Describe the five-step process that can be used to analyze an ethical dilemma. What other guidelines are there to help in understanding a complicated ethical or moral situation?

Answer:  The five-step process is:

1. Identify and describe the facts. Find out who did what to whom, and where, when, and how. It helps to get the opposing parties involved in an ethical dilemma to agree on the facts.

2. Define the conflict or dilemma and identify the higher-order values involved. Ethical, social, and political issues always reference higher values. Otherwise, there would be no debate. The parties to a dispute all claim to be pursuing higher values (e.g., freedom, privacy, protection of property, and the free enterprise system). 

3. Identify the stakeholders. Every ethical, social, and political issue has stakeholders: players in the game who have an interest in the outcome, who have invested in the situation, and usually who have vocal opinions. Find out the identity of these groups and what they want. This will be useful later when designing a solution.

4. Identify the options that you can reasonably take. You may find that none of the options satisfies all the interests involved, but that some options do a better job than others. Sometimes, arriving at a "good" or ethical solution may not always be a balancing of consequences to stakeholders.

5. Identify the potential consequences of your options. Some options may be ethically correct, but disastrous from other points of view. Other options may work in this one instance, but not in other similar instances. Always ask yourself, "What if I choose this option consistently over time?"

Other things to consider when appraising a dilemma include basic ethical concepts such as responsibility, accountability, and liability and how these play into the situation. Additionally, you can judge the situation against candidate ethical principles, such as the Golden Rule, the Slippery Slope theory, Universalism, the Collective Utilitarian principle, Risk Aversion theory, the No Free Lunch theory, the New York Times test (Perfect Information rule) and the Social Contract rule. Actions that do not easily pass these guidelines deserve some very close attention and a great deal of caution because the appearance of unethical behavior may do as much harm to you and your company as the actual behavior.

Explain why the taxation of e-commerce raises governance and jurisdiction issues. 

Answer:  The taxation of e-commerce illustrates the complexity of the governance and jurisdictional issues in the global economy. Most of the issues surround the sales tax imposed by various states or countries on products sold to residents of their state or country. Governments the world over rely on sales taxes to fund various types of government initiatives and programs including the building of roads, schools, and sewers or other utilities to support business development. 

In the United States, between the fifty states and the multiple counties and municipalities, there are thousands of different tax rates and policies. For example, in some states food is not taxed at all and there are a myriad of different exceptions and inclusions depending on the locality. However, with the rise of e-commerce and virtual storefronts, the question is raised as to what locale a virtual storefront is considered to be located in. The development of MOTO (mail order/telephone) retail in the 1970s began the discussion on the taxing of remote sales. State and local tax authorities wanted MOTO retailers to collect taxes based upon the address of the recipients, but the Supreme Court has ruled that states cannot force MOTO retailers to collect taxes unless the business has a physical presence in the state. Legislation to the contrary has never been able to garner sufficient support in Congress due to pressure from both the catalog merchants, leaving intact an effective tax subsidy for MOTO merchants. 

The merger of online e-commerce with offline commerce further complicates the taxation question. Currently, almost all of the top 100 online retailers collect taxes when orders ship to states where these firms have a physical presence. But others, like eBay, still refuse to collect and pay local taxes, arguing that the so-called tax simplification project ended up with taxes for each of 49,000 ZIP codes, hardly a simplification. 

The taxation situation is also very complex in services. For instance, none of the major online travel sites collect the full amount of state and local hotel occupancy taxes, or state and local airline taxes. Instead of remitting sales tax on the full amount of the consumer's purchase, these sites instead collect taxes on the basis of the wholesale price they pay for the hotel rooms or tickets. Today there is no integrated rational approach to taxation of domestic or international e-commerce. In the United States, the national and international character of Internet sales is wreaking havoc on taxation schemes that were built in the 1930s and based on local commerce and local jurisdictions.

Describe the purpose of intellectual property law and outline the main types of intellectual property protection.

Answer:  The purpose of intellectual property law is to balance two competing interests: the public and the private. The public interest is served by the creation of inventions, works of art, music, literature, and other types of intellectual expression. The private interest is served by rewarding creators of intellectual property by a time-limited monopoly that grants exclusive use to the creator. 

There are three main types of intellectual property protection: copyright, patent, and trademark law. Copyright law protects original forms of expression such as books, periodicals, and other forms of written expression, art, drawings, photographs, music, movies, performances, and computer programs. Patents grant the owner a 20-year exclusive monopoly on the ideas behind an invention. There are four types of inventions for which patents are granted under patent law: machines, manmade products, compositions of matter, and processing methods. Trademark law is used to protect trademarks—marks used to identify and distinguish goods and indicate their source. 

Describe and evaluate the different methods that are being used to protect online privacy. Which of these methods do you think is or could be the most effective?

Answer:  The different methods being used to protect online privacy include legal protections, industry self-regulation, privacy advocacy groups, and technology solutions. 

In the United States, the Federal Trade Commission has taken the lead in researching online privacy and recommending legislation to Congress. The FTC has issued the Fair Information Practice (FIP) Principles, which forms the basis for its recommendations for online privacy. Two core principles are Notice/Awareness and Choice/Consent. The Notice/Awareness principle recommends that sites disclose their information practices before collecting data. The Choice/Consent principle recommends that there be a choice system in place that allows consumers to choose how their information will be used for secondary purposes other than supporting transactions. Although the FIP principles are guidelines, not laws, they have stimulated private firms to develop their own guidelines and are being used as the basis of new legislation, such as the Children's Online Privacy Protection Act (COPPA), which requires Web sites to obtain parental permission before collecting information on children under 13 years of age. Recently, the FTC has developed a new framework to address consumer privacy. The main principles are privacy by design, simplified choice and greater transparency, applied to all commercial entities that collect or use consumer data, not just those that collect PII. It has also called for a "Do Not Track" mechanism for online behavioral advertising. As with FIP, these principles remain guidelines. Although several bills have been introduced in Congress to implement them, none have been passed as of yet.

The online industry, of course, opposes any legislation. It argues that self-regulation can address the growing consumer concern about misuse of personal information. The online industry formed the Online Privacy Alliance (OPA) to encourage self-regulation. In addition, the Network Advertising Initiative, a consortium of major Internet advertising companies, was formed to develop policies for the industry. The NAI policies are designed to offer consumers opt-out programs and to provide consumers with redress for abuses. Other forms of self-regulation include various "seals" of approval that sites can display when in compliance with certain privacy policies. However, these seal programs have had a limited impact on Web privacy practices and critics argue that the programs are not particularly effective in safeguarding privacy.

In general, industry efforts at self-regulation in online privacy have not succeeded in reducing American fears of privacy invasion during online transactions or in reducing the level of privacy invasion. In addition, consumer privacy groups have formed to monitor developments, and there are some technological solutions that help, although primarily in the arena of security. Technological tools include spyware blockers, pop-up blockers, methods to secure email; anonymous remailers, anonymous surfing, cookie managers, and P3P.