week 7 BUS320: E-Commerce and E-Business Mark Zuckerberg, the founder of Facebook, once proclaimed in an interview that the age of privacy had to com -

week 7 BUS320: E-Commerce and E-Business
Mark Zuckerberg, the founder of Facebook, once proclaimed in an interview that the age of privacy had to come o an end. According to Zuckerberg, social norms had changed and people were no longer worried about sharing their personal information with friends, friends of friends, or even the entire Web. This view is in accordance with Facebooks broader goal, which is, according to Zuckerberg, to make the world a more open and connected place. Many Facebook features are premised on this position. Supporters of Zuckerbergs viewpoint believe the 21st century is an age of information exhibitionism, a new era of openness and transparency.
Although Facebook started out at Harvard and other campuses with simple privacy policy of not fiving anyone except friends access to your profile, this quickly changed as its founder Mark Zuckerberg realized the revenue-generating potential of a social networking site open to the public.
Facebook has al long history of invading the personal privacy of its users. In fact, the very foundation of Facebooks business model is to sell the personal information of its users to advertisers. In essence, Facebook is like any broadcast or cable television service that users entertainment to attract large audiences, and then once those audiences are in place, to sell air time to advertisers in 30-to 60-second blocks. Of course, television broadcasters do not have much if any personal information on their users, and in that sense are much less of a privacy threat. Facebook, currently with over 2 billion users worldwide, clearly attracts a huge audience.
In late 2017 and 2018, concerns about Facebook and privacy invasion came to the fore with the Cambridge analytical scandal mentioned in the video. In March 2018, Facebook announced changes to its privacy settings, which are discussed in the video “Facebook Privacy Settings Tutorial” below —
Facebook Privacy Settings Tutorial(Links to an external site.)
Minimize Video https://www.youtube.com/watch?v=Ajrt_U_UrUQ&feature=emb_title
Dear Anush, Azhar, Bat-Ider, Dhruv, Gangul, Kalyan, Kinjalben, Jeet, Hoa, Sanjarbek, Raja, Vikas and Yolanda,
Week 7 Class Discussiontopic comes from — Chapter 8 “Ethical, Social, and Political Issues in E-commerce”
This class expects you tocontribute two times:
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Yourcontribution one–answer one question only out of four questions below after your reviewing Case8.2 “Facebook Privacy” listed above (also attached here):
Question #1: Do people who used Facebook have a legitimate claim to privacy when they themselves are posting information about themselves?
Question #2: Why did Facebook announce changes to its privacy settings in March 2018?
Question #3: What changes to privacy settings did Facebook announce?
Question #4: How will changing your settings on Facebook help protect your privacy?
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Yourcontribution two–comment on oneof your classmates’ posting on his/her contribution one
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
You will earn 2 points from your completed contribution one (please list question number with the question first. For example, “Question #2: Why did Facebook announce changes to its privacy settings in March 2018?” followed by your answer).
You will earn 2 points from your completed contribution two (please provide that classmate name at the beginning of your response. Everybody would benefit more if we can follow discussion thread exactly. Otherwise, you will not receive a full 2 points).
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
You are expected to study Chapter 8, or at least to study slides from Chapter 8 carefully. You can find chapter slides under “Files”.
Always, you must Unicheck before your posting.
-Professor Da

Copyright 2020 Kenneth C. Laudon and Carol Guercio Traver. This work is protected by United States copyright laws and is provided solely for the use of
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E-commerce 2019: business. technology. society.
KENNETH C. LAUDON AND CAROL G. TRAVER

continued

video case
chapter 8 Ethical, Social, and Political Issues in

E-commerce

case 8.2 Facebook Privacy

watch the
video at https://www.youtube.com/watch?v=Ajrt_U_UrUQ

summary The business model of Facebook is to
collect as much personal information on its
users as is technically possible, and socially
acceptable, and then to sell that information to
advertisers in the form of targeted advertising
on Facebooks website, mobile site, and mobile
apps, and on partner websites, who use the
information to personalize ads. This video
provides some suggestions for how users
can gain greater control over their personal
information that they have placed on their
Facebook pages. L: 3:13.

case Mark Zuckerberg, the founder of Facebook, once proclaimed in an interview that the age
of privacy had to come to an end. According to Zuckerberg, social norms had changed
and people were no longer worried about sharing their personal information with friends,
friends of friends, or even the entire Web. This view is in accordance with Facebooks

8.2: FACEBOOK PRIVACY 2

video case
questions

broader goal, which is, according to Zuckerberg, to make the world a more open and
connected place. Many Facebook features are premised on this position. Supporters of
Zuckerbergs viewpoint believe the 21st century is an age of information exhibitionism, a
new era of openness and transparency.

