E Marketing Ethical and Legal Issues

E-Marketing Ethical and Legal Issues

E-Marketing: is the use of information technology in the processes of creating, communicating, and delivering value to customers, and for managing customer relationships in ways that benefit the organization and its stakeholders. Its only one part of an organization's e-business activities.

The result of information technology applied to traditional marketing:

1. Increases efficiency and effectiveness

2. Transform many marketing strategies


Compare and contrast ethics and law.The implications of ethical codes and self-regulation.Some of the main privacy concerns within traditional and digital contexts.Copyright, patent, trademark, and data ownership issues related to the Internet.Highlight key ethical and legal concerns related to online expression.


Software Piracy40% of all software worldwide was pirated in 2001.Piracy resulted in a US$10.7 billion loss for firms.840,000 Internet sites sold counterfeited software.Vietnam, China, Indonesia, Ukraine, and Russia have highest piracy rates.Microsoft believes that education is the best weapon against piracy. Do you agree?


Ethics 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.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


The Problem of Self-Regulation

What are the roles of formal laws vs. free operation of the market?Supporters of self-regulation stress the private sector’s ability to identify and resolve problems.Critics argue that incentives for self-regulation are insufficiently compelling and true deterrence will not be achieved.


PrivacyThe concept of privacy has both ethical and legal aspects.There is legal confusion regarding privacy.

No specific privacy provision within the U.S. Constitution. Privacy has been addressed in the common law of the courts.

Within society, privacy interests compete with concerns for safety, economics, and need for association with others.


Privacy Within Digital ContextsAMA 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 Double-Click, have traditionally recorded users’ click streams to form user profiles for marketing purposes.Controversy arose in 2000 when Double-Click acquired consumer names, addresses and buying histories and planned to combine the offline data with click stream 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 Double Click'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 agreement include:

Obligation to provide notice of data collection. Ban on combining existing data with personal information unless opt-in permission is obtained.


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


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.


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. Cyber squatting involves the registration of domains that resemble or duplicate existing ones.


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– Shrink-wrap or break-the-seal licenses– Click wrap licenses where the user is required to click a button to accept

the terms• Legal trend favors enforcement of software licenses.


Online Expression

• Freedom of expression is protected by the First Amendment.• Internet technology has resulted in what many consider inappropriate or

untargeted types of consumer contact.– Spam is the mass distribution of unsolicited electronic mail.

• CAN-SPAM Act creates a framework for email marketing.• Expression directed to children remains a highly visible issue within online

law and ethics..


Emerging Issues• Online governance

– The Internet Corporation for Assigned Names and Numbers (ICANN) was formed in 1998.

• Jurisdiction – The ability of a court or other authority to gain control over a party.– Traditionally based on physical presence.– Treaties may provide for international resolution and enforcement.


Emerging Issues• Fraud

– The use of deception and false claims to obtain profit.• The Internet provides opportunities for novel deceptions.

– Spoofing is the use of e-mail or Web sites to impersonate individuals or corporations.

• The FTC, FBI, and state agencies have increased their efforts to track and prosecute fraudulent conduct

Documents

E Marketing Ethical and Legal Issues