This paper examines the legal and ethical dimensions of conducting business online in the modern era. Beginning with a broad overview of the Internet's rapid integration into daily commercial and personal life, the paper then analyzes three specific ethical challenges confronting e-businesses: the practice of target marketing and its potential exploitation of vulnerable consumer groups, the growing responsibility to protect customers' personal information from security breaches, and the obligation to avoid deceptive business practices in online transactions. Drawing on sources in marketing, cyberethics, and consumer affairs, the paper argues that e-businesses bear significant ethical duties to their customers and that the regulatory and moral landscape of online commerce continues to evolve.
The Age of Information has created a new environment where many of the rules are still being written. Any new innovation in human activity requires a careful evaluation of the ethical considerations involved. Not since the introduction of steam engines during the Industrial Revolution replaced human workers, however, has a technology appeared with the potential to so dramatically reshape the human community and the ethical landscape in which business is conducted as e-business does today. This paper provides an overview of e-business and its implications, followed by an analysis of three potential ethical problems facing e-businesses today: target marketing, security of personal information, and consumer deception.
While the World Wide Web dates back to only 1993, Americans have been going online in increasingly large numbers, both at home and at work. By September 2001, more than half of U.S. households had Internet connections, and more than two-thirds were using a computer at home, work, or school (McAllister & Turow, 2002). In their book Cyberethics: Social & Moral Issues in the Computer Age, Baird, Ramsower, and Rosenbaum (2000) examined the impact of Internet development on practically every aspect of daily life. These authors found that people are increasingly communicating professionally and personally by e-mail, and they point out that "We shop on the Internet. Politicians are involved in e-campaigning. We argue and fight and pursue sex on the Internet. We do much of our research on the World Wide Web. Some do all of their work at the computer, at home" (p. 9).
More and more businesses are projecting an Internet presence, and gaming and educational applications are also increasing exponentially. Some observers even predict that doctors will eventually be able to practice medicine completely online. "The aggregate effect," Baird et al. note, "is a different kind of life. With this new life come new moral and social issues" (p. 9). Several of these issues are examined in the sections that follow.
Target marketing is a common practice used by a number of large producers, wholesalers, service institutions, and retailers in the United States (Peterson, 1991). According to Choudhury and Cui (2003), "The increasing efforts by marketers to target diverse groups of consumers call for a closer examination of the ethical implications of market segmentation and differentiated marketing" (p. 364). The practice of target marketing refers to the concentrated marketing of a product to a segment of consumers based on the attractiveness of that group in terms of factors such as its size and growth rate. "Theoretically speaking," Choudhury and Cui suggest, "there is nothing inherently wrong with targeted marketing" (p. 364).
Increasingly, however, cases of targeting potentially harmful products at vulnerable consumers have raised ethical concerns relating to justice and fairness — such as targeting sweepstakes at the elderly and handguns at women. According to Choudhury and Cui, "Even indirect and subtle targeting of potentially harmful products at vulnerable consumers has received criticism, such as targeting children with R-rated movies and using animal characters to promote cigarettes and alcohol" (p. 365). Even when consumers are not the direct targets of such practices, they are still far from completely secure in sharing their personal information online, which brings us to the next ethical issue for e-businesses: the security of personal information.
"Protecting customer data is a core ethical duty"
"Honest product representation prevents buyer harm"
The research showed that the Internet has changed the playing field for businesses of all sizes, and these trends are expected to continue well into the foreseeable future. In this changing environment, consumers must exercise a great deal of caution when conducting business online, but companies are also being held accountable for the types of marketing practices they employ and for how they protect the personal information entrusted to them by their customers. The three ethical issues examined here — target marketing of vulnerable consumers, inadequate protection of personal data, and deceptive product representation — collectively illustrate the significant moral responsibilities that accompany the growth of e-commerce. As the regulatory and ethical frameworks governing online business continue to develop, both consumers and companies will need to remain vigilant in upholding standards of fairness, transparency, and trust.
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