Internet laws and regulations

Internet Ethics and the consumer's private existence in an unstable regulatory environment -- untapped economic waters in a wild, wild west of identity theft and chronic consumption

When it comes to Internet ethics, even in the absence of legal requirements, businesses must themselves self-regulate when it comes to consumer privacy. If they do not, it is likely that the government will step in to do so, as the government has done in the European Union. This will only hurt businesses economically, and do damage to the equal ethical obligation corporations owe to shareholders. Furthermore, good business sense is about trust between the consumer and the business, and this is not honored when businesses unfairly spy upon casual surfers of their websites, or use consumer data for their own profit as well as research and marketing purposes.

Americans, according to a recent poll cited by J. Hodges in the journal of the Internal Auditor, now consider the Internet to be a more important source of information than radio or television, yet distrust its intrustive potential in their daily lives. This was the conclusion of the 2001 study "Surveying the Digital Future," a recent University of California at Los Angeles (UCLA) area of long-time research. In addition, more than two-thirds of U.S. residents have regular, continuous access to the Internet in their homes, fifty give percent report frequently using e-mail, and fifty two percent have made purchases online. (Hodges, 2001) Ever since the age of direct mail, of course, consumers have had access to targeted advertising they may reject or accept. (Ewald, 2003) But the plurality of uses, of personal, business, and commerce, that most Americans deploy the Internet, makes the use of the Web particularly ethically dicey -- a business intrudes into the office of another business when an employee surfs for products online at work, and spam regarding advertising can intrude into a private conversation between parent and child while they 'talk' online.

Still, when Americans use something so vigorously and enthusiastically, they must trust the medium as ethical, correct? Yet despite these figures, two-thirds of the 2,096 Internet users and non-users polled believe that going online puts their privacy at risk. (Hodges, 2001) There is still a pervasive sense that their data may be sold or used for unscrupulous purposes, even while they use the Internet for innocent means. Thus, although Internet connections are ubiquitous to almost every workplace and home, the World Wide Web remain a tumultuous sea of uncharted ethical legal waters, in terms of consumer and user privacy as well as the regulatory issues regarding intellectual property that affect the content disseminated on the net.

The most pressing legal concerns and ethical, regulatory restrictions have centered on the dissemination of music through sites such as Napster, the controversial online music-sharing site. But today, the legal rights of artists compete for media attention with many interests regarding privacy and intellectual property for media contention. Some might contend that the Napster issue of the 1990s pales in comparison to the even greater ethical issues of making the Internet safe for ordinary consumers, so they may engage in social and business transactions such as paying their bills online, checking what doctor visits will be compensated by their health insurance providers, and submitting their resume and work related data to employees online. Consumers should be able to do so without putting their privacy at risk

Consumers are now used to the fact that computers and the Internet store data regarding consumer's health care, insurance and other important sectors of everyday life. They have perhaps even grown accepted and jaded to the emotional manipulations of advertising in their daily consumptive lives. (Kaess, 2004) Advertising is everywhere in daily life, and nowhere more so than the web. Businesses comfort themselves with the frequently cited ethical claim that the interactive nature of many web sites and discussion groups create or implied waiver of confidentiality for clients. You surf, you pay with your privacy -- click on a pop up, and your data may be used for marketing purposes to convey the typical profile and response to a specific advertising technique.

But when consumers are not simply enticed, but compelled to use certain sites, this seems like an ethically specious claim. Consider how many consumers are encouraged to conduct their banking online safely and securely, and banks limit hours to cut costs of 'real world' as opposed to 'virtual world' banking that requires no tellers and little overhead office costs. Consumers are encouraged to use such sites, even compelled to do so, and businesses profit by gaining greater access to their personal data, as the history of their screen name's activity on the site, from what advertising they spy on the site, to their interest in certain banking services may be accessed, used for advertising purposes, and even sold to other marketers. Surely, this is not ethical if the consumer is not aware of the practice.

