The document discusses several key issues regarding ethics in electronic marketing: 1) It addresses legal and ethical concerns around topics like intellectual property ownership, data collection and use, and protecting children online. 2) It also examines issues around fraud, privacy, and how marketing practices can be regulated through self-regulation, government regulation, or a combination. 3) Finally, it outlines specific ethical guidelines and legal frameworks around protecting consumers, sellers, and digital property like copyrights, trademarks and patents in an online context.

1. Ethics of electronic marketing
Overview of ethical and legal issues
Ethics and law are closely related Ethics concerns the analysis of what is right and
wrong and how we judge the differences as well as ethics may be directed towards
individual or group endeavors.
 laws are normally created for broader purposes.
Modern technology presents a challenge to marketing ethics. Critical
issues include:
Ownership of intellectual property
Freedom of expression
Use of data and its collection
Status of children and digital networks

2. Ethics of electronic marketing
The issues are as follows:-
M a r k e t P r a c t i c e s a n d C o n s u m e r a n d S e l l e r P r o t e c t i o n
 When buyers and sellers do not know each other and cannot even see each
other (they may even be in different countries), there is a chance that
dishonest people will commit fraud and other crimes over the Internet. During
the first few years of EC, the public witnessed many of these, ranging from the
creation of a virtual bank that disappeared along with the investors’ deposits,
to manipulation of stock prices on the Internet. Unfortunately, fraudulent
activities on the Internet are increasing.

3. Ethics of electronic marketing
The problem of self regulation
DEFINING "SELF-REGULATION:" LEGISLATION, ENFORCEMENT, ADJUDICATION
 The pure market and pure enforcement models make no mention of self-regulation,
and need not rely on self-regulation in order to reach the desired privacy protection.
Examination of market failures and government failures, however, show that pure
models bear little resemblance to reality. Because both market and government
efforts to protect privacy are subject to significant limitations, the question arises
whether a different approach, such as self-regulation, might create the reasonable
protection of privacy without excessive cost.
 Self-regulation, like government regulation, can occur in the three traditional
components of the separation of powers: legislation, enforcement, and adjudication.
Legislation refers to the question of who should define appropriate rules for
protecting privacy. Enforcement refers to the question of who should initiate
enforcement actions. Adjudication refers to the question of who should decide
whether a company has violated the privacy rules.
 An industry-organized process can "regulate" at one or more of the three stages.
Probably the greatest amount of self-regulation occurs at the legislative stage.
Industry groups often create and issue codes on privacy and many other topics. The
Direct Marketing Association and Consumer Bankers Association, among many
others, have issued guidelines for good privacy practices. These guidelines often
provide for no legal enforcement, but instead are simply made available to industry
members, government agencies, and the general public. In other instances, industry-
drafted rules are enforceable. For example, building codes adopted by local and
state governments routinely incorporate technical industry standards by reference--a
violation of the "self-regulatory" code is itself a violation of law.

4. Ethics of electronic marketing
 Industry can be involved at one or any number of points in the process of
legislating, enforcing, or adjudicating the rules. In the privacy context, one can
imagine the Internet Commerce Association in the multiple roles of defining
privacy rules, taking enforcement action against those who violate the rules, or
deciding that a member has violated industry standards. In the latter instance,
for example, the member might no longer be permitted to use the "ICA Seal of
Good Privacy Practices." One should not speak too freely about the advantages
or disadvantages of "self-regulation" generally. Instead, one should see whether
and under what conditions industry has a particular, positive role to play at each
stage of creating and enforcing the applicable regime.
Fraud on the Internet.
 Internet fraud and its sophistication have grown as much and even faster than
the Internet itself. As one example, in fall 1998 the SEC brought charges against
44 companies and individuals who illegally promoted stocks on computer
bulletin boards, online newspapers, and investment Web sites. (You can see
details on both settled and pending cases at sec.gov.) In most of these cases,
stock promoters falsely spread positive rumors about the prospects of the
companies they touted. In other cases, the information provided might have
been true, but the promoters did not disclose that they were paid to talk up the
companies. Stock promoters specifically target small investors who are lured by
the promise of fast profits.

