Online marketing legal issues


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Online marketing legal issues

  1. 1. Online Mktg – Legal Issues© Ramakrishna Kongalla,Assistant ProfessorIndian Institute of Tourism & Travel Management(An Organization of Ministry of Tourism, Govt. of India)Rtist @ Tourism
  2. 2. E-Marketing Ethical and Legal IssuesPrivacy on the Internet• Right to Privacy– Individual privacy vs. meeting consumer needs– Financial Services Modernization Act of 1999 establishes aset of regulations concerning the mgmt of consumer info• Network Advertising Initiative (NAI) July 1999– NAI represents 90% of Web advertisers– Established to determine the proper protocols for managinga Web user’s personal info on the InternetRtist @ Tourism
  3. 3. • Employer and Employee– Businesses monitoring employee activities on corporate andcommunications equipment– Keystroke software is used to monitor productivity and the abuseof company equipment– Issue of company time and company equipment vs. employee’sright of expression– Notice of Electronic Monitoring Act proposed in 2000 – requiresemployers to notify employees of telephone, email, and Internetsurveillance• Cookies– “…bits of info collected and stored by a Web browserwhen a person navigates the Web.”• Online Profiling– “…aggregating data about customers by tracking theirclickstream.”Rtist @ Tourism
  4. 4. • Protecting the business– Privacy policy on the Web site– Platform for Privacy Preferences (P3P) – industrystandard to allow Web users to gain more controlover the personal info being collected on the Web andto make privacy policies easier to find andunderstand; determine if Web site privacy policiesmatch users’ privacy needs• Consumer Privacy Act of 2000– Must give notice, obtain consent, etc., when collectingpersonally identifiable information• Online Privacy and Disclosure Act of 2000– Display seal on website when comply with thePrinciples for Fair Personal Information PracticeRtist @ Tourism
  5. 5. • Privacy of Consumer Financial Information Act(GLB Act) :– U.S. financial institutions must provide its customerswith a notice of its privacy policies and practices.– It prohibits a financial institution from disclosingnonpublic personal info about a consumer to anonaffiliated third party unless the institutionsatisfies various disclosures and opt-out requirementsand the consumer has not elected to opt-out of thedisclosure.Rtist @ Tourism
  6. 6. – Federal Trade Commission (FTC) established 5 CoreFair Info Practices:1.Consumers should be aware that personal info will becollected2.Consumers should have a say in how this info will be used3.Consumers should have the ability to check the infocollected to ensure that it is complete and accurate4.Info collected should be secure5.Web site should be responsible for seeing that thesepractices are followedRtist @ Tourism
  7. 7. Other Legal Areas of Concern• Defamation– Injuring another’s reputation, honor or good name throughfalse written or oral communication– Good Samaritan provision, Section 230 of theTelecommunications Act protects ISPs from defamationlawsuits• Children and the Internet– Younger Internet audiences are able to gain access to the same info asadults without the constraints that might be found in real space– Communications Decency Act of 1996 (CDA) and Child Online ProtectionAct of 1998 (COPA) were designed to restrict pornography on theInternet, particularly in the interest of children– Children’s Online Privacy Protection Act of 2000 (COPPA) prohibits Websites from collecting personal info from children under the age of 13without parental consentRtist @ Tourism
  8. 8. • Intellectual property– Copyright – “…protection given to the author of an originalpiece, including ‘literary, dramatic, musical, artistic andcertain other intellectual works,’ where the work has beenpublished or not.”– To have a copyright, creators must only fix their creation ina “tangible medium,” such as paper or magnetic disk.Authors DO NOT have to add their names, dates, orcopyright sign on the medium to have a copyright.– Napster ?– Digital Millennium Copyright Act of 1998 (DMCA)represents the rights of creative bodies to protect theirwork, as well as the rights of educators and resourceproviders to receive access to the workRtist @ Tourism
  9. 9. • Trademark and domain name registration– Distinctive symbol, word or phrase used to identify abusiness’s products and distinguish them from otherbusiness’s products– Parasite – selects a domain name based on common typosmade when entering a popular domain name– Cybersquatting – buys an assortment of domain names thatare obvious representations of the brick-and-mortarcompanies– Anticybersquatting Consumer Protection Act of 1999 (ACPA)– protects traditional trademarking in cyberspaceRtist @ Tourism
  10. 10. • Spam– Unsolicited email– Unsolicited Electronic Mail Act of 1999 – protects against spam (must beable to get off of email list)– Unsolicited Commercial Electronic Mail Act of 2001 – “protectsindividuals, families, and Internet service providers from unsolicited andunwanted electronic mail”– Mail Abuse Prevention System (MAPS) – takes consumer complaints andplaces address on a list of offenders who are then blocked• Online contracts– Electronic Signatures in Global and National Commerce Act of 2000 (E-Sign bill) promotes online commerce by legitimizing online contractualagreements• User agreements– Click-Throughs – must agree to before proceedingRtist @ Tourism
  11. 11. Internet Taxation• Use Tax– If vendor and consumer are located in the same state, then a sales taxcan be imposed– If vendor and consumer are not located in the same state, then the sale issubject to a use tax• Internet Tax Commission recommendation in April 2000• Streamlined Sales Tax Project designed to resolve Internettaxation issues – suggests that taxation should occur in the statewhere a product is delivered and that the state shoulddetermine the percentage taxed• The National Academy of Science’s National Research Centersuggests a flat tax rate should be collected by the vendor andreturned to the state in which the vendor residesRtist @ Tourism
  12. 12. Accounting Issues• Revenue Recognition– Net vs. Gross– Barter – counted as revenue but should be treated as “fairvalue”– Coupons, Discounts, Loss Leaders – putting sales at full priceand deferring costs– Fulfillment Costs – are being classified as a marketingexpense instead of cost of sales (which hides operationalexpenses amongst huge marketing costs)• Auctions – are recognizing revenues immediately, butshould be recognizing them over the period that theitem is on the blockRtist @ Tourism
  13. 13. Thank You…!!!©Ramakrishna Kongallae-mail: artist.ramakrishna@gmail.comRtist @ Tourism