Online Ethical, Legal, and Regulatory Issues in B2b Versus B2c

Online Ethical, Legal, and Regulatory Issues in B2B versus B2C

Introduction

Companies doing business on the Web must be certain of their ability to manage the liabilities that can emerge as a result of today's online business environment. This environment includes laws and ethical factors that are sometimes different from those in the brick and mortar setting. The online environment often forms a network of customers who can have considerable levels of communication with each other. Online businesses that break the law or violate ethical standards, therefore, can face swift and harsh reactions from customers and other stakeholders who will quickly learn of the businesses' unscrupulous online behaviors. Online customers also have much more interactive and complex relationships with online businesses than they do with traditional companies. This is because Internet technologies enable companies to build Web sites that can be customized to meet the specific needs of their B2B or B2C customers (Schneider, 2004). Online businesses can use this property of the online environment to manage the legal and ethical requirements of both business and consumer clientele.

Ethics

Ethics are especially important in the B2B framework because businesses selling to other businesses treat their customers more as partners and rely on reciprocal information sharing for developing mutually beneficial partnerships (Pepper, 2004). Because the relationship is more extensive, every time there is an exchange of information or data, it must be meticulously tracked and labeled as general business or confidential as appropriate (Dada, 2004).

B2B merchants must prevent unauthorized access to customer information on their Web sites, and protect the privacy of their customers / partners both technically and legally. Businesses such as Adobe software, many of whose customers are other businesses, accomplish this by having customized pages for each partner which are accessible only through login/password combinations issued by Adobe (Pepper, 2004).

In the B2C framework, ethics are important in that they establish and promote the credibility of the business to its online customers. B2C merchants, therefore, also must safeguard their customers' information, but without the level of customization offered by B2B businesses. Amazon.com for example asks for a username and password each time a site visitor asks for any type of customer account information, but they do not offer customized pricing for each customer as a B2B site would.

Legal Issues

Legal issues such as liability, contract validity and jurisdiction are equally important in both B2B and B2C frameworks, but they are slightly different because of the varying needs of B2B versus B2C customers.

For example in the B2B framework the use of multiple networks and trading partners as well as various contacts within trading partner organizations make the documentation of responsibility challenging. Here the use of online enterprise software that tracks activity by individual user through the issuance of multiple usernames and passwords both among different partners and within a partner organization can alleviate this difficulty. Large printers such as Fry Communications, for example, who print for several different publishers, solve this problem through issuing multiple usernames and passwords under each different publisher's online account. This allows multiple editors, production mangers and artists to submit work and check the progress of their particular publication at Fry's various facilities simply by logging in under their companies' accounts using their individual usernames and passwords.

In B2C business relationships, international laws often come into play because of the wide reach that the internet creates. If, for example, a customer in Argentina buys a Maytag dishwasher from the Sears online store, how can he or she enforce the terms of the warranty that comes with it since it is only regulated under the laws of Maytag's home country, the United States? Ethical business behavior can bridge the legal gap. In this case, for example, Maytag can arrange to have warranty service work done through Argentinean subsidiaries having first clearly spelled out the terms of the sale and the details of the warranty on the Sears Web site.

Regulatory Issues

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