Basic Ethical Concepts

1. May Allah’s mercy be on him who is lenient in his
buying, selling, and in demanding back his money
[or debts]. (Bukhari, No: 1934)
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2. 0

3. LEGAL , ETHICAL & SOCIAL ISSUES
PRESENTATION
BY
SAFAL RAFIQ MCS-011R17-25
INSTITUTE OF SOUTHERN PUNJAB, MULTAN
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4. Focus of this chapter
•
•
•
•
•
•
Ethical issues and how to improve the ethical climate in e-
commerce
Legal issues in terms of liability, warranties, copyrights,
trademarks, and trade names
Taxation issues, and domain name disputes
Encryption laws & their description
Marketing Ethics, guidelines and legal issues
Intellectual property and its laws

5. OBJECTIVES
Learning why E-Commerce raises Legal, Ethical & Social issues
Recognize the Legal & Ethical Issues
Identify process of analyzing Ethical Dilemmas
Understand basic concepts related to Privacy
Identify the practices of E-Commerce companies that threaten Privacy
Describe the different methods used to protect on line privacy
Understand the various forms of Intellectual Property and the challenges
involved in protecting it
Understand how governance of the internet has evolved over time
Explain why taxation of e commerce raises governance and jurisdiction
issues
Identify major public safety and welfare issues raised by E-Commerce
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6. Sequence
Introduction to Intellectual Property
Free Speech and Censorship
Taxation
Encryption & Security
Emerging Legal Issues
Contracts
Online Sales
Form of on line Contracts
Requirement of Signature
Terms of Contracts
Status of Electronic Contract
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7. Limitations of Liability
Payment procedures
Tax Issues
Marketing
Protection of personal data
Advertising guidelines
Restrictions on advertising
Trade Marks, Domain Names & Copy Rights
Registration of Trade Marks
Domain Names
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8. Sequence
Dispute Resolution
Jurisdiction
Civil liability
Social Issues
Social Enablers of E-Commerce
Access to the Digital Economy
Network Availability
Connectivity
Business Connections
Skills and Digital Literacy
Confidence and Trust
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9. 10

10. Basic Ethical Concepts
Principles used to determine right and wrong courses of
action (cultural/religious differences)
These are the rules by which one makes decisions about
right and wrong, should and should not do, good and bad
These are moral, ethical practices, professional attributes
of characters - certain core values that must be instilled in
e -commerce
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11. (3:110)
Ethics are…………………
Study of principles used to determine right and wrong courses of action
Responsibility
Individuals, Organizations, and societies are responsible for actions they take
Accountability
Individuals, Organizations, and Societies should be held accountable to
others for the consequences of their actions
Liability
Laws permitting individuals to recover damages
Due process
Laws are known, understood
Ability to appeal to higher authorities to ensure laws applied
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12. Ethics
The Moral Dimensions of an Internet Society
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13. Four major categories of issues:
Information rights- individual rights to their personal info in public market
place and rights to access info about business and other organizations
Property rights - enforcement of traditional intellectual property rights in
Internet world where perfect copies can be made and distributed worldwide within
seconds
Governance - public laws to govern Internet and e- commerce, and the law-
making bodies (state, federal, international) who have jurisdiction
Public safety and welfare - to ensure equitable access to Internet and e-
commerce channels by schools and colleges, or to determine if pornography and
gambling are threat to public safety and welfare
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14. Over view of Ethical Issues
Privacy Issues
Kind/nature of information required to be given
Nature/ appropriateness of surveillance to staff
Kind of information remain private to people? Extent of security
of information from unauthorized access/use?
what kind of information be maintained in data base? How
secure the information from unauthorized access
Property
Who owns the data?
Are there fair price paid to data?
Who owns communication channels?
How are copy rights issues are resolved?
Can company machine be used for private purpose?
How to control access to information channels
Accuracy Issues
Determination of Responsibility for the accuracy of information
How can we know that information is correctly compiled and
presented?
Who is responsible for the accuracy of the system?
What compensation is due when information is misused?
Accessibility
Who has access to the data?
How much should be charged for access?
Should disabled workers be given their own means of access
to computers?
Who provides the means of permitted access to information?
What ,when, and how does the organization have to
demand /require information?
What safety measures should accompany this?
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15. Ethics
Ethics are important if you want people to trust you and to do business
with you
Because the Internet is constantly changing, adherence to an ethical framework
is more important than ever.
While there may not be written laws governing every e-business situation, an
ethical person will do the right thing in these circumstances.
