Ethical Problems of E-Commerce Essay

Ethics is a concern of humans who have freedom of choice. At the early ages of its emergence, the Internet only became the platform to search for information and to communicate with each other’s. But now, we can say that the Internet has been commercialized (thus the term 'e-commerce' emerged). Nowadays, we can see almost all trading and business activities, including banking, can be done online. This trend gives a lot of advantages both to consumers and business organizations. However, the bad side of e-commerce also cannot be ignored. What we mean by the bad side is about ethical issues in e-commerce. These issues involve irresponsible parties who always pose threats both to consumers and business organizations.

Customer privacy has been the most discussed issue concerning every kind of business transaction, especially in e-commerce when data is stored and transmitted electrically. Consider that most e-commerce business transactions, including accessing the website, providing personal information, ordering products, arranging payment via credit or debit cards, etc., occur indirectly throughout the Internet without customers’ control. Lots of consumers assume that their privacy is attacked by cookies – a record of repeat visitors for a particular site, and spam – irrelevant messages that are unexpectedly sent to users over the Internet. Nevertheless, consumers’ privacy is seriously invaded the most by such issues: identity theft (identity is stolen via the Internet or used illegally by other people), lost or stolen personal information (personal data is revealed unintentionally, stolen, or sold to another party), fake websites (where customers go to purchase products is fake to steal money from customers’ credit cards), or victim of spying and hacking (a customer’s account is spied or hacked by employers or strangers). For that reason, privacy becomes a critical concern, so companies first have to recognize ethical issues and then design a set of privacy policies to protect their customers. A framework of the privacy policy was provided by the United Kingdom’s Data Protection Act in 1984 as an ethics guidance for companies, consisting of the following principles: private information should be handled fairly and equitably; private information should be collected for a specific, accurate and authentic reason; private information should be adequate and not be kept in longer than the necessary time; a person must be informed by which his or her personal data is subjected to any other processes, including making decisions, being rectified, erased or blocked, or disclosed to other third parties; and appropriate security methods will be taken against any actions of violating rules of personal data privacy.

Security in e-commerce engages with confidentiality (refers to the assurance of securing data so that it is only available for authorized parties), availability (ensures a timely and reliable manner for authorized users to access personal data), integrity (makes sure that data is collected accurately and truthfully), authentication (confirms that the person or organization who are using the data is the one who claims to be), and nonrepudiation (guarantees that online customers or commerce partners cannot be wrongly denied accessing to the data). In e-commerce, it is important for the stakeholders to feel confident that online data collected by the companies is safe and every electronic transaction is secured. Many information-security breaches can not only have a bad influence on stakeholders but also damage the company’s shares and financial strength. For example, denial of service - an attack that makes access unavailable for users, and viruses imply the company’s incapacity of securing data causing customers to lose trust and loyalty and investors to stop buying company share prices. Moreover, unethical practices of security can lead to a company’s negative consequences in the long term, and individuals or organizations who violate rules of privacy and security can be suited by the victim and receive punishment by law. Therefore, to ensure e-commerce security, the business has to create strong data system management. A model for e-commerce security which is recommended by Turban (2009) includes senior management commitment and support, security policies and training, security procedures and enforcement, and security tools (hardware and software). This model combines many components of e-commerce: commitment, people, process, training, and technology. As shown in this model, e-commerce security begins with the commitment and support of the manager in which insecure procedures or immoral activities will not be accepted. Data will be collected and protected, and access to data will also be controlled from attack vectors or criminal communities by the company’s strict policies with the help of hardware and software such as firewalls or anti-virus programs. Employees would be trained on such policies, for instance, to not download data by smartphone or use the data outside the company to avoid information leakages. Solutions for security breaches should be pre-planned by the company for any instant problems.

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E-commerce trust is another ethical issue I am going to talk about. According to Parboteeah & Cullen (2013), e-commerce trust, also known as e-trust, indicates the situation that consumers believe in online trading where they make business transactions. For example, when a consumer purchases a product in an online shop, e-trust recognizes the expectation of that person to receive exactly the product he or she has ordered. A study shows that three factors included in e-trust are as follows: Internet trust – trust in the Internet’s performance as speed or integrity, vendor trust – trust in the producer or the organization who sells the product, and other parties trust – trust in the intermediary or the third party exists between the transactions (McCole, Ramsey & Williams, 2010). It is agreed that e-trust plays a critical role in commercial transactions on the Internet. Consumers are more likely to engage themselves in e-commerce with the company they trust the most. Companies will also be evaluated for having good ethical performance if they practice good e-trust and thus, develop customer relationships. Therefore, building trust that ensures a strong reputation over transparency and ethics and leads to satisfied clients becomes a crucial task of every company doing online business.

And finally, intellectual property. Along with security and privacy, intellectual property (IP) is the most discussed issue relevant to e-commerce concerning ethics, politics, and society. Generally, IP issues in e-commerce from the ethics side is about how individual as well as organizations respect the property that belongs to others. On the other hand, society has seen the issue as related to the value of protecting IP through the Internet, and from a political point of view, the question is how IP in e-commerce can be protected by the government while creativity and innovation can also flourish. IP includes all products of the human mind, which are both tangible (assets, physical properties, inventions, industrial designs, etc.) and intangible (such as knowledge, new ideas, and original expressions). For instance, the creation of an e-commerce site of a company will be protected in law by IP to protect the right to use this site solely by the company and earn financial benefits from that. The value of IP in e-commerce has increased recently due to the development of the Internet and technological innovations in the modern economy. Digital works such as music, pictures, software, designs, and models that are traded online make it possible for thieves to duplicate or steal. Besides, the Internet allows people to make a huge number of illegal copies of others’ works and distribute them to web users for free. The conception of innovations has significantly occurred that some businesses start taking no consideration for patterns, copyrights, or trademarks and freely use them. IP precisely lawfully controls this kind of area. IP consists of the protection of three main types, namely, copyright, patent, and trademark. Copyright protects literary forms of works, including writings, arts, music, motion pictures, and computer programs from being copied without the author’s permission. For example, even though the HTML code for creating web pages is available to every browser, it is not easy to make a copy and use it for commercial purposes legally according to the Computer Software Copyright Act. The only drawback of copyright is the inability to protect the fundamental idea behind the entire program. A patent refers to the protection of inventions. E-commerce business model patenting aims to encourage businessmen to invent valuable gadgets as well as advance the new technology distribution across licensing and shrewd imitation of the published patent. Trademark is defined as a form of intellectual property protection to identify and distinguish goods and indicate their source. In other words, trademark laws’ purpose is to protect both the public and the owner who spent time, money, and energy on taking the product into the market, from robbery or unlawful abuse. Some of the trademark laws regarding e-commerce can be mentioned such as cybersquatting (registration of domain names to trademark to make profit from authorized holders), cyberpiracy (registration of domain names to trademark to alter web traffic to their own sites), or meta-tagging (usage of trademarked words in a site’s meta-tags). The challenge of IP is the restriction of distribution, where Internet distributors have to pay for the owners to use their works. Nevertheless, it is critical for e-commerce to do business according to product licensing and patent, as e-commerce develops its value in business through intellectual property ethics and laws by having patent portfolios and trademarks that ensure benefits of their inventions and web-based works such as branding, customer recognition while preventing from piracy or uncontrollable theft.

Given the widespread use of the Internet and its commercialization, ethical issues are becoming relevant in relation to it as well. Issues such as customer privacy, security, trust in e-commerce, and intellectual property discussed in this essay are some of the most debated issues related to e-commerce.