Ecommerce Chapter 8

E-commerce Patents

Amazon: One-click purchasing Akamai: Internet content delivery global hosting system Google: Search technology, location technology

Net Neutrality, Differentiated pricing strategies

Cap pricing (tiered plans) Speed tiers Usage metering Congestion pricing Highway ( toll ) pricing

Information privacy, claims

Certain information should not be collected at all Individuals should control the use of whatever information is collected about them

In United States, privacy rights explicitly granted or derived from:

Constitution Specific statutes and regulations (federal and state) Common law

Intellectual Property Protection, Three Types

Copyright Patent Trademark law

Profiling

Creation of digital images that characterize online individual and group behavior Anonymous profiles Personal profiles

Trademarks and the Internet

Cybersquatting and brand-jacking Cyberpiracy - Typosquatting Metatagging Keywording Linking and deep linking Framing

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

FTC's Fair Information Practices, 2010 Report: Industry best practices

Do not track Mobile privacy Data brokers Development of self-regulatory codes

Theft and Innovation: The Patent Trial of the Century

Do you agree with the jury finding that Samsung violated Apple's patents in the Samsung Galaxy design? Should trade dress patents cover basic shape elements, such as round-cornered squares used for icons? The Apple look and feel has inspired the look and feel of many other Web sites and devices. How is this different from the Samsung case?

Trademarks, purpose

Ensure consumer gets what is paid for/expected to receive Protect owner against piracy and misappropriation

Ethical Concepts

Ethics Responsibility Accountability Liability Due process

Digital Millennium Copyright Act, 1998

First major effort to adjust copyright laws to Internet age Implements WIPO treaty that makes it illegal to make, distribute, or use devices that circumvent technology-based protections of copyrighted materials Safe-harbor provisions

European Data Protection Directive, Department of Commerce safe harbor program:

For U.S. firms that wish to comply with directive

Mobile and Location-Based Privacy Issues, Smartphone Apps

Funnel personal information to mobile advertisers for targeting ads Track and store user locations

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

Patents

Grant owner 20-year monopoly on ideas behind an invention Invention must be new, non-obvious, novel Encourages inventors Promotes dissemination of new techniques through licensing Stifles competition by raising barriers to entry

Profiling and Behavioral Targeting, Business perspective

Increases effectiveness of advertising, subsidizing free content Enables sensing of demand for new products and services

Due process

Laws are known, understood Ability to appeal to higher authorities to ensure laws applied correctly

Grant owner 20-year monopoly on ideas behind an invention : What types of inventions?

Machines Man-made products Compositions of matter Processing methods

Trademarks, Infringement

Market confusion Bad faith

Privacy

Moral right of individuals to be left alone, free from surveillance, or interference from other individuals or organizations

Taxation

Non-local nature of Internet commerce complicates governance and jurisdiction issues Sales taxes MOTO retailing tax subsidies Internet Tax Freedom Ac

Mobile Device Privacy Act

Not yet passed Requires informing consumers about data collection

Fair Information Practice principles

Notice Choice Access Security Enforcement Restricted collection

Private Industry Self-Regulation, Industry associations

Online Privacy Alliance (OPA) Network Advertising Initiative (NAI) - CLEAR Ad Notice Technical Specifications

Informed consent

Opt-in Opt-out Many U.S. e-commerce firms merely publish information practices as part of privacy policy or use opt-in as default

European Data Protection Directive

Privacy protection much stronger than in United States Comprehensive and regulatory in nature European Commission's Directive on Data Protection (1998): Standardizes and broadens privacy protection in European Union countries

Private Industry Self-Regulation, Safe harbor programs

Private policy mechanism to meet objectives of government regulations without government involvement Privacy seal programs (TRUSTe)

Profiling and Behavioral Targeting

Profiling Advertising networks Deep packet inspection

Copyright

Protects original forms of expression (but not ideas) from being copied by others for a period of time Look and feel copyright infringement lawsuits Fair use doctrine

FTC's Fair Information Practices, Privacy Framework (2010)

Scope Privacy by design Simplified choice Greater transparency

Technological Solutions

Spyware blockers Pop-up blockers Secure e-mail Anonymous remailers Anonymous surfing Cookie managers Disk/file erasing programs Policy generators Public key encryption

