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E-Business Lecture 4: E-environment

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Outline

•  Environment •  SLEPT framework

•  Social •  Legal •  Economic •  Political •  Technological

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Understanding Ethical, Social, and Political Issues in E-commerce •  Internet technology disrupts:

•  existing social and business relationships and understandings

•  Also in e-commerce!

•  Careful consideration needed: •  Costs and benefits of technology •  As yet no clear-cut legal or cultural guidelines

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E-environment

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Moral dimensions of an Internet society

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Macro-environment

•  Social

•  Ethical / Legal

•  Economic

•  Political

•  Technological

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Social factors

Examples: •  Information rights

•  Public welfare, safety, security

•  Access (cost, ease, limits, education)

•  Interaction of Internet with daily life

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Macro-environment

•  Social

•  Legal / Ethical

•  Economic

•  Political

•  Technological

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Legal and ethical issues

Examples: •  Access

•  Privacy

•  SPAM

• Cookies

• Copyright

• Content (Pornography, Gambling, Racism, Terrorism)

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Basic Ethical and Legal concepts

•  Ethics (NL: Ethiek): Study of principles that individuals and organizations can use to determine right and wrong courses of action

•  Responsibility (NL: verantwoordelijkheid) As free moral agents, individuals, organizations and societies are responsible for the actions they take

•  Accountability (NL: toerekenbaarheid): Individuals, organizations and societies should be held accountable to others for the consequences of their actions

•  Liability (NL: aansprakelijkheid): Extends the concepts of responsibility and accountability to area of law

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Legal and ethical factors

Main issues: •  Privacy and information rights

•  Intellectual property

•  E-commerce legislation

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Privacy and information rights

•  Privacy: •  The right of individuals to avoid intrusion into

their personal affairs • Digital and Information privacy:

•  The ability to control what information one reveals about oneself and what is collected (over the Internet)

•  The ability to control access and use of that information

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Privacy issues

More than just a legal issue: •  Ethical:

• Under what conditions should we invade privacy of others

•  Social: • Development of “expectations of privacy” and

privacy norms •  Political:

• Development of statutes that govern relations between recordkeepers and individuals

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Private information collected

•  Name, address •  Phone number •  Email address •  Social security number / BSN •  Bank and credit card accounts •  Age, gender •  Occupation •  Browser type •  Preference data •  Transaction data •  Clickstream data

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Information collection tools

•  Search engines •  Site transaction logs •  Cookies •  Shopping carts •  Forms •  Digital wallets

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Privacy regulations

•  EU Data Protection directive 95/46/EC: Member states shall protect the fundamental right and freedoms of natural persons, and in particular their right to privacy with respect to the processing of personal data

•  Conditions: •  Transparency •  Legitimate purpose •  Proportionality

•  Netherlands: – Constitution, articles 10-13 – Wbp: Wet bescherming persoonsgegevens – CBP: College bescherming persoonsgegevens

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Privacy regulations (2)

•  Current EU Data Protection Directive 95/46/EC does not consider important aspects like globalization and technological developments like social networks and cloud computing sufficiently

•  European Commission plans new directive: •  General Data Protection Regulation (GDPR)

•  Proposal for regulation: January 2012 •  Adoption: 2015? •  In effect: 2017? •  Discussions are ongoing….

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Digital privacy

•  EU Privacy and Electronic Communication directive 2002/58/EC and 2009/36/EC:

•  Security of services

•  Confidentiality of information

•  Data retention

•  Spam

•  Cookies

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Intellectual property rights

•  Copyright •  Protects original forms of expression (but not ideas)

from being copied by others for a period of time

•  Patent •  Grants owner an exclusive monopoly on ideas

behind an invention for a period of time

•  Trademark •  Trademarks protect public by ensuring it gets what it

pays for/expects to receive; protects trademark owner against piracy and misappropriation

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Other E-business legislation

• Marketing • Domain name registration:

• Cybersquatting

• Cyberpiracy

• Meta-tags abuse

• Deep linking

•  Framing

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Other E-business legislation

•  Electronic contracts and payments • Country of origin principle (EU): Law for the

contract = law of country of merchant • Distance-selling law (EU, based on mail order)

E-commerce site must provide easy access to: •  Identity, addres •  Features of goods/services •  Price information, tax, delivery costs •  Payment and delivery arrangments •  Terms of contract

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Other E-business legislation

Taxation •  European directives:

•  Supplier and customer inside EU: •  VAT in supplier country

•  Export from outside EU to customer inside EU: •  VAT + import in consumer country

•  Export from inside EU to outside EU: no VAT

•  Services: •  VAT in country of consumer

•  National incentives: •  “Promotional” taxation rules

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Macro-environment

•  Social

•  Legal / Ethical

•  Economic

•  Political

•  Technological

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Economic issues

Examples: • Globalisation • Weakening local firms / strengthening large

global firms •  Variations in economic performance affect

spending patterns and international trade

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Economic (and competitive) factors

•  e-Economy: The dynamic system of interaction between citizens, businesses and government that capitalize upon online technology to achieve a social or economic good.

•  Benchmarking framework: –  4 Layers: Environment, Readiness, Uptake and Use,

Impact

–  3 Stakeholders: Citizens, Businesses, Government

•  e-Maturity: –  Sophistication of a nation’s e-economy

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E-economy framework Source: Booz Allen Hamilton 2002

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Macro-environment

•  Social

•  Legal / Ethical

•  Economic

•  Political

•  Technological

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Political factors

•  Political environment:

– Legislation – Guidance and assistance

–  International actions

•  Organizations: – EU

– UNESCO

– National

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Governance

•  Primary questions:

•  Who will control Internet and e-commerce? •  What elements will be controlled and how?

•  Stages of governance and e-commerce

•  Government Control Period (1970-1994) •  Privatization (1995-1998)

•  Self-Regulation (1995-present)

•  Government Regulation (1998-present)

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Net neutrality

•  Feb 2014: •  Eerste overeenkomst tussen Netflix en Comcast om tegen

betaling een betere QoS voor Netflix customers (video stream) te garanderen.

•  Nederland 2012: •  Vrije toegang tot het internet gegarandeerd •  Het is verboden nieuwe diensten te blokkeren

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Macro-environment

•  Social

•  Legal / Ethical

•  Economic

•  Political

•  Technological

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Technological factors •  I think there is a world market for maybe five computers

Thomas Watson, chairman IBM, 1943

•  Computers in the future may have only 1,000 vacuum tubes and perhaps only weigh 1 1/2 tons

Popular Mechanics, 1949

•  There is no reason for any individual to have a computer in their home

Ken Olson, president DEC, 1977

•  640K ought to be enough for anybody Bill Gates, 1981

•  I am not convinced people want to watch movies on a tiny little screen

Steve Jobs, 2003

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Diffusion-adoption curve (Rogers, 1983)

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Gartner hype cycle

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Gartner hype cycle

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Gartner hype cycle 2014

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Gartner hype cycle 2013

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Gartner hype cycle 2012

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Summary

•  Macro-environment •  Social

•  Legal / Ethical

•  Economic

•  Political

•  Technological

•  Next: •  Werkcollege

•  Next week: •  E-business strategies