Although Facebook started out at Harvard and other campuses with a simple privacy
policy of not giving anyone except friends access to your profle, this quickly changed as its
founder Mark Zuckerberg realized the revenue-generating potential of a social networking
site open to the public.

Facebook has a long history of invading the personal privacy of its users. In fact, the very
foundation of Facebooks business model is to sell the personal information of its users to
advertisers. In essence, Facebook is like any broadcast or cable television service that uses
entertainment to attract large audiences, and then once those audiences are in place, to
sell air time to advertisers in 30- to 60-second blocks. Of course, television broadcasters do
not have much if any personal information on their users, and in that sense are much less
of a privacy threat. Facebook, currently with over 2 billion users worldwide, clearly attracts a
huge audience.

In late 2017 and 2018, concerns about Facebook and privacy invasion came to the fore
with the Cambridge Analytica scandal mentioned in the video. In March 2018, Facebook
announced changes to its privacy settings, which are discussed in the video.

1. Do people who use Facebook have a legitimate claim to privacy when they themselves
are posting information about themselves?

2. Why did Facebook announce changes to its privacy settings in March 2018?

3. What changes to privacy settings did Facebook announce?

4. How will changing your settings on Facebook help protect your privacy? E-commerce 2019: Business. Technology. Society.
Fifteenth Edition
Chapter 8
Ethical, Social, and Political Issues in E-commerce

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Learning Objectives
8.1 Understand why e-commerce raises ethical, social, and political issues.
8.2 Understand basic concepts related to privacy and information rights, the practices of e-commerce companies that threaten privacy, and the different methods that can be used to protect online privacy.
8.3 Understand the various forms of intellectual property and the challenges involved in protecting it.
8.4 Understand how the Internet is governed and why taxation of e-commerce raises governance and jurisdiction issues.
8.5 Identify major public safety and welfare issues raised by e-commerce.

Slide 2 is list of textbook LO numbers and statements
2

The Right to Be Forgotten: Europe Leads on Internet Privacy
Class Discussion
Is Google responsible for the accuracy of links to other information? Why or why not?
Why do European and American views on privacy protection differ so dramatically?
How can the different perspectives on privacy be managed in a global environment like the Internet?

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

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

Figure 8.1 The Moral Dimensions of an Internet Society

Figure 8.1, Page 506
The introduction of the Internet and e-commerce impacts individuals, societies, and political institutions. These impacts can be classified into four moral dimensions: property rights, information rights, governance, and public safety and welfare.

Full description: A diagram shows the moral dimensions of an Internet society. A bulls-eye diagram has the center labeled The Internet and E-commerce. From the center to periphery, three surrounding circles are labeled Ethical Issues and Individual, Social Issues and Society, and Political Issues and Polity. The area surrounding the circles is divided into four quadrants. Top left quadrant is labeled Information Rights. Top right quadrant is labeled Property Rights. Bottom right quadrant is labeled as Governance, and bottom left quadrant is labeled as Public Safety and Welfare.
6

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

Analyzing Ethical Dilemmas
Process for analyzing ethical dilemmas:
Identify and clearly describe the facts
Define the conflict or dilemma and identify the higher-order values involved
Identify the stakeholders
Identify the options that you can reasonably take
Identify the potential consequences of your options

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

Privacy and Information Rights
Privacy
Moral right of individuals to be left alone, free from surveillance or interference from other individuals, organizations, or state
Information privacy: 4 premises
Right to control information collected about them
Right to be forgotten
Right to know when information is collected and give consent
Informed consent
Right to personal information due process
Right to have personal information stored in a secure manner

Table 8.2 The F T Cs Fair Information Practice Principles

Principle Description

Notice/Awareness (core principle) Sites must disclose their information practices before collecting data. Includes identification of collector, uses of data, other recipients of data, nature of collection (active/inactive), voluntary or required, consequences of refusal, and steps taken to protect confidentiality, integrity, and quality of the data.

Choice/Consent (core principle) There must be a choice regime in place allowing consumers to choose how their information will be used for secondary purposes other than supporting the transaction, including internal use and transfer to third parties. Opt-in/opt-out must be available.

Access/Participation Consumers should be able to review and contest the accuracy and completeness of data collected about them in a timely, inexpensive process.

Security Data collectors must take reasonable steps to assure that consumer information is accurate and secure from unauthorized use.

Enforcement There must be a mechanism to enforce F I P principles in place. This can involve self-regulation, legislation giving consumers legal remedies for violations, or federal statutes and regulation.