Information privacy, definition

The right to be forgotten Behavioral tracking on the Internet, social sites, and mobile devices

Advertising networks

Track consumer and browsing behavior on Web Dynamically adjust what user sees on screen Build and refresh profiles of consumers

Profiling and Behavioral Targeting, Critics' perspective

Undermines expectation of anonymity and privacy Consumers show significant opposition to unregulated collection of personal information

FTC's Fair Information Practices, Guidelines (not laws)

Used to base assessments and make recommendations Sometimes used as basis for law (COPPA)

The Internet Drug Bazaar

What's wrong with buying prescription drugs online, especially if the prices are lower? What are the risks and benefits of online pharmacies? Should online pharmacies require a physician's prescription? How do online pharmacies challenge the traditional business model of pharmacies and drug firms? What are the challenges in regulating online pharmacies? Who benefits and who loses from online pharmacies?

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

Mobile and Location-Based Privacy Issues

42% of users say privacy a concern

Net Neutrality

All Internet activities charged the same rate, regardless of bandwidth used

Intellectual property:

All tangible and intangible products of human mind

Cybersquatting and brand-jacking: What act?

Anticybersquatting Consumer Protection Act (ACPA)

Trademarks, Dilution

Behavior that weakens connection between trademark and product

Various laws strengthen ability of law enforcement agencies to monitor Internet users without knowledge and sometimes without judicial oversight

CALEA, USA PATRIOT Act, Cyber Security Enhancement Act, Homeland Security Act

Efforts to control gambling and restrict sales of drugs and cigarettes

Currently, mostly regulated by state law Unlawful Internet Gambling Enforcement Act

Major social issue

Development of expectations of privacy and privacy norms

Major political issue

Development of statutes that govern relations between record-keepers and individuals

Internet, like other technologies, can:

Enable new crimes Affect environment Threaten social values

Social networks

Encourage sharing personal details Pose unique challenge to maintaining privacy

Social Networks and Privacy, Facebook

Facebook's facial recognition technology and tagging

Internet Sales Tax Battle

Given the nature of the Internet, should sales tax be based on the location of the consumer rather than the seller? Why is there a struggle to define the nature of small business ? How big is a small business ? Are bricks-and-clicks retailers disadvantaged by local sales tax laws?

Intellectual Property Rights, Major political issue

How can Internet and e-commerce be regulated or governed to protect intellectual property?

Intellectual Property Rights, Major ethical issue

How should we treat property that belongs to others?

Trademarks

Identify, distinguish goods, and indicate their source

U.S. firms can gather and redistribute transaction information without individual's informed consent

Illegal in Europe

Four major categories of issues:

Information rights Property rights Governance Public safety and welfare

Intellectual Property Rights, Major social issue

Is there continued value in protecting intellectual property in the Internet age?

Liability

Laws permitting individuals to recover damages

Who Governs the Internet and E-commerce?

Mixed mode environment ICANN : Domain Name System Internet can be easily controlled, monitored, and regulated from a central location

Protection of children and strong sentiments against pornography

Passing legislation that will survive court challenges has proved difficult

The Internet and Government Invasions of Privacy

Retention by ISPs and search engines of user data

European Data Protection Directive, 2012 E.U. proposed changes

Rules apply to all companies providing service in Europe

Private Industry Self-Regulation

Safe harbor programs, Industry associations, Privacy advocacy groups

Moral Dimensions of an Internet Society

See Slide 8-8

Mixed mode environment

Self-regulation, through variety of Internet policy and technical bodies, co-exists with limited government regulation

Ethics

Study of principles used to determine right and wrong courses of action

Major ethical issue related to e-commerce and privacy

Under what conditions should we invade the privacy of others?

Fourteenth Amendment

due process

First Amendment

freedom of speech and association

Issues raised by Internet and e-commerce can be viewed at

individual, social, and political levels

Personal control over personal information vs.

organization's desire to monetize social network

Government agencies are largest users of

private sector commercial data brokers

Ethical, Social, and Political Issues in E-commerce: Costs and benefits must be carefully considered, especially when

there are no clear-cut legal or cultural guidelines

Fourth Amendment

unreasonable search and seizure