Consumers and sellers who participate in e-commerce transactions have ethical
responsibilities
There are limited amounts of laws online so enforcement is done by a community
of people that use the internet.
The government has some programs to monitor how online businesses are doing
e-commerce,
Steps to gain customers trust.
Post Your Business Policies
Honor Your Policies
Protect Your Buyer’s Privacy and Security
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16. Ethics
Unethical policies used by some online business
Spam - Email that is sent to thousands of random email addresses for a
purpose. Some business will send their ads to people’s emails to gain
new customers and increase sales.
Typo Squatting - Purchasing a domain name that is a variation on a
popular domain name with the expectation that the site will get traffic off
of the original sight because of a user's misspelling of the name. For
example, registering the domain names webapedia.com or yahooo.com
in the hopes that someone making a typo will get to that site
unexpectedly.
Adware - A form of spyware that collects information about the user in
order to display advertisements in the Web browser based on the
information it collects from the user's browsing patterns.
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17. ………………………….continued
To earn your trust, a
business can voluntarily
post a Privacy Policy on
its Web site
Privacy Policy a
written, legally
binding statement
informing users
about how their
personal information
will be managed and
maintained
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18. Protection of Privacy
Moral right of individuals to be left alone, free from
surveillance, or interference from other individuals or
organizations
The claim that certain information should not be collected at
all
The claim of individuals to control the use of whatever
information is collected about them
Its expensive to invade privacy due to expanded computer
power and powerful software can detect fraud, tax
evasions/monitoring of communication / traceability of
people
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19. Information
Information Collected at E-Commerce Sites
Personally identifiable information (PII)
Anonymous information
Types of data collected
Name, address, phone, e-mail, social security
Bank & credit accounts, gender, occupation,
Preference data, transaction data, click stream data, browser
type
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20. …………………………
continued
Information gathering tools
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21. …………………………
continued
Information gathering tools
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22. Information
Cookies Collection
“… bits of info collected and stored by a Web browser when a person
navigates the Web.”
Online Profiling/ Registration
“… aggregating data about customers by tracking their click stream.”
Profiling - Creation of digital images that characterize online individual and group
behavior
Anonymous profiles
Personal profiles
Advertising networks
Track consumer and browsing behavior on Web
Dynamically adjust what user sees on screen
Build and refresh profiles of consumers
Google’s Ad Word program
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23. Recommendation: on line profiling
Principle
Notices
Choices
Access
Security
Enforcement
Restricted collection
Recommendation
Complete transparency to user by providing disclosure and
choice options on the host Web site. “Robust” notice for PII
(time/place of collection; before collection begins). Clear and
conspicuous notice for non-PII.
Opt-in for PII, opt-out for non-PII. No conversion of non-PII to
PII without consent. Opt-out from any or all network advertisers
from a single page provided by the host Web site.
Reasonable provisions to allow inspection and correction.
Reasonable efforts to secure information from loss, misuse, or
improper access.
Done by independent third parties, such as seal programs and
accounting firms
Advertising networks will not collect information about sensitive
financial or medical topics, sexual behavior or sexual
orientation, 9-33 or use Social Security numbers for profiling
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24. Intellectual Property
Intellectual property
Encompasses 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?
Three main types of protection
Copyright
Patent
Trademark law
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25. 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
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26. …………………………..continued
Copyright law protects
most text, photos,
sounds, software, logos,
images, and videos
on the Web.
For works copyrighted
after 1978, copyright
protection generally lasts for
the life of the author
plus 70 years
copyright a form of
protection provided
by U.S. law that
grants exclusive
rights for the original
works of an author
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27. continued
Copy right law
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28. continued
Copy Right Act
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29. Copyright law:
Protects original forms of expression (but not ideas) from
being copied by others for a period of time
Look and feel copyright infringement lawsuits
Fair use doctrine
Digital Millennium Copyright Act, 1998
First major effort to adjust copyright laws to Internet age
Implements WIPO treaty that makes it illegal to make,
distribute, or use devices that circumvent technology-based
protections of Copyrighted materials
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30. Free Speech & Censor ship
On the Internet, censorship refers to government’s
attempt to control, in one way or another, the
material that is presented
“Donham’s First Law of Censorship states:
“Most citizens are implacably opposed to censorship in
any form except censorship of whatever they personally
happen to find offensive.”