Privacy in The Public Sector: Privacy Rights of Citizens
Public sector privacy rights have long history
First Amendment
Fourth Amendment
Fourteenth Amendment
Constitutional, implied privacy rights did not cover collection and use of personal information
1974 Privacy Act
Federal and state law to protect individuals against unreasonable government intrusion

Privacy in The Private Sector: Privacy Rights of Consumers
Privacy issues rose with first large-scale, nationwide computerized systems
Credit card systems, credit rating agencies
Piecemeal federal and state privacy legislation, applying to specific industries
Spoke versus Robins: what harm must be shown in order to sue?
Historically, few claims to privacy in public, open markets such as in e-commerce
Emergence of Internet has created enormous collections of personal data
Ideal environment for business and government to invade personal privacy of consumers
Google, Amazon, Netflix, etc.

Information Collected by Websites
Data collected includes
Personally identifiable information (P I I)
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

Key Issues in Online Privacy of Consumers
Top concerns
Profiling and ad targeting
Social network privacy
Sharing of information by marketers
Mobile phone privacy
Digital assistant privacy

Marketing: Profiling, Behavioral Targeting, and Retargeting (1 of 2)
Profiling
Creation of data images that characterize online individual and group behavior
Anonymous profiles
Personal profiles
Facial recognition a new dimension
Advertising networks
Track consumer and browsing behavior on Web
Dynamically adjust what user sees on screen
Build and refresh profiles of consumers
Googles new privacy policy

Marketing: Profiling, Behavioral Targeting, and Retargeting (2 of 2)
Business perspective:
Increases effectiveness of advertising, subsidizes content
Enables sensing of demand for new products
Critics perspective:
Undermines expectation of anonymity and privacy
Enables price discrimination

Social Networks: Privacy and Self-Revelation
Social networks
Encourage sharing personal details
Pose unique challenge to maintaining privacy
Facebook
Massive database
Serving ads to users not on Facebook
Sharing information with third parties
Personal control over personal information versus Organizations desire to monetize social network

Mobile Devices: Privacy Issues
Mobile apps
Funnel personal information to mobile advertisers for targeting ads
Track and store user locations
Track users use of other apps
Persistent location tracking
U.S. Supreme Court rules that police need warrant prior to searching a cell phone for information

Consumer Privacy Regulation: the F T C (1 of 2)
Fair Information Practice (F I P) principles
Informed consent: Opt-in and opt-out
Harm-based approach
Do Not Track mechanism
Recent emphasis is to give consumer rights regarding collected personal information

Consumer Privacy Regulation: the F T C (2 of 2)
F T Cs current privacy framework
Scope:
Applies to all commercial entities
Privacy by Design:
Companies should promote consumer privacy throughout the organization and at all stages in the development of products
Simplified Choice
Companies should simplify consumer choice
Greater Transparency

Consumer Privacy Regulation: the Federal Communications Commission (F C C)
2015 classification of broadband I S P s as similar to public utility services and subject to F C C regulation
2016 F C C approved new privacy rules for broadband I S P s
Must notify users of privacy options or obtain user consent to collect information
Service cannot be contingent on users surrendering privacy
2017 Congress voted to repeal privacy rules for broadband I S P s

Privacy Policies
Website Terms of Use Notices
Recent study showed these polices would take average reader 8 hours to read policies
Have conflicting statements
Little oversight and comparison between policies of different companies

Privacy Protection in Europe (1 of 2)
European privacy protection much stronger than in U.S
2016 General Data Protection Regulation (GDPR)
Replaces Data Protection Directive of 1998
Applies to all organizations that operate in EU
Protects wide variety of PII
Strengthens citizens rights to their own personal data
Strengthens oversight of firms to ensure compliance
Environment has turned against U.S. firms like Facebook and unfettered collection and use of personal data

Industry Self-Regulation
Privacy seal programs
Network Advertising Initiative (N A I)
Ad Choices Program
In general, self-regulation has not succeeded in reducing American fears of privacy invasion or reducing the level of privacy invasion

Technology Solutions
Solutions include
Intelligent Tracking Protection (I T P)
Differential privacy software
Privacy default browsers
Message encryption
Spyware blockers
Pop-up blockers and ad blockers
Secure e-mail, anonymous remailers
Cookie managers
Public key encryption

Privacy Protection
Privacy protection as a business
Personal Data Economy (P D E)
Internet of Me
Life Management tools
Privacy advocacy groups

Limitations on The Right to Privacy (1 of 2)
Law enforcement and surveillance
Edward Snowden and NSA Prism program
Legislation that strengthens ability of law enforcement to monitor Internet users without their knowledge
CALEA, USA Patriot Act, Cyber Security Enhancement Act, Homeland Security Act, USA Freedom

Limitations on The Right to Privacy (2 of 2)
Apples iPhone 6 and encryption controversy
Supreme Court cases limiting law enforcements ability to obtain data from mobile phones without a warrant
Riley versus California
United States versus Jones
Use of personal data by government agencies is widespread

Insight on Technology: Apple: Defender of Privacy?
Class Discussion
Are there circumstances that warrant the invasion of personal digital information and property?
Is the All Writs Act of 1789 applicable to todays technology-driven privacy issues?
Should citizens charged with a crime or convicted criminals have any rights to privacy?
How does Apples views on privacy differ from those of Facebooks and Googles?

