Solved Assignment E-Commerce Data Collection, Privacy, and Legal Risks

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Solved Assignment E-Commerce Data Collection, Privacy, and Legal Risks - Page 1 preview image

Solved Assignment E-Commerce Data Collection, Privacy, and Legal RisksIn the context of e-commerce ventures, IT security and the legal implicationssurrounding the collection of user data are critical aspects of managing privacy andliability risks. Based on the provided article, answer the following questions:1.Data Collection Practices: a. Identify and explain the different methodsthrough which e-commerce sites collect personal data. (Word count: 300-400) b. Discuss the potential liability risks associated with both actively andpassively collected data, especially concerning third-party advertisers andcookies. (Word count: 300-400)2.PrivacyPolicyDevelopment:a.Whatarethefourmainstepsanorganization must follow to assess the liability risk of a site’s informationcollection practices? (Word count: 250-300) b. Outline the key elements ofan effective privacy policy, highlighting the importance of each element.(Word count: 400-500)3.Legal and Public Policy Concerns: a. Compare and contrast the perspectivesof proponents and privacy advocates regarding online profiling and datacollection. (Word count: 300-400) b. Explain the role of the FTC inregulatingonlineprivacyandthechallengescompaniesfacewhendeveloping privacy policies. (Word count: 250-300)Total word count for the assignment: 1,750–2,100 words

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IntroductionIT Securityis one of the most complex legal issues facing e-commerce ventures today. Many siteshavelittle interest in actively profiling their users or discovering personal information about them. However,these sites will often collect significant amounts of personally identifiable data that may trigger liabilityrisks.Some of this data is actively supplied by users. For example,sites today collectnames, physical and emailaddresses, and credit card information through forms. Users may also voluntarily supply personalinformation in their threaded discussion messages, which are archived on the site. On the other hand,some of this data is passively collected. The host server records routine information about each visit.Some of the site's banner ads allow third-party advertisers to track users' browsing habits.Organizations today shouldassess the liability risk of a site's information collection practices.This taskcan be brokendown into four main steps. First,theymust determine what information is collected by thesite. Second,theymust evaluate the potential liability for those information collection practices. Third,theymust choose whether to develop a privacy policy to disclose those practices. And, fourth,theymustverifytheircompliance with statutes or regulations. Thispaperwill examine each of these four steps.Information CollectionMany e-commerce sites directly ask users for personal information through forms. However, in additionto such information, many sites also record data about their users' browsing habits. This data can bematched with personal and demographic information to create a profile of user preferences. Sites mightuse these profiles to target advertising or offer customized services. Or, sites might engage inweb lining,where different users are offered different prices based on their profiles. Users who have moremoney orwant a product more are charged more; alternately, reduced prices are denied to users who shop so well

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for bargains that vendors will make no profit by selling to them. Business Week has a great article onweblining.Attorneys must be cognizant that some e-commerce clients may not always be aware of the extent towhich their site collects data about its customers. At first glance,these sitesmight not appear to collectmuch information. But, if we look deeper, we can see that users are disclosing information in twoimportant ways: first, data automatically collected by the site's server software, and second, data collectedby third-party advertisers throughtheirsites.For many organizations, the server software will almost certainly collect a great deal of informationautomatically. Most server software will automatically record a web log of browsing habits: what pagesusers visit, the time and duration of those visits, advertisements viewed and clicked on during those visits,purchases made, query terms entered in search engines, and the referring website that directed the user tothe company's page. Furthermore, most software will automatically obtain information about each user'sIP address, computer name, browser type, email address (if provided by the user's browser or a "webbug"), network owner, and domain registration.In addition to this information,these sites doallow third-party advertisers to place cookies on users' harddrives. Ads onthesesitesare placed through DoubleDealer, a (fictional) advertising network similar toDoubleClick. DoubleDealer uses cookies to develop long-term profiles of users' browsing habits acrossmultiple visits and different sites. It has a profile for every user that has ever looked one of their ads.Every time a user sees a DoubleDealer ad—on anysite that carries their ads--her computer will send anote to DoubleDealer indicating what kind of website she's looking at. And DoubleDealer will store thatinformation in her file, so it knows to send her more ads related to skiing or new age music or whatevershe seems to like. In this sense, DoubleDealer tracks users throughits hosting siteand all the other siteson its advertising network. As counsel to the WGU site, it is important that we recognize DoubleDealer'spractices because they could create liability risks and must be disclosed intheirsite's privacy policy.

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