Children’s Online Protection Act exemplifies the
protective approach
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31. Protection of children and strong sentiments against
pornography
Passing legislation that will survive court challenges has
proved difficult
Efforts to control gambling and restrict sales of drugs
and cigarettes
Currently, mostly regulated by state law
Unlawful Internet Gambling Enforcement Act
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32. Taxation
E-commerce taxation illustrates complexity of governance /
jurisdiction issues
U.S. sales taxed by states and local government
MOTO retailing
E-commerce benefits from tax “subsidy”
Unlikely that comprehensive, integrated rational approach to taxation issue will
be determined for some time to come
Neutrality: All Internet traffic treated
Equally—all activities charged the same rate, no preferential assignment of
bandwidth
Backbone providers vs. content providers
December 2010 FCC approved “compromise” net neutrality rules
Telecom providers adopting compromise position between wired and mobile
wireless access
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33. Encryption & Security
The failure of e-businesses to adequately
protect consumer data has led to an
increase in identity theft.
Identity theft is the practice of running up
bills or committing crimes in someone else’s
name.
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34. Encryption & Security
E-businesses are connected to the Internet 24 hours a day,
seven days a week.
Maintaining the security of corporate data is one of the
highest priorities of any e-commerce business.
All Internet users, including minors, need to be assured of
their privacy and the safety of their personal information
online.
When you shop online, you are asked to provide personal
data, including your address, phone number, e-mail
address, and credit-card information
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35. E-commerce sites use
Encryption to secure
credit-card data
transmitted by
customers.
Encryption the
scrambling of data from
plain text into code
once it is sent from a
computer
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36. Emerging legal issues
Laws are necessary in all segments of society, e-commerce is
no exception.
Those in the online world should recognize that copyright,
patent, and trademark laws protect much of the material found
on the Internet.
In addition, they should be aware that there are other types of
laws they must follow
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37. continued
Just as the real world
requires rules and
regulations to keep
things running smoothly,
the Internet has given
birth to Cyber law.
Cyber law an evolving
legal framework that
governs Internet
activities; covers topics
ranging from copyright
infringement to e-mail
privacy, identity theft, and
interstate
e-commerce
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38. A sale is a sale only if it is made through mutual
consent. (Ibn Majah, No: 2176)
Electronic Contracts
A legally binding contract requires a few basic elements: an
offer, acceptance, and consideration
These requirements are difficult to establish when the
human element in the processing of the transaction is
removed and the contracting is performed electronically
Intelligent Agents and Contracts
Uniform Computer Information Transactions Act ( 2000),
makes clear that contracts can be formed even when a
human is not directly involved
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39. Interaction of electronic agents or between electronic agent and individual can
result in a valid contract.
Contract might be formed by the operations of the electronic agent.”
“A person that uses an electronic agent is bound by the operations of the
electronic agent, even if no individual was aware of or reviewed the agent’s
operation.”
Consideration
Can be anything of value
Delivery of goods
Delivery of services
Payment
Return promise
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40. O you who believe! Fulfill [your] obligations(5:1)
Terms of Contract
Online contracts must meet the same requirements as normal contracts:
There must be an agreed set of terms
Both parties must intend to enter into a legally binding agreement.
Incorporation of terms
The terms and conditions on which the parties are contracting must be agreed by
both parties and incorporated into the contract between them.
Simply placing terms and conditions on a website is not enough to incorporate
them into a contract
The parties must agree that they contract on the stated terms, and they must do
so before (or at the same time as) becoming contractually bound.
When dealing with customers of a website the seller must ensure that the
ordering process requires the customers to read and agree to the seller's terms
and conditions.
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41. Contract
Status of Contract
Electronic contracts and electronic signatures are just as legal and enforceable as traditional
paper contracts signed in ink
Current UCC (Uniform Code of Commerce):
Writing
“printing, typewriting, or any other intentional reduction to tangible form”
Signature
Signature may be “any symbol made or adopted with an intention, actual or
apparent, to authenticate the writing as that of a signer.”
When electronic signatures are used, contracts created online areas legal as those
on paper.
Cryptographic Signatures (PKI)
Cryptography is the science of securing information. It is most commonly associated with
systems that scramble information and then unscramble it. Security experts currently favor
the cryptographic signature method known as Public Key Infrastructure (PKI) as the most
secure and reliable method of signing contracts online.
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42. Limitation of Liability
The limitation of liability clause restricts the amount and type of damages
that one party can recover from another. The thing to remember is that
vendor forms almost always contain clauses that favor the vendor rather
than the CIO's company.
You may have seen a limitation of liability that looks like this:
"In no event shall either party be liable for any consequential
damages, even if either party knew or should have known
of the possibility hereof."
