E Marketing Ch5 Ethical Legal


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Strauss Emarketing Chapter 5 Ethical Legal

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E Marketing Ch5 Ethical Legal

  1. 1. E-Marketing 4/E Judy Strauss, Adel I. El-Ansary, and Raymond Frost Chapter 5: Ethical and Legal Issues
  2. 2. Chapter 5 Objectives <ul><li>After reading Chapter 5 you will be able to: </li></ul><ul><li>Compare and contrast ethics and law. </li></ul><ul><li>Discuss the implications of ethical codes and self-regulation. </li></ul><ul><li>Identify some of the main privacy concerns within traditional and digital contexts. </li></ul><ul><li>Explain some of the important copyright, patent, trademark, and data ownership issues related to the Internet. </li></ul><ul><li>Highlight key ethical and legal concerns related to online expression. </li></ul>
  3. 3. Software Piracy <ul><li>40% of all software worldwide was pirated in 2001. </li></ul><ul><li>Piracy resulted in a US$10.7 billion loss for firms. </li></ul><ul><li>840,000 Internet sites sold counterfeited software. </li></ul><ul><li>Vietnam, China, Indonesia, Ukraine, and Russia have highest piracy rates. </li></ul><ul><li>Microsoft believes that education is the best weapon against piracy. Do you agree? </li></ul>
  4. 4. <ul><li>Ethics and law are closely related. </li></ul><ul><li>Ethics concerns the analysis of what is right and wrong and how we judge the differences. </li></ul><ul><li>Modern technology presents a challenge to marketing ethics. Critical issues include: </li></ul><ul><ul><li>Ownership of intellectual property </li></ul></ul><ul><ul><li>Freedom of expression </li></ul></ul><ul><ul><li>Use of data and its collection </li></ul></ul><ul><ul><li>Status of children and digital networks </li></ul></ul>Ethics and Legal Issues
  5. 5. <ul><li>What are the roles of formal laws vs. free operation of the market? </li></ul><ul><li>Supporters of self-regulation stress the private sector’s ability to identify and resolve problems. </li></ul><ul><li>Critics argue that incentives for self-regulation are insufficiently compelling and true deterrence will not be achieved. </li></ul>The Problem of Self-Regulation
  6. 6. <ul><li>The concept of privacy has both ethical and legal aspects. </li></ul><ul><li>There is legal confusion regarding privacy. </li></ul><ul><ul><li>No specific privacy provision within the U.S. Constitution. </li></ul></ul><ul><ul><li>Privacy has been addressed in the common law of the courts. </li></ul></ul><ul><li>Within society, privacy interests compete with concerns for safety, economics, and need for association with others. </li></ul>Privacy
  7. 7. Privacy Within Digital Contexts <ul><li>AMA Code of Ethics for Marketing on the Internet: “information collected from customers should be confidential and used only for expressed purposes.” </li></ul><ul><li>Online advertising firms such as DoubleClick, have traditionally recorded users’ clickstreams to form user profiles for marketing purposes. </li></ul><ul><li>Controversy arose in 2000 when DoubleClick acquired consumer names, addresses and buying histories and planned to combine the offline data with clickstream data. </li></ul>
  8. 8. Privacy Within Digital Contexts, cont. <ul><li>Data can be obtained through cookies. </li></ul><ul><li>Cookies are packets of data that are created and stored on the user’s hard drive in response to instructions received from a Web page. </li></ul><ul><li>Cookies allow marketers to pinpoint an individual’s online behavior. </li></ul>
  9. 9. The Privacy Debate <ul><li>Supporters of systems such as DoubleClick’s argue that users wish to receive the benefits of targeted advertisers. </li></ul><ul><li>Critics point out that most users do not understand how computers process data. </li></ul><ul><li>Preliminary terms of the FTC agreement include: </li></ul><ul><ul><li>Obligation to provide notice of data collection. </li></ul></ul><ul><ul><li>Ban on combining existing data with personal information unless opt-in permission is obtained. </li></ul></ul>