5. Ethics of electronic marketing
There are several ways buyers can be protected against fraud. Representative
methods are described next.
Buyer protection
 Buyer protection is critical to the success of any commerce where buyers do not
see the sellers, and this is especially true for e-commerce. In short, do not forget
that you have shopper’s rights. Consult your local or state consumer protection
agency for general information on your consumer rights.
Seller protection
 Sellers, too, may need protection. They must be protected against consumers
who refuse to pay or who pay with bad checks, and from buyers’ claims that the
merchandise did not arrive. They also have the right to protect against the use
of their name by others as well as use of their unique words and phrases,
slogans, and Web address (trademark protection). Another seller protection
applies particularly to electronic media: Sellers have legal recourse against
customers who download without permission copyrighted software and/or
knowledge and use it or sell it to others.

6. Ethics of electronic marketing
Privacy
 Most electronic payment systems know who the buyers are; therefore, it may be
necessary to protect the buyers’ identities. Another privacy issue may involve
tracking of Internet user activities by intelligent agents and cookies . A privacy
issue related to employees also involves tracking: Many companies monitor
employees’ e-mail and have installed software that performs in-house
monitoring of Web activities; many employees don’t want to feel like they are
under the watchful eye of “Big Brother,” even while at work.
Web tracking
 By using tracking software, companies can track individuals’ movements on the
Internet. Programs such as “cookies” raise a batch of privacy concerns. The
tracking history is stored on your PC’s hard drive, and any time you revisit a
certain Web site, the computer knows it. Programs such as Cookie Cutter are
designed to allow users to have some control over cookies.

7. Ethics of electronic marketing
Privacy Within Digital Contexts
AMA Code of Ethics for Marketing on the Internet: “information collected from
customers should be confidential and used only for expressed purposes.”
Online advertising firms such as DoubleClick, have traditionally recorded users’
clickstreams to form user profiles for marketing purposes.
Controversy arose in 2000 when DoubleClick acquired consumer names, addresses
and buying histories and planned to combine the offline data with clickstream data.
 Data can be obtained through cookies.
 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.
 Cookies allow marketers to pinpoint an individual’s online behavior.
The Privacy Debate
Supporters of systems such as DoubleClick’s argue that users wish to receive the
benefits of targeted advertisers.
Critics point out that most users do not understand how computers process data.
Preliminary terms of the FTC(Federal trade commission) agreement include:
– Obligation to provide notice of data collection.
– Ban on combining existing data with personal information unless opt-in
permission is obtained.

8. Ethics of electronic marketing
The FTC and Privacy Norms
 The FTC has identified the following norms for the ethical use of consumer
information:
 Notice
 Consent
 Access
 Security
 Enforcement
Protection of Digital Property
The law protects intangible or intellectual property through 3 basic
mechanisms.
– Copyright
– Patent law
– Trademark

9. Ethics of electronic marketing
(i) Copyright
Copyright is the primary means of protecting most expression on the Internet.
– Doctrine of Fair Use
Ability to copy protected material for education and news
reporting.
– Doctrine of First Sale
Limit the ability of copyright holder to obtain profit after the initial time at
which the material is sold.
 Other copyright protection under No Electronic Theft Act and Digital Millennium
Copyright Act.
(ii) Trademarks
Trademark law concerns the ownership of intellectual property that identifies
goods or services.
Trademark law as been applied to the Internet naming system of domain names.
– Similarities in names may result in trademark infringement claims.
– Cybersquatting involves the registration of domains that resemble or
duplicate existing ones.

10. Ethics of electronic marketing
Patents
Applying patent law to computing is an uncertain but developing field.
Creators of software are attempting to make use of patent law protection.
– Advocates argue that granting of patents for software will encourage
innovation.
– Critics argue that patents will have stifling and monopolistic effects.
Licenses
Licenses are increasingly popular method of intellectual property
protection.
– Allow the buyer to use the product but restrict duplication or
distribution.
 Licenses may be two basic types
– Shrinkwrap or break-the-seal licenses
– Clickwrap licenses where the user is required to click a button to
accept the terms
 Legal trend favors enforcement of software licenses.