Ethical, Legal, and Regulatory Issues

Essay by shanbananaA, June 2007

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Like the traditional brick and mortar companies, business to business (B2B) and business to consumers (B2C) models face ethical, legal, and regulatory concerns. According to Schneider (2004), "businesses that operate on the Web must comply with the same laws and regulations that govern the operation of all businesses. If they do not, they face the same set of penalties - fines, reparation payments, court-imposed dissolution, and even jail time for office and owners - that any business faces" (p. 284). Whether the business caters to other businesses or consumers, there is usually a transaction or sale of a product or service. Since the Internet helps to thrust businesses into the worldwide market, businesses need to be mindful of the different legal, ethical, and regulatory issues in order to remain competitive and to avoid potential legal liability.

Ethical ConcernsEthics is an important issue when conducting business online as well as traditionally.

Ethics allows a business to establish a good rapport with customers and creates a relationship with the customer, which is based on trust. According to Gauzente and Ranchhod (2002), ". . . firms that wish to differentiate themselves from their competitors will have to turn to marketing ethics in order to gain and keep consumers" (p. 1). Organizations that use short-term strategies tend to use even shorter marketing and advertising strategies, hence pushing the organization towards conducting unethical practices. One such unethical practice on many websites is the gathering of consumer information. Consumers are concerned with conducting online transactions due to the privacy of information that is required to complete a transaction, such as purchasing products or services. According to Roman (2006), "issues such as privacy, unsolicited email, transaction security continue to be hotly debated in the academic and practitioner literature" (p. 131). Before a consumer makes a purchase or...