But advertising and a free society require consumers to be informed and chary about media consumption. Paranoia about over exposure, warn some First Amendment activists, can ultimately limit freedom of speech, as the Internet may be one of the last places where individuals can freely air their view in an atmosphere of open discourse -- does not freedom imply a certain level of insecurity and risk. Also, another argument consumer rather than business ethical responsibility regarding use of the Internet is that consumers are buying anti-virus software and pop up protections for consumer's browser screens, designed to shield consumer and user identity from infiltration and to minimize intrusions by advertisers. But as consumers purchase more shields, hackers and even entrepreneurs develop more ways to circumvent such protections. One can always slam a door on a salesman, but ethically, companies are all over the Internet, making offers for software products for anonymous Web browsing and computer security, which includes unlisted IP address, encrypted Web surfing, and hacker protection from finding one's identity -- businesses whose very structure and existence challenges the nature of conventional ethical practices. Through a phenomenon known as cookies, the activities of an Internet user can be monitored by marketers and other interested parties, even while an individual surfs the web and accidentally clicks onto an advertising site -- while in real life, an individual who accidentally wanders into a store can always leave, without leaving any information for the store to use in his or her wake. Although cookies can be suspended by one's computer browers, to access online data for one's bank or one's health plan, often one must enable cookies, thus opening one's computer to attacks by interested parties as to one's buying habits, or even one's name and social security number. Again, while consumers can verbally refuse to give personal information to store clerks, they cannot similarly guard their privacy online, and their first amendment protection to free speech by witholding information is threatened by the right of business' supposed right to access disclosed information.

According to Tom Venetis in Consumer Dealer News, Europe has prefeered to err on the side of regulating the Internet, risking stifling free speech of website content editors. In contrast to the United States, Europeans have sought more stringent laws to protect personal information online, not trusting businesses to ethically police themselves. But true to form and honoring the First Amendment, "Americans want to leave that to free market," even though Americans may often suffer the abuses of the Internet regarding privacy issues of health care and billing even more than Europeans. This is because many of the industries on the web, such as health care and billing for routine expenses such as utilities, feature a variety of potentially hacker-friendly websites in the United States, while these expenses often fall under government control in the European Union, and thus must conform to state standards regarding website design. Americans, however, may not trust big business, but they trust the government even less to regulate personal speech and freedom. Emotionally, businesses must not take advantage of this 'brand trust.' (Kaess, 2004)

However, the European and United States split approach to Internet laws also shows the difficulty of legally regulating content upon an international medium such as the Web, which offers an open sea of opportunities for those who wish to stand outside the laws and conventional ethical boundaries. How can a European nation make a certain level protection legal within its borders, when in America it constitutes freedom of speech? There is an ideological and legal fight brewing between Europe and the United States over how to handle Internet privacy rules that cannot be easily settled without cooperation as well as conflict. More sensible than regulation might be companies to transnationally agree to ethical limits regarding disseminating consumer data accrued over the web, or, barring that, international companies allowing consumers to waive the right to disclose certain information, often required to register at a site, but are unrelated to payment and distribution of goods, such as whether the consumer is single, married, etc.

Regulations placed on the free flow of information could hinder the growth of electronic commerce, but unregulated attacts on consumer privacy could be similarly limiting. "Businesses using the Web are no better, it seems, at honoring or protecting a person's private information.," notes Venetis (1998), than other businesses in the real world, as a recent survey of 1,400 businesses revealed -- but unlike an inquisitive survey required upon one magazine subscription, someone who innocently surfs several websites can disseminate information to an undreamed of plethora of sites. Web sites analyzed by the FTC found that many are not very up-front about telling users what the personal information they gather is going to be used for. "They also rarely give persons any chance to opting out of giving personal information," circumventing the idea that consumers chose to give up their privacy by accessing a site. "The reason for this is simple - money. Personal information in not just valuable for the companies who gather it to better target and track customer preferences and buying habits. But that same information is valuable to others trying to sell goods and services. And they will pay big bucks to get that information, which is why many companies don't want to offer consumers ways of protecting their personal information." (Venetis, 1998) Even if European businesses are prevented from doing this, European consumers who access American business sites on the web will still glean information, and protections provided by indivdiual country websites do little to help international consumers who may accidentally utlize an insecure website sponsored by another nation.