  10. 10. <ul><li>The FTC has identified the following norms for the ethical use of consumer information: </li></ul><ul><ul><li>Notice </li></ul></ul><ul><ul><li>Consent </li></ul></ul><ul><ul><li>Access </li></ul></ul><ul><ul><li>Security </li></ul></ul><ul><ul><li>Enforcement </li></ul></ul>The FTC and Privacy Norms
  11. 11. <ul><li>The law protects intangible or intellectual property through 3 basic mechanisms. </li></ul><ul><ul><li>Copyright </li></ul></ul><ul><ul><li>Patent law </li></ul></ul><ul><ul><li>Trademark </li></ul></ul>Protection of Digital Property
  12. 12. <ul><li>Copyright is the primary means of protecting most expression on the Internet. </li></ul><ul><ul><li>Doctrine of Fair Use </li></ul></ul><ul><ul><ul><li>Ability to copy protected material for education and news reporting. </li></ul></ul></ul><ul><ul><li>Doctrine of First Sale </li></ul></ul><ul><ul><ul><li>Limit the ability of copyright holder to obtain profit after the initial time at which the material is sold. </li></ul></ul></ul><ul><li>Other copyright protection under No Electronic Theft Act and Digital Millennium Copyright Act. </li></ul>Copyright
  13. 13. <ul><li>Trademark law concerns the ownership of intellectual property that identifies goods or services. </li></ul><ul><li>Trademark law as been applied to the Internet naming system of domain names. </li></ul><ul><ul><li>Similarities in names may result in trademark infringement claims. </li></ul></ul><ul><ul><li>Cybersquatting involves the registration of domains that resemble or duplicate existing ones. </li></ul></ul>Trademarks
  14. 14. <ul><li>Applying patent law to computing is an uncertain but developing field. </li></ul><ul><li>Creators of software are attempting to make use of patent law protection. </li></ul><ul><ul><li>Advocates argue that granting of patents for software will encourage innovation. </li></ul></ul><ul><ul><li>Critics argue that patents will have stifling and monopolistic effects. </li></ul></ul>Patents
  15. 15. <ul><li>Licenses are increasingly popular method of intellectual property protection. </li></ul><ul><ul><li>Allow the buyer to use the product but restrict duplication or distribution. </li></ul></ul><ul><li>Licenses may be two basic types </li></ul><ul><ul><li>Shrinkwrap or break-the-seal licenses </li></ul></ul><ul><ul><li>Clickwrap licenses where the user is required to click a button to accept the terms </li></ul></ul><ul><li>Legal trend favors enforcement of software licenses. </li></ul>Licenses
  16. 16. Online Expression <ul><li>Freedom of expression is protected by the First Amendment. </li></ul><ul><li>Internet technology has resulted in what many consider inappropriate or untargeted types of consumer contact. </li></ul><ul><ul><li>Spam is the mass distribution of unsolicited electronic mail. </li></ul></ul><ul><li>CAN-SPAM Act creates a framework for email marketing. </li></ul><ul><li>Expression directed to children remains a highly visible issue within online law and ethics. </li></ul>
  17. 17. Emerging Issues <ul><li>Online governance </li></ul><ul><ul><li>The Internet Corporation for Assigned Names and Numbers (ICANN) was formed in 1998. </li></ul></ul><ul><li>Jurisdiction </li></ul><ul><ul><li>The ability of a court or other authority to gain control over a party. </li></ul></ul><ul><ul><li>Traditionally based on physical presence. </li></ul></ul><ul><ul><li>Treaties may provide for international resolution and enforcement. </li></ul></ul>
  18. 18. <ul><li>Fraud </li></ul><ul><ul><li>The use of deception and false claims to obtain profit. </li></ul></ul><ul><li>The Internet provides opportunities for novel deceptions. </li></ul><ul><ul><li>Spoofing is the use of e-mail or Web sites to impersonate individuals or corporations. </li></ul></ul><ul><li>The FTC, FBI, and state agencies have increased their efforts to track and prosecute fraudulent conduct. </li></ul>Emerging Issues, cont.
  19. 19. FBI Investigates Online Fraud