Ethical and Legal Issues Term Paper

Pages: 15 (4942 words)  ·  Bibliography Sources: 6  ·  File: .docx  ·  Level: Master's  ·  Topic: Business


Indeed, most online businesses are only keen to adhere to the minimum legal requirements, and hence few go beyond the set legal limits. A quick check reveals that to confirm the age of the buyer, most online businesses only demand that the said buyer ticks a box, whereby in so doing they verify that they are of a certain age. In that regard, as much as this is a legal issue, it could also be regarded an ethical issue.

When it comes to enforcement of contracts, it is important to note that unlike is the case with traditional approaches to business; ecommerce presents numerous challenges when it comes to the enforcement of legal contracts. Contract law, in basic terms, seeks to address both the formation as well as the enforcement of contracts. Whenever people conduct business online, it is likely that agreements are reached between the concerned parties. Most of the traditional contract principles did not foresee this new and unique development. According to Frieden (2009), the author of Commerce Law, the best answer to the question on whether ecommerce contracts are enforceable is "maybe." The only agreements with a high likelihood of being enforced by the courts according to the author are click-wrap agreements. Other kinds of agreements (such as shrink-wrap and browse-wrap agreements) are typically difficult to enforce.

2. Collecting and Securing Consumer InformationDownload full Download Microsoft Word File
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TOPIC: Term Paper on Ethical and Legal Issues in Assignment

In seeking to facilitate the payment of goods and services, ecommerce sites typically collect a lot of information about buyers. Information commonly collected includes, but is not limited to, the name of the buyers, their email address, home address, age, occupation, gender, etc. This information is what is referred to as personally identifiable information. Should such information be stolen or leaked to crooks, the amount of damage occasioned could be irreversible. The all important questions that could be raised in this case are; who is responsible for guaranteeing the safety and security of a customer's personal info? Are businesses doing enough to protect the said info? Is it possible that businesses are being too mindful of the costs involved in adequate protection measures that they neglect their duty to protect client information?

As will be further highlighted elsewhere in this text, there are cases whereby firms have been found to be negligent in their handling of important customer information. Indeed, there have been cases where hackers have broken into servers of prominent organizations and stolen personal information belonging to thousands of people. Is it ethical (or even legal) for companies to keep their customer's sensitive data at a time when the threat of such information being stolen is on the rise? Should ecommerce firms be compelled to discard all the information they may be left with regarding a specific client after a transaction is completed? A case in point is the Sony Play Station Network hacking incident. In the month of April 2011, Sony, one of the most visible and successful electronic companies in the world, had its PSN hacked into in an incident that was attributed to external attackers. This particular incident according to Cross and Miller (2014) affected at least 100 million accounts belonging to scores of online users of Sony's gaming services. Those interviewed at the time billed this incident as being one of the most outrageous data breaches of all time. For purposes of this discussion, what really matters as far as the PSN network debacle is concerned is; did the company embrace the appropriate measures to protect the personal information of its customers? The answer in this case is a resounding NO! Investigations conducted by authorities in the UK revealed that the company could have prevented the data breach (BBC, 2013). David Smith, a representative of UK's Information Commissioner's Office at the time pointed out that "if you are responsible for so many payment card details and log-in details, then keeping that personal data secure has to be your priority" (BBC, 2013). It is on the basis that Sony was negligent in keeping personally identifiable info of consumers secure that the company was fined a total of $396,000 for failure to prevent the said breach (BBC, 2013). Sony's case is just a representation of the reluctance of numerous other businesses to act ethically by protecting the private info of clients.

Still on the collection of consumer information, it is also important to note that some online marketing firms do collect the private information of individuals (without their consent) and offer it for sale to other businesses. Is it ethical for an online business to purchase email addresses of target consumers, and other information detailing the shopping habits and browsing tendencies of individuals, and then bombard such individuals with unsolicited mails? Spamming has also been a significant problem -- from both a legal and ethical point-of-view. Spamming has essentially got to do with the distribution, in most cases indiscriminate, of messages without the explicit consent of receivers. In an attempt to rein in spamming, various jurisdictions have enacted laws that spell out penalties for those found guilty of spamming. Such legislation includes but is not limited to the Unsolicited Commercial Electronic Mail Act. When clients fill out online registration forms in online ecommerce sites, such information is essentially used to support the transaction being undertaken. However, in some other instances, such information might be used for other secondary purposes -- it can be sold to third parties, as already highlighted above. Indeed, firms doing business online can gather and also redistribute the information they collect about their clients without the express or informed consent of users. Essentially, informed choice offers clients the choice of opting-in or opting-out of such schemes. With regard to consent, it should also be noted that business entities should put in place a choice regime that permits users to make informed choices with regard to how the data they fill in should be used.

Thanks to ecommerce, businesses are increasingly adopting creative products in an attempt to identify customer preferences, and hence stay ahead of the competition. For instance, whenever cookies are utilized as a means of storing useful user info, privacy issues are bound to be raised. Cookies in the words of Stematellos (2007, p. 32) "are small files placed on visitors' hard disks to gather information about their activities, preferences, and shopping habits." It should be noted that most ecommerce sites do not notify clients that they are making use of cookies, and as Stematellos (2007) observes, it is for this reason that the utilization of the same is in some quarters seen as not only a threat to personal privacy, but also a threat to freedom of choice. In the final analysis therefore, just as is the case with the collection of personally identifiable information during ecommerce transactions, the utilization of cookies by ecommerce sites is seen by some as being unethical.

In an attempt to circumvent the ethical (and possibly legal) issues raised in the collection of client data and information, most websites are increasingly embracing notice of collection practices. This is where a website informs a user that it does use cookies. Further, some websites allow users to give their consent with regard to the collection of cookies. It should, however, be noted that there are still some concerns that businesses conducting their activities online are yet to address. Essentially, even when consent to monitor user activity is sought, businesses do not usually share with consumers how the collected data is used or with whom it is shared. Further, as has been addressed elsewhere in this text, there is also the question of whether businesses take the necessary precautions to protect the information they collect from consumers.

To determine whether the noted harvesting of personal information from consumers is ethical, it would be prudent to analyze the issue from a utilitarian and Kantian point-of-view. While the utilitarian ethical theory according to Walton (2003) "reduces all ethical justification to a kind of cost benefit model," Kantian ethical theory as the author further points out "reduces all ethical justification to deduction broad ethical maxims or so called 'imperatives.'" While collecting customer data and making use of cookies in the conduction of ecommerce business may be of great benefit to both the customer and the seller in terms of convenience, these two actions essentially infringe on the privacy of consumers. This is particularly the case with cookies which track customers, thus exposing their browsing behaviors -- which some customers may be uncomfortable with. From a utilitarian perspective, the cost of the convenience in this case by far outweighs the benefits that accrue. From a Kantian perspective, the storage of private data as well as the utilization of cookies is also unethical. Basically, ecommerce sites store information and track or monitor users as a means to an end.

In an attempt to reduce chances of being monitored online, most users make use of such technologies as cookie managers. Products in this case include, but they are not limited to CookieCutter and… [END OF PREVIEW] . . . READ MORE

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How to Cite "Ethical and Legal Issues" Term Paper in a Bibliography:

APA Style

Ethical and Legal Issues.  (2014, February 8).  Retrieved August 3, 2021, from

MLA Format

"Ethical and Legal Issues."  8 February 2014.  Web.  3 August 2021. <>.

Chicago Style

"Ethical and Legal Issues."  February 8, 2014.  Accessed August 3, 2021.