The Ethics and Regulatory issues that impact the future of the internet

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Introduction

In late April 2011, one of the biggest data breaches in corporate history took place. Hackers penetrated Sony's Play station and Online Entertainment services and reportedly made off with 102 million customers' names, addresses, user names, and passwords - and possibly their debit and credit card numbers (Tsukayama, 2011). In total, the attacks may cost Sony between $ 1 billion and $2 billion directly (Nakashima and Robertson, 2011).

A lawsuit was filed accusing Sony of not taking "reasonable care to protect, encrypt and secure the private and sensitive data of its users. In October 2010 the Wall Street Journal reported that Facebook had shared its user's personal information with dozens of advertising and Internet tracking companies, sparking a wave of outrage around the world.
Firms are now part of multiple social networks. Firms are social networks, which interact with many other social networks as represented by their external stakeholders. The emergence of virtual networks has increased the interconnectivity between ethical issues. For example privacy issues may impact corporate transparency or information reliability. This has now led to a new concept called 'Network Ethics' (Vaccaro, 2009).

Ethics

The internet threatens to make good the prediction that 'what is whispered in the closet shall be proclaimed from the housetops'. Therefore firms should be extremely careful when disclosing information, due to the risk of it being exploited by competitors, activists or those with criminal intentions. Virtual intrusions are more harmful than physical ones, as large companies like Google, Sony, Microsoft and others have discovered. Cyber attacks have involved the theft of passwords as well as the blueprints of software codes for new applications.
Data breaches have apparently cost US companies on average $204 per lost consumer record as of 2009. (Betterley Risk Research, 2010).
Epsilon and its customers, JP Morgan Chase, Verizon, Best Buy, Target, Marriott, Hilton, Lockheed Martin. IMF, Sega, citigroup were all hit by cyber attacks. The caveat with regard to cyber attacks is that reputed companies would rather fly below the radar than admit that their sites have been compromised.

The Regulatory Framework

"Internet protocols used today were in many cases built on top of the original internet protocols developed almost 40 years ...