But while it is in the business' short-term interest to accrue data about consumers, it has a long-term interest in ensuring consumer trust. It is hypocritical to use consumer data to sell music online, while condemning consumer use of protected information. Until recently, consumers all over the world benefited from Internet piracy by downloading music and even entire novels gratis, at the deteriment to the creative talent, agents, and businesses who sponsored that talent. But as businesses rightly claim the right to profit from a product, and the right of artists to own their own talent, consumers likewise have a right to own their identities and information about their buying habits.

The freedom of the Web thus imperils and empoweres both businesses and consumers in discomforting ways. Also, this freedom can hurt business in the long run, as when people don't feel safe giving out personal information out via the Internet they may refuse to patronize Internet sites of commerce. A majority of the respondents to a recent poll regarding Internet shopping stated that while they "believe the World Wide Web is a significant technology that will remain part of their future, but they still mistrust it. More than 60% of the surveyed non-users and 35% of users suspect that data collected by e-tailers and others is distributed or used for purposes other than originally intended." (Hodges, 2001)

To stem this free for all, Europeans are proposing strict regulations on how personal information is gathered and what can be done with it, calling privacy online fundamental and ethical human right that needs to be protected by the Union, and calling upon the United States to join them in the fight to regulate the ethical use of privacy on the web. In Europe today, "companies doing business online will have to offer people full disclosure as to "how their information be used and ways for them to opt out if they don't agree with it. That means if users don't want private data used in a sales database, in a subscription list or sold, they would have the right to say no up front. The company would have to honor that decision or face some stiff penalties." (Venetis, 1998) The argument for regulating ethics with the law is that, while after all, a consumer can cancel a magazine subscriptions if he or she discovers his data has been released to other companies, but cannot if software detects similar information and disseminates it silently online, without his or her consent.

But the law can only go so far in regulating an international medium, where just as many risks are posed by those on the shadows of the law. For instance, the consumer still has little control over how his or her information may be accessed by hackers in enclosed intranets, as opposed to the Internet itself, as data may be stored regarding personal information by a healthcare company that is accessed by, for example, a potential employer or a private investigator, if that healthcare company does not deploy adequate security protections. The government may demand that certain businesses install levels of security to protect such data, and prohibit the use of such data, but legislation still remains in utero, rather than solidly in place as in other areas of life. It may be better, as more and more offices and businesses are finding it necessary, to have acceptable use policies for computers and related technology set by the company, because often individual industries and compaines know how their databases may be impacted most easily. (Lofton, 2004)

Clearly the right to protect one's security cannot be entirely left up to the marketplace and the consumer -- many consumers have no choice to use certain websites -- their healthcare company may record what tests and procedures they have had done on a company intranet that is open to hackers, and a patient cannot refuse to have such data stored as he or she can refuse to give to charities. Tom Ventis notes that he often cancelled his membership to certain organizations and stopped using certain services, "because they would not stop selling my information to others," or "to retailers such as Radio Shack when they ring up my bill." (Ventis, 1998) In other words, he used the ethical power of choice of his own personal behavior, rather than looking to the company. But the opennes of the Internet and intranets cannot be controlled as easily by the consumer. This is why, perhaps," four out of five Americans participating in the study doubt the U.S. government's ability to maintain computer security and privacy," hardly a ringing endorsement of federal authority. (Hodges, 2001) Rather, the 1,000 people polled for a recent report on Internet security said they trust business innovators and entrepreneurs more than the government when it comes to protecting consumer information on computer databases -- they trusted, they said, businesses to develop better consumer protections and also that it was in businesses' interest as well as consumers to protect information. (Hodges, 2001)