CHAPTER FIVE

ETHICAL AND LEGAL ISSUES

Multiple Choice

1. Which of the following is not true in relation to law?

a. law is directed toward the behavior of individuals or small groups, as opposed to
entire populations
b. law attempts to be consistent in time and place
c. making law is often slow and complex
d. law is an expression of values
(a; Moderate; LO1; Analytic Skills)

2. The central focus of ________ is the analysis and description of what is right and wrong
and how we judge the difference.
a. law
b. ethics
c. self-regulation
d. privacy
(b; Easy; LO1; Ethical Understanding and Reasoning Abilities)

3. Which of the following is an ethical issue currently confronting those who work in
electronic environments?
a. intellectual property
b. the role of privacy
c. freedom of expression
d. all of the above
(d; Easy; LO5; Ethical Understanding and Reasoning Abilities)

4. Favor for the model of self-regulation is supported by all of the following points except
________.
a. the private sector’s speed in resolving problems within its area of expertise
b. the often contradictory and confusing nature of law
c. the motivation to voluntary compliance is compelled by greater consumer confidence
d. the insufficiently compelling incentives
(d; Moderate; LO2)

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5. The concept of privacy encompasses ________.
a. ethical aspects
b. legal aspects
c. both of the above
d. neither of the above
(c; Easy; LO3)

6. The general attributes of privacy fall into each of the following categories except the
________.
a. seclusion theory
b. autonomy model
c. access-control viewpoint
d. vacuum model
(d; Difficult; LO3; Analytic Skills)

7. What purpose(s) do digital cookies serve?

a. recalling stored sales information
b. collecting user data, such as name, addresses and phone numbers
c. creating/updating features such as virtual shopping baskets
d. all of the above
(d; Easy; LO3; Use of Information Technology)

8. Critics of opt out presumptions argue which of the following points?

a. average consumers are often confused by many opt out routines
b. consumers prefer targeted advertising
c. the ability of consumers to opt-out cuts down on the effectiveness of marketing
efforts
d. opt out policies keep marketers from learning anything about consumers
(a; Moderate; LO3; Use of Information Technology)

9. Which of the following companies have been subject to criticism regarding their possible
misuse of users’ private information?
a. DoubleClick
b. America Online
c. Facebook
d. All of the above
(d; Difficult; LO3; Use of Information Technology)

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10. Which of the following is a ubiquitous application, meaning it is able to function without a
user’s knowledge or control?
a. Java applet
b. Windows
c. E-mail
d. XML
(a; Moderate; LO3; Use of Information Technology)

11. Which of the following issues can be addressed by current conventional criminal statutes?
a. workers are extended an expectation of privacy from their employers
b. privacy of all American citizens is assured by federal law
c. sanctions against the misuse of consumer data
d. right of users to opt-out of data submission
(c; Moderate; LO3)

12. Traditionally, the law has used _______ to define ownership and protect intellectual
property rights?
a. copyrights
b. patents
c. trademarks
d. all of the above
(d; Moderate; LO4)

13. Thus far, ________ have been established as the primary means of protecting most of
content on the Internet.
a. copyrights
b. patents
c. trademarks
d. licenses
(a; Difficult; LO4)

14. According to trademark law, a certain redundancy is permitted as long as there is enough
dissimilarity in which of the following factors?
a. type of business
b. product name
c. language in brand promotions
d. all of the above
(d; Easy; LO4)

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15. ________ allow a buyer to use a company’s product, but with restrictions on the ability to
duplicate or distribute it.
a. Copyrights
b. Patents
c. Trademarks
d. Licenses
(d; Moderate; LO4)

16. All of the following can be defined as trade secrets except ________.
a. formulas
b. facts
c. market data
d. algorithms
(b; Moderate; LO4)

17. Which of the following is not a widely held criticism of spam?

a. it places burdens on network resources
b. it reduces the costs of marketing to target consumers
c. it is an unwanted intrusion for receivers
d. it is often derived from mailing lists not intended to be used for mass solicitation
(b; Moderate; LO2; Analytic Skills)

18. What is a legal method of protecting children from exposure to inappropriate, obscene, or
indecent material online?
a. filtering models
b. censorship of the entire Internet
c. the Computer Decency Act of 1996
d. all of the above
(a; Difficult; LO5)

19. Jurisdiction ________.

a. is a legal term that describes the authority of a court over individuals, groups, or firms
b. has traditionally been based upon physical presence/location
c. is unlikely to be exercised within the geographic boundaries of other nations or states
d. all of the above
(d; Moderate; LO4)

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20. Which of the following is not a possible sanction for fraudulent conduct?
a. forfeiture of property
b. lifetime bans on Internet commerce
c. civil judgments
d. consumer education
(d; Difficult; LO2)

True/False

21. The study of ethics has been in existence for over 2,500 years.
a. True
b. False
(a; Moderate; LO1; Ethical Understanding and Reasoning Abilities)

