Global Issues

Abstract

The object of this paper is to establish a set of principles for a global legal and ethics policy for an e-business. The consultant team preparing this legal and ethics policy evaluated current legislation and regulations in both the global and U.S. arenas, with particular attention given to issues surrounding privacy, online contracts, intellectual property rights, unfair competitive and trade business practices, security, and dispute resolution strategies. There will also be discussion and analysis of the differing ethical principles affecting the U.S. and its major trading partners in the global market. The differences between following ethics or the letter of the law will also be analyzed.

Global Issues and Ethics in E-Business

In order to create an effective e-business, it is imperative to create a legal policy. In conjunction with any legal policy, a company should incorporate ethical standards for all employees in the course of all business transactions and decisions. By utilizing ethical business practices, online business will be considered above reproach, as ethics are a step above what the law requires. The dictionary describes ethics as "the discipline dealing with what is good and bad and with moral duty and obligation (Merriam-Webster Online Dictionary, 2006)."

While the Internet is no longer a newborn, it remains an industry in its infancy. Like every baby, its first steps are tentative and unsure. Mistakes are made and falls are many. The companies that are being born within this new technology are focusing on the opportunities and possibilities; perforce, often they are less concerned, than more established, brick and mortar businesses, with legal and ethical practices. Nevertheless, the decisions that they are making and the practices that they are adopting have a tremendous impact on the world around them (Maury & Kleiner, 2002, p. 21). As regulatory boards and online businesses self-regulate and begin to develop laws on how to control the Internet market, many companies are faced with the question of laws versus ethics in conducting business online.

An Evaluation of Laws and Regulations Affecting E-Commerce

There are many different countries engaged in commerce with equally as many sovereign legal systems that govern commerce in the world market. The Internet is another, more available, entrant into the world market. The global effect internet popularity creates is encouraging disparate countries to see the need of implementing world trade and online regulations. There are diverse issues, as well, that the Internet presents to each country; however, the most important issues for U.S. e-businesses and the U.S. major global trading partners includes online contracts, privacy concerns, intellectual property, deceptive practices, security, and dispute resolution issues.

Online Contracts

Shrink-wrap agreements are the terms and conditions of use that accompany software distributed in the local computer stores. Typically, buyers can find the terms and conditions of use printed on the outside of the software box or in an envelope attached to the box, wrapped in "shrink-wrap plastic." They usually read something like, "By opening the packaging or using the software, you are bound by the terms and conditions of the license." Initially, the enforceability of a shrink-wrap license as a contract was questionable. After all, a prerequisite to valid contract formation is the unequivocal meeting of the minds. With shrink-wrap, the consumer pays first and is notified subsequently of the terms of the contract.

Click-wraps or Web-wraps are a variation of shrink-wrap. There are two main ways to enter into a click-wrap or web-wrap agreement. A party may "Type and Click" where the consumer must type "I accept" or something synonymous in an on-screen box, and then click a "send" button of some sort to signal acceptance of the contractual terms. Usually without filling in the assent box, a user cannot proceed to use the service. The second way to enter into a click-wrap agreement is through "Icon Clicking." Here, an online user clicks "I accept" to website terms and conditions of use online. The same term can apply to software when a person clicks "I accept" in order to complete installation of the software.

Courts routinely uphold form contracts, even if one party claims that it did not read the contract or even if one party claims it read the contract, but did not understand it. Under the objective theory of contract interpretation, enforcement of a term in a contract does not depend on whether a particular party now seeking relief understood a particular term in a contract. Rather, a court will ask whether a reasonable person would have understood the term at issue. This theory of interpretation is called the "reasonable person" theory http://www.becker-poliakoff.com/publications/article_archive/click_wrap.htm.

Under the objective theory of contract interpretation, a court interprets a contract through the mind of a reasonable person. For example, if a complicated term in a contract is buried in a boilerplate contract and it is a term that a reasonable party could not understand after careful reading of the contract, the court may limit its enforceability. If the boilerplate contract went further by hiding the complex and maybe controversial term on the backside of a page or in small, hard to read print, the court may also limit its enforceability (http://www.becker-poliakoff.com).

Privacy Issues

E-commerce sites in the U.S., must post a public policy notice concerning the privacy practice on the site. The agreement, or a separate policy statement, should disclose to what extent the site collects information on users, the type of information collected, whether the individual user can be identified, what the information collected is used for, who has access to the information, whether the information is sold or otherwise made available to third parties and how the user can restrict the use of the information.

In the U.S., privacy on the Internet is largely self-regulated. In the global market; however, there may be more strict specific requirements. There have been efforts in the past several years, by businesses that deal with personal information, to create industry standards protecting the privacy of consumer information stored in databases and available through the Internet. Internet privacy is coming under added scrutiny based in part on prominent and highly controversial data collection and sharing practices, advances in data mining,