposes.” Cookies are the most common way for
online marketers to obtain customer data. Spyware and adware have
recently been recognized as possible violations of privacy as well.
International Privacy Issues
Digital Property
The legal definition of ownership is being challenged by digital technology.
Intellectual property has traditionally been protected through copyrights,
trademarks, and patents.
Patents
Patents were originally tailored toward industrial or mechanical concerns.
An area of current Internet focus centers on the use of business patents
that describe such activities as marketing approaches and methods for
conducting commerce.
Copyright
Copyright has been established as the primary means of protecting most
expression on the Internet. In 1997, the No Electronic Theft Act (NET
Act) was signed to protect against reproduction or distribution of computer
content. In 1998, the Digital Millennium Copyright Act (DMPCA) was
enacted to protect ISPs. Critics fear that these and other copyright acts will
unfairly favor copyright owners.
Trademark
endeavors: formulas, market data, algorithms, programs, codes, and
models.
Data Ownership
Online Expression
As the spam debate rages on, e-marketers are torn between the inappropriateness
of the practice and the topic of freedom of expression protected by the First
Amendment to the Constitution. One of the biggest disagreements is between
those who believe that participation in mass e-mails should be restricted to those
who voluntarily agree to receive mailings and those who advocate an opt-out-only
approach. The boundaries of expression will continue to be challenged by the
internet.
Emerging Issues
Along with the more conventional problems of online dynamics, a number of
issues are particularly unique to the Internet at its current stage of development.
Online Governance and ICANN
In 1998, the Internet Corporation for Assigned Names and Numbers
(ICANN) was created as a private, non-profit regulatory body responsible
for the administration of Internet names and addresses. This organization
was created to deal with conflicts arising from assignment and possession
of domains, but has failed to satisfy many online users who would prefer
to bypass ICANN and resolve disputes through the legal system.
Jurisdiction
Fraud
Because the average person is not in a position to understand exactly how
information is displayed, transferred, or stored, they may be in a position
Chapter Summary
Ethics is concerned with the values and practices of professionals and
experts as well as the concerns and values of society. Law is also an expression
of values but created for the broader goal of addressing national or even global
populations. Groups of individuals with special skills or knowledge have
established ethical codes over the years. Differing views exist of the role of law
and self-regulation in ethical online behavior.
The notion of privacy emerged during the twentieth century as a key
ethical and legal concern. Key aspects include seclusion, access control, and
autonomy. Online privacy issues in the United States and other countries relate to
Chapter Outline
Opening Vignette: Software Infringement
Have the class read the opening vignette on Software Infringement. Discuss with
the class the piracy issue and if it differs from simply stealing. Has anyone in the
class loaded software on their computer that they did not purchase? The impact
of software piracy is astounding, accounting for over $12 billion in losses in
I. Overview of Ethics and Legal Issues
Ethics is a general endeavor that takes into account the concerns and values of a
society as a whole. Laws are normally created for broader purposes, with the
goal of addressing national or sometimes international populations. Although
there is a relationship between ethics and legality, they are separate entities that
should be treated as such.
A. Ethics and Ethical Codes
2. The American Marketing Association (AMA) Code of Ethics
states a commitment to:
3. Critical issues within the electronic environment
a. Intellectual property (ownership of intangible data)
b. Privacy in a virtual world
B. The Problem of Self-Regulation
What role does the formal law play in the regulation of online
conduct?
1. Proper behavior is typically explained in ethical codes
2. Supporters of self-regulation point to the rapid ability to
3. Critics argue that its incentives are not sufficiently compelling
to deter fraudulent activity unless formal legal action is used.
II. Privacy
Privacy encompasses both ethical and legal aspects, and is relatively new to both
disciplines. Privacy is at the forefront of the legal and ethical debate when
discussing the Internet. Although the topic has been discussed for over 100 years,
privacy has proven to be an elusive concept, both ethically and legally. The basis
of invasion of privacy lawsuits can be arranged into four categories:
unreasonable intrusion into the seclusion of another, unreasonable publicity of
another’s private life, the appropriation of another’s name or likeness, and the
publication of another’s personal information in a false light.
A. Privacy Within Digital Contexts
1. Collection of personal consumer information
2. Acquisition
3. Cookies
a. Packets of data created within the hard drive
4. Opt-in
5. Opt-out
6. Children’s Online Privacy Protection Act (COPPA)
B. International Privacy Issues – the most comprehensive privacy
legislation so far has been developed by the European Union (EU).
The present consensus regarding the minimum requirements essential
to the ethical use of consumer information includes:
1. Notice – before data is collected
3. Access – access data and correct if necessary
III. Digital Property
A. Patents
1. Granted by the U.S. government for inventive processes or
steps
2. Software
a. Based on the assertion that programs describe
3. Internet focus
B. Copyright
2. No Electronic Theft Act (NET Act)
a. Signed in 1997 by President Clinton
3. Digital Millennium Copyright Act (DMCA)
a. Enacted in 1998
b. Grants Internet service providers (ISP) protection
C. Trademarks
1. Concerned with the ownership of intellectual property that
identifies goods or services
3. Recently applied to Internet naming system
4. Cybersquatting
a. Involves the registration of domains that resemble the
5. Metatags – HTML tags that describe a website’s contents
6. Keywords
D. Licenses
1. Contractual agreements made between consumers and software
vendors.
3. Types of licensing
4. Uniform Computer Information Transactions Act (UCITA) –
E. Trade Secrets
1. Economic Espionage Act of 1996
2. Trade secrets may include:
a. Formulas
F. Data Ownership
1. Click data provides data access from:
a. Site owners
2. Spidering
a. Using robots to enter targeted website
3. Special protection of data
IV. Online Expression
Spam has recently come under fire by several online organizations. Spam by
definition is unsolicited email. To add to the frustration, many spam emails do not
have valid return addresses or any contact information.
A. The DMA Code of Ethics addresses the spam issue
1. The expressed wishes of others should be respected with regard to
B. Legal Activities
1. Cyber Promotions, Inc v. America Online, Inc
2. Controlling the Assault of Non-Solicited Pornography and
Marketing Act of 2003
a. Better known as the CAN-SPAM Act
b. Creates a national framework for the use of marketing–
C. Children
1. The Computer Decency Act (CDA) was created in 1996
a. Made it a criminal act to send an “obscene or indecent”
2. Children’s Internet Protection Act (CIPA) of 2000
a. Federal funding is now linked to libraries with filtering
V. Emerging Issues
Along with the more conventional problems of online dynamics, a number of
issues have arisen that are particularly unique to the Internet at its current stage of
development.
A. Online Governance and ICANN
1. ICANN – Internet Corporation for Assigned Names and Numbers
2. Criticisms
B. Jurisdiction
1. The legal term that describes the ability of a court or other
authority to gain control over a party
2. Cases
a. The more active the involvement, the more likely that
3. Virtual Magistrate
a. Developed to resolve online disputes
b. Attempts to tailor their procedures toward the special
1. The use of deception and false claims to obtain profit.
3. The average person is not in a position to understand how
information is displayed, transferred, or stored
4. Spoofing
5. Psychology of digital environments
a. Technological advances means an opportunity for profit
b. Most people cannot differentiate between genuine and
bogus endeavors
Spoofing has become an issue recently for users of eBay and PayPal. Registered