22. If individuals copy, share, or distribute computer software without having purchased it
under a licensed, then they may be supporting software piracy.
a. True
b. False
(a; Moderate; LO4; Ethical Understanding and Reasoning Abilities)

23. There is currently no law regulating consumers’ right to opt-out of unwanted data
collection.
a. True
b. False
(a; Moderate; LO3; Ethical Understanding and Reasoning Abilities)

24. The issue of data collection is the only problem within the context of online privacy.
a. True
b. False
(b; Easy; LO3; Use of Information Technology)

25. Cyber squatting refers to practices whereby one party registers domain names belonging
to or resembling the trade names of others.
a. True
b. False
(a; Moderate; LO4; Use of Information Technology)

26. Only registered trademarks are protected under the rules outlined in the US Lanham Act.
a. True
b. False
(b; Difficult; LO4)
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27. Metatags can be used to protect against one’s own or cyber squat against another’s
intellectual property, product, or trade name.
a. True
b. False
(a; Moderate; LO4; Use of Information Technology)

28. Shrinkwrap, clickwrap, and break-the-seal represent methods of corporate attempts to

communicate software licensing obligations to consumers.
a. True
b. False
(a; Difficult; LO4; Communication Abilities)

29. The mass distribution of unsolicited electronic mail is often referred to as spam.
a. True
b. False
(a; Easy; LO3; Use of Information Technology)

30. The use of email or Web sites to impersonate individuals or corporations is known as
spidering.
a. True
b. False
(b; Moderate; LO3; Use of Information Technology)

31. According to the text, privacy issues have been a subject of close international attention.
a. True
b. False
(a; Easy; LO3; Ethical Understanding and Reasoning Abilities)

32. The Federal Economic Espionage Act of 1996 was enacted, in part, to prevent and
prosecute against foreign distribution of corporate trade secrets.
a. True
b. False
(b; Difficult; LO4)

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Essay Questions

33. What is the distinction between law and ethics?

 Ethics- values and practices of professional and others who have expert knowledge
in a specific field
 Also general endeavor that reflects concerns and value of society as a whole
 Ethics are directed towards individuals or groups
 Laws – values of society that are directed to all members of society
 Laws are made by governing bodies to cover the whole affected population
 Laws are the result of social and political compromise
 Are the combination of interests, beliefs and goals
(Moderate; LO1; Ethical Understanding and Reasoning Abilities)

34. What are the arguments for and against self-regulation? Which position holds more
validity in your opinion?
 Pro: Private sector ability to identify and resolve problems more quickly than laws
 Pro: Technological environments are controlled by the marketplace
 Con: Incentives for self-regulation are not strong enough to prevent fraud and
deception
 Con: Self interest and external pressure compromise the private sector and the
marketplaces ability to police itself.
(Moderate; LO2; Ethical Understanding and Reasoning Abilities)

35. The issue of privacy can be broken down into three general areas. Identify and define
these areas.
 Seclusion Theory – right to be left alone or isolated
 Access Control Theory– laws that allow the individual to protect personal material
from unauthorized release
 Autonomy Theory – freedom for coercive use of personal information and the
ability to be alone when an individual wants to remain isolated
(Difficult; LO3; Ethical Understanding and Reasoning Abilities)

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36. What are the arguments for and against the mass distribution of unsolicited email?
Support one of these viewpoints using evidence from your own use of email.
 Pro – In the US the First Amendment to the Constitution, Freedom of Expression
 Restrict the ability to do targeted e-mails.
 Con – Addresses collected from newsgroup or web bulletin boards. Information
given for one use or purpose is used as a means to contact the consumer
 Messages sent without return addresses, sender unknown
(Easy; LO5; Analytic Skills)

37. What are some ways for consumers to protect themselves from fraud? Your answer
should include a definition of fraud and a specific Web site useful in protecting
consumers.
 Fraud – use of deception and false claims to obtain money
 Protection includes consumer education
 References from professional organizations
 Use of intermediaries
 Using organizations that belong to anti-fraud groups such as the Better Business
Bureau www.bbb.org, or posting reviews online (e.g., yelp.com, citysearch.com)
 Using businesses that require licensees to follow strict legal and ethical protocols.
(Difficult; LO5; Reflective Thinking Skills)

38. What are the norms used by the FTC that represent the minimum requirements essential
to the ethical use of consumer information?
 Notice- User should be aware of site’s information policy before data are collected
 Consent – Users should be allowed to choose to participate or not
 Access – Users should have access their data and correct errors.
 Security – Policies to ensure the integrity of data and prevention of misuse should
be in place
 Enforcement – User have means to hold data collectors to their policies
(Moderate; LO3; Ethical Understanding and Reasoning Abilities)

39. What are some examples of trade secrets that could be distributed illegally according to
the US Economic Espionage Act of 1996?
 Algorithms
 Models
 Market data
 Formulas
 Program codes
(Easy; LO4)

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