(^474) Chapter 12 E-Commerce Overview
12.5E-Commerce Issues
Doing business on the Internet is not without its problems. The following are some
common issues:
●Intellectual Property.There has been some recent controversy regarding intellec-
tual property rights and domain names. Cybersquattingis the practice of register-
ing a domain name that is a trademark of another entity in the hopes of profiting
by selling the domain name to the entity. The Internet Corporation for Assigned
Names and Numbers (ICANN) sponsors the Uniform Domain Name Dispute
Policy at http://www.icann.org/udrp/udrp.htm, which can be used to combat
cybersquatters.
●Security. Security is a constant issue on the Internet. Distributed denial of service
(DDoS) attacks have shut down popular e-commerce sites. Some of these attacks are
carried out by script kiddies (teenagers with technical knowledge and sometimes mali-
cious intent) who literally have nothing better to do than cause havoc on the Web.
●Fraud. Fraudulent Web sites that ask for credit card numbers without any intent
of delivering products or with fraudulent intent are an understandable source of
concern for consumers.
●Taxation. State governments and local municipalities need sales taxes to fund edu-
cation, public safety, health, and many other essential services. When an item is
purchased at a retail store, the sales tax is collected from the purchaser by the
seller at the time of sale and periodically remitted by the seller to the state in
which the sale occurred.
When an item is purchased on the Internet, the seller usually does not collect and
remit the sales tax. In this situation, many states require that consumers file a use
tax and pay the amount that would have been collected. In reality, few consumers
do this and few states attempt to enforce it. Our local governments are losing rev-
enue to fund worthwhile programs.Table 12.1 Online PopulationCategory Percentage Who Use the Internet
Men 78%
Women 76%
Age: 18–29 93%
Age: 30–49 83%
Age: 50–64 77%
Age: Over 65 43%
Household Income: Less than $30,000 62%
Household Income: $30,000 to $49,999 84%
Household Income: $50,000 to $74,999 93%
Household Income: $75,000 or higher 95%
Education: Did not graduate high school 37%
Education: High school graduate 72%
Education: Some college 87%
Education: College graduate 94%