This clause prevents one party from recovering certain types of
damages -- consequential, or "indirect" damages -- from the other party.
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43. The truthful merchant [is rewarded by being ranked] on the Day of
Resurrection with prophets, veracious souls, martyrs and pious people.
(Tirmidhi, No: 1130)
E Payment Methods
Credit and Debit card
Digital Currency
E-Wallets
Peer-to-Peer Methods
Smart card
Micro-payments
B2B
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44. Marketing
Today’s businesses realize that having a domain name that is the
same as their company’s or product’s name can be extremely
valuable.
As a result, disputes over domain names have become more
common
Domain-name disputes are generally settled in court.
Legal arguments are presented in court about why a domain
name registered to one person or company should be canceled or
transferred to another
Two options left
Attempt to buy the domain name from its owner.
Select another domain name.
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45. Marketing
The expansion of the World
Wide Web
has led to increased
trademark
infringement claims
and lawsuits.
Trademark infringement
occurs when someone
uses a name or phrase that
is already trademarked
trademark the use of a
word, phrase, symbol,
product shape, or logo by a
manufacturer or business
to identify its goods and to
distinguish them from
others on the market
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46. Marketing
Cyber squatting
Anti cyber squatting Consumer
Protection Act (ACPA)
Cyber piracy
Typo-squatting
Meta-tagging
Key wording
Deep linking
Framing
trademark the use of a
word, phrase, symbol,
product shape, or logo by a
manufacturer or business
to identify its goods and to
distinguish them from
others on the market
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47. …………………………..continued
Explanation of terms
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48. Marketing
A patent excludes
others from “making, using,
offering for sale, or selling” an
invention or idea in the States
or “importing”
the invention into the States.
patent a property
right granted to the
inventor of a product
or process by the
state Patent and
Trademark Office
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49. Marketing
Patents
Grant owner 20-year monopoly on ideas behind an invention
Machines
Man-made products
Compositions of matter
Processing methods
Invention must be new, non-obvious, novel
Encourages inventors
Promotes dissemination of new techniques through licensing
Stifles competition by raising barriers to entry
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50. …………………continued
Technological Solutions
Spyware
Pop-up blockers
Secure e-mail
Anonymous remailers, surfing
Cookie managers
Disk/file erasing programs
Policy generators
Public key encryption
Privacy Policy Reader/Platform for Privacy Preferences (P3P)
Comprehensive technological privacy protection standard
Works through user’s Web browser
Communicates a Web site’s privacy policy
Compares site policy to user’s preferences or to other standards Such as FTC’s FIP guidelines or
EU’s Data Protection Directive
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51. …………………continued
Governance of E- Commerce Laws
Currently: mixed mode policy environment
Self-regulation, through variety of Internet policy and
technical bodies, co-exists with limited government
regulation
ICANN in charge of Domain Name System
Internet can be very easily controlled, monitored, and
regulated from a central location (e.g., China, Singapore,
etc.)
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52. …………………continued
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53. …………………continued
Public Safety and Welfare
Protection of children and strong sentiments against
pornography
Passing legislation that will survive court challenges has
proved difficult
Efforts to control gambling and restrict sales of drugs and
cigarettes
Currently mostly regulated by state law
Unlawful Internet Gambling Enforcement Acte
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54. …………………continued
Social Enablers of E-Commerce
There is a relationship between data, information and
knowledge. Knowledge is the “information that is relevant,
actionable, and based at least partially on experience” (Leonard
& Sensiper, 1998). Knowledge provides a structure for
interpreting information by assimilating and explaining
variations over time and space (Gordon & Gordon, 2004).
Knowledge Management provides an integrated approach to
identifying, capturing, retrieving, sharing, and evaluating
enterprises information assets. These information assets
include databases, documents, policies, procedures, as well as
the tacit knowledge and experience stored in individual's heads
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55. The one who knowingly purchases a stolen good, is a
partner to the act of sin and the shame. (Kanz
Al-‘Ammal, No: 9258)
Conclusion
The fundamental codes of moral behavior such as
Truthfulness,
Trustworthiness,
Generosity and leniency,
Adherence to business commitments and contracts,
Fair treatment of workers,
Avoidance of evil practices (such as fraud, cheating, deceit, hoarding of
foodstuff, exploitations, giving short measures etc.) provide, to a large
extent,
The general background of Islamic business ethics.
I believe that there is a pressing need to study and implement Islamic moral
values in the context of the present day business situations
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56. Thank you