Thao Le

ITS 380

Professor Shin-Ping Tucker

10/31/2019

 

Chapter 8: Ethical, Social, and Political Issues in E-commerce

Case Study

1.      How does the first era of antitrust thinking (1890-1950s) differ from the second era?

The first era of antitrust thinking was began with the Sherman Antitrust Act of 1980 through 1950s. According to this Law, Congress passed many pieces of legislation to restrain and break up the big companies if needed. The purpose of this legislation is to create fair competition in the market. It ensures that small company and entrepreneurs could enter markets. Furthermore, this Act protects consumers and other smaller firms from unreasonably high prices. Legislators believed that the restriction of trade would create lower product quality or reduce production and supply. However, the antitrust thinking changed since 1960s because of change in the economics thinking. In this period, concentration of economic power was not seen as anti-competitive but it is considered to greater efficiency and lower price for customers and no restraint of trade or preventing others companies from entering a market.

 

2.      What is a "natural monopoly" and how has the United States dealt with natural monopolies?

            Natural monopoly is defined as a single company supplies the entire market with a particular good or a service without any competition because of large barriers to entry. Natural monopolies create barriers to enter a market simply by virtue of the investment size required for new entrants as well as other nearly insurmountable advantaged in efficiency, brand and patents. For example, there are some natural monopolies are electrical and gas utilities, telephone and cable systems. The legislatures have turned to regulation to control pricing and service level in the public interest and structural changes. For instance, in the 20th century, the federal government nationalized the entire telephone and telecommunication industry with creating a single national system operated by only one firm, AT&T. Furthermore, states enacted a regulation of the industry including prohibiting new firms from competing and introducing new standards and competing telephone line to avoid duplication or higher prices.

 

3.       What are three possible solutions to the market dominance and anti-competitive behavior of Facebook, Google, and Amazon?

The first solution is to increase the review of proposed mergers with a view to protecting innovative small firm s from purchase if they result simply in the dominant firm gaining larger audiences and capturing more of the consumers’ time, denying this mindshare to competitors.

The second solution is to split existing monopolies into stand-alone independent companies.  For instance, Amazon could be split into ten stand-alone companies such as a retail company, a web services company or a media company.

The third solution is to follow the European example of dealing with big tech mega-firms. The EU is pursuing a regulatory model for Big Tech firms in a number of areas such as antitrust, privacy and taxation.

 

4.      How does the European model of antitrust differ from the American model?

      The European model rejects the contemporary American notion that price and efficiency are the only criteria for assessing monopolistic behavior, and instead focuses on the impact on market entry of innovative companies. The European model is a broader view of antitrust, similar to the previous period of US antitrust laws, considering the structure of markets and competition, not only consumer prices.

Projects

1.      Go to Google and find the Advanced Search link. Examine its SafeSearch filtering options. Surf the Web in search of content that could be considered objectionable for children using each of