Intellectual Property Rights
Intellectual property:
All tangible and intangible products of human mind
Major ethical issue:
How should we treat property that belongs to others?
Major social issue:
Is there continued value in protecting intellectual property in the Internet age?
Major political issue:
How can Internet and e-commerce be regulated or governed to protect intellectual property?

Intellectual Property Protection
Main types of protection:
Copyright
Patent
Trademark law
Trade secrets law
Goal of intellectual property law:
Balance two competing interests-public and private
Maintaining this balance of interests is always challenged by the invention of new technologies

Copyright
Protects original forms of expression (not ideas) from being copied by others for a period of time
Fair use doctrine
Digital Millennium Copyright Act of 1998
First major effort to adjust copyright laws to Internet age
Implements W I P O treaty that makes it illegal to make, distribute, or use devices that circumvent technology-based protections of copyrighted materials
Safe-harbor provisions

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

E-commerce Patents
1998 State Street Bank & Trust v. Signature Financial Group
Business method patents
2014 Alice Corporation lawsuit
Supreme Court rules that software does not make a basic business method or abstract idea patentable
E-commerce patents
Amazon: One-click purchasing
Akamai: Internet content delivery global hosting system

Trademarks
Identify, distinguish goods, and indicate their source
Purpose
Ensure consumer gets what is paid for/expected to receive
Protect owner against piracy and misappropriation
Infringement
Dilution
Federal Trademark Dilution Act and Trademark Dilution Revision Act
Uniform Rapid Suspension System (U R S)

Trademarks and the Internet
Cybersquatting and brand-jacking
Anticybersquatting Consumer Protection Act (A C P A)
Cyberpiracy
Typosquatting
Metatagging
Keywording
Linking and deep linking
Framing

Trade Secrets
Business procedures, formulas, methods of manufacture and service delivery
May not be unique or novel
Trade secrets are
(a) secret
(b) have commercial value to owner
(c) owner has taken steps to protect
2016 Defend Trade Secrets Act

Who Governs the Internet and E-commerce?
Mixed mode environment
Self-regulation, through variety of Internet policy and technical bodies, co-exists with limited government regulation
I C A N N : Domain Name System
Internet can be easily controlled, monitored, and regulated from a central location

Taxation
Non-local nature of Internet commerce complicates governance and jurisdiction issues
Sales taxes
Governments in Europe and U.S. rely on sales taxes
As e-commerce grew, states began to argue their inability to tax remote e-commerce sales was siphoning away billions of tax dollars
Supreme Court ruled in South Dakota versus Wayfair that states could tax online sales even when seller did not have physical location in the state
Internet Tax Freedom Act

Insight on Business: Internet Sales Tax Battle
Class discussion:
Given the nature of the Internet, should sales tax be based on the location of the consumer rather than the seller?
What are the different approaches Amazon has taken with respect to sales taxes?
Are bricks-and-clicks retailers disadvantaged by local sales tax laws?
Do you agree with the decision in the South Dakota versus Wayfair case?

Net Neutrality
All Internet activities charged the same rate, regardless of bandwidth used
Netflix and YouTube together consume about 50% of bandwidth in United States
Prior to 2015, I S P s could throttle high-volume users
February 2015, F C C ruled that broadband I S P s should be viewed and regulated as public utilities
Under Trump administration, net neutrality regulations have been repealed, but many states are attempting to reinstate them via state laws and regulations

Public Safety and Welfare
Protection of children against pornography and privacy infringement
Passing legislation that will survive court challenges has proved difficult
Efforts to control gambling and restrict sales of drugs and cigarettes
Prevent All Cigarette Trafficking Act
Unlawful Internet Gambling Enforcement Act
Increase in number of states allowing online gambling

Insight on Society: The Internet Drug Bazaar
Class discussion:
Whats wrong with buying prescription drugs online, especially if the prices are lower?
What are the risks and benefits of online pharmacies?
What are the challenges in regulating online pharmacies?
How has law enforcement attempted to deal with the sale of illegal drugs on the darknet?

Careers in E-commerce
Position: E-commerce Privacy Research Associate
Qualification/Skills
Preparing for the Interview
Possible Interview Questions

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