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E-Commerce: Personal Information, Fair Information Practice, Ethics

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1. Name some of the personal information collected by Web sites about their visitors.

2. What are two core principles of the FTC's Fair Information Practice principles?

3. What basic assumption does the study of ethics make about individuals?

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Consumer Reports writes that there is no limit to what can be collected by websites. One big area of concern is credit reports and credit history. Three major firms collect this data from various sources (especially the web), and these are Equifax, Experian, and TransUnion. They can collect data concerning your financial state, income, tax status, legal status, court cases and credit card history, just to name a few.

The second big area is insurance claims. Collecting information here is big business, and the insurance industry is willing to spend quite a bit to gather as much information on its people as possible. The big company here is ChoicePoint, which specializes in all forms of data collection to be sold to insurance firms and banks. Recently, ChoicePoint was fined $15 million by the FTC for not properly securing its information.

The third big area is health. The major firm here is a consortium, called MIB Group, that collects health data and shares it with insurance firms, among other institutions. Now, your medical histories are not reported here, but many of your insurance claims are. Other firms collect information for drug manufacturers. Whenever you apply for health insurance, you sign a waiver that says the insurer can go to MIB and get whatever information it needs.

There are other areas related to the big three above: rental histories (old apartments, etc), mailing list ...

Solution Summary

The following posting discusses aspects of e-commerce, including personal information, core principles and basic assumptions.

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Legal, Ethical and Tax Issues in E-Commerce

The following is a case with four questions. Please give me a sound basis for the answer to each question.

Ellen Carson is the author and illustrator of a successful series of children's books that chronicle the adventures of Ellasaurus, a four-year-old orange dinosaur. Ellen has done well with the books, but her business advisors have told her that she could earn considerably more money by creating a merchandising business around the Ellasaurus character. Following this advice, she has created Ellasaurus Products Enterprises (EPE), a company that has begun developing and marketing Ellasaurus toys, stuffed animals, coloring books, pajamas, and Halloween costumes.

EPE has had some success in its attempts to get major retailers to stock the Ellasaurus product line, but Ellen is concerned that retailers might not be willing to take on a new and unproven product. She would like to create a Web site through which EPE could sell its merchandise directly to customers. She also sees the Web site as a way to build customer loyalty. Ellen envisions a site with a number of portal features in addition to the product sales. For example, she would like to offer online games, chat rooms, e-mail accounts, and other activities that would promote EPE products and her books.

The Ellasaurus book series appeals to children that are between four and six years old. Ellen expects the EPE product line to appeal to children in about the same age range. Ellen has visited sites such as Hello Kitty and Nick Jr., which appeal to similar age groups to get ideas for the site. She would like the site to be appealing to her main audience, but she would like to obtain registration information from site visitors so EPE can send e-mails with information about new products and Web site features to them.

Ellen plans to limit the Web site's merchandise sales to U.S. residents at first, but she hopes to begin selling internationally within a few years. The site will allow visitors from any country to register and participate in the online portal features.

My questions are:
a. Describe the Intellectual property issues that might arise in the operation of the Web site
b. The ethical issues that Ellen faces because of the ages of her intended audience members
c. The laws with which the site must comply when it registers site visitors under the age of 13 and how Ellen can best comply with those laws
d. The sales tax liabilities to which the Web site will be exposed. Assume that Ellen will operate the site from her home office in Michigan and that EPE will manufacture the merchandise in Texas. The merchandise will be warehoused at EPE distribution centers in New Jersey, Ohio, and California.

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