This document discusses several major legal and ethical issues in electronic commerce, including privacy, intellectual property, free speech, taxation, computer crimes, and consumer protection. It provides details on specific topics like how private information is collected online, principles of privacy protection, data privacy directives, patents, trademarks, censorship, spamming, and internet taxation laws.

1. Submitted By:-
Hilal Ahmad Mir
Roll no.21
Zakir Nazir
Roll no. 16
Ishfaq Farooq
Roll no.22
Submitted To:-
Manveen Ma’am

2. Major Legal and Essential Issues in
Electronic Commerce
Privacy
Intellectual Property
Free Speech
Taxation
Computer Crimes
Consumer Protection
Miscellaneous

3. Legality vs. Ethics
Illegal acts break the law while unethical acts may
not be illegal
Ethics
Branch of philosophy that deals with what is considered
right or wrong
Right and wrong not always clear
Consider
 Company sells profiles of customers with information collected
through cookies
 Company allows personal use of Web but secretly monitors
activity
 Company knowingly sells tax software with bugs

4. Privacy Issues
Information privacy: claim of individuals, groups, or
organizations to determine when and to what extent
information about them is disseminated.
Right to privacy is not absolute
Public’s right to know superceded individuals right to
privacy

5. How is private information
collected?
Reading your newsgroup postings
Finding you in an Internet Directory
Making your browser collect information about
you
Recording what your browser says about you
Reading your email
 From Rainone, et al, 1998)
Most common methods are cookies and site
registration

6. Web Site Registration
Must fill in registration to get to site
Sometimes sold to third parties
User survey found (Eighth User Survey, 1998)
40% users falsify information
Nearly 67% (US and Europe) don’t register because of
privacy concerns
Nearly 57% say they don’t trust sites collecting
information
Only 6% will always register when asked

7. Cookies
Help maintain user status
A temporary passport
Used for
Customizing sites (Yahoo)
Improve online services (Amazon)
Collect demographics and usage statistics (Doubleclick)
Protection
Delete cookies
Anti-cookie software
 PGP’s Cookie Cutter
 Luckman’s Anonymous Cookie
 CookieCrusher
 Cookie Monster

8. Five Principles of Privacy Protection
Notice/Awareness
Notice of collection practices prior to collecting information
Choice/consent
Consumers to be made aware of options and give consent
Access/participation
Must be able to access and challenge information
Integrity/Security
Must be assured data is secure
Enforcement/Redress
Government legislation or legal remedies

9. EU’s Data Privacy Directive
Stronger protection of personal data such
as race, politics, finances, religion, health
and union membership
Other countries following suit
Argentina, Australia, Canada, Switzerland and
New Zealand
Bush rejects EU laws as being unduly
burdensome
Safe Harbor Agreement is a bridge
between the US and European positions

10. Patents
Grants holder exclusive rights on inventions for fixed
time
17 years in US
20 years in UK
Innovation must be
Novel
Sufficiently inventive step (not trivial)
Capable of industrial application
Amazon sued Barnes and Noble for patent
infringement (1-click ordering)
Priceline has patent on reverse-auction model – sued
Expedia

11. Trademarks
Graphical sign used by business to identify their
goods and services
Type of IP
Must meet criteria of distinctive, original, and not
deceptive
Domain names can be trademarked if they meet above
criteria
WWF won first ever ruling against man who filed
for worldwrestlingfederation.com

12. Free Speech, Internet Decency,
Spamming, and Censorship
Censorship – attempts to control material on the
Web
Communications Decency Act (CDA) was passed by
Congress but later ruled unconstitutional
Protecting Children
Parental control
Governmental control
ISP accountability
 AOL does not allow hate sites
 CompuServe was forced by Germany to shut down 200 newsgroups
related to sex – CompuServe forced to shut them down worldwide

13. Spamming
Indiscriminate distribution of messages without
permission of receiver
Spam comprised 30% of all AOL mail in 1998
Now down to 10% with spam blockers
Some legislation out there
Unsolicited Commercial Electronic Mail Act
 Requires all spam to start with word “advertisement”
 Includes name and address of sender

14. Taxation
Internet Tax Moratorium Act (1998-2001)
 prohibits states from taxing the fees that
Internet service providers collect for providing
Internet service and from collecting Internet-specific
taxes on e-commerce transactions
President George W. Bush signed into law
a bill from Congress proposing a new two-year
moratorium extension (starting Nov. 29,
2001)