Ethical standardsare personal or business practices or behaviours which are generally
considered acceptable by society. A simple test is that acceptable ethics can be described
as moral or just and unethical practices as immoral or unjust.
Ethical issues and the associated laws developed to control the ethical approach to
Internet marketing is an important consideration of the Internet business environment
for marketers. Privacy of consumers is a key ethical issue on which we will concentrate
since many laws have been enacted and it affects all types of organisation regardless of
whether they have a transactional e-commerce service. A further ethical issue for which
laws have been enacted in many countries is providing an accessible level of Internet
services for disabled users. We will also review other laws that have been developed for
managing commerce and distance-selling online.Privacy legislation
Privacyrefers to a moral right of individuals to avoid intrusion into their personal affairs
by third parties. Privacy of personal data such as our identities, likes and dislikes is a
major concern to consumers, particularly with the dramatic increase in identity theft.
According to the Guardian(2003a), quoting the Credit Industry Fraud Avoidance System
(CIFAS), the UK’s fraud prevention service, it is the fastest-growing white-collar crime,
generating a criminal cashflow of £10m a day. In 1999, there were 20,264 reported cases
of identity theft in the UK; but by 2002, that figure had reached 74,766, and in 2003,
the figure was 101,000. Identity fraud involving credit and debit cards rose by 45 per
cent in 2003.
Yet, for marketers to better understand their customers’ needs, this type of informa-
tion is very valuable. Through collecting such information it will also be possible to use
more targeted communications and develop products that are more consistent with
users’ needs. How should marketers respond to this dilemma? An obvious step is to
ensure that marketing activities are consistent with the latest data protection and pri-
vacy laws. Although compliance with the laws may sound straightforward, in practice
different interpretations of the law are possible and since these are new laws they have
not been tested in court. As a result, companies have to take their own business decision
based on the business benefits of applying particular marketing practices, against the
financial and reputational risks of less strict compliance.
Effective e-commerce requires a delicate balance to be struck between the benefits the
individual customer will gain to their online experience through providing personal
information and the amount and type of information that they are prepared for compa-
nies to hold about them.
What are the main information types used by the Internet marketer which are gov-
erned by ethics and legislation? The information needs are:1 Contact information. This is the name, postal address, e-mail address and, for B2B com-
panies, web site address.
2 Profile information. This is information about a customer’s characteristics that can be
used for segmentation. They include age, sex and social group for consumers, and
company characteristics and individual role for business customers. The specific types
of information and how they are used is referenced in Chapters 2 and 6. The willing-
ness of consumers to give this information and the effectiveness of incentives haveLegal and ethical issues of Internet usage
Legal and ethical issues of Internet usage
Ethical standards
Practices or behaviours
which are morally
acceptable to society.
Privacy
A moral right of
individuals to avoid
intrusion into their
personal affairs.
Identity theft
The misappropriation
of the identity of
another person,
without their
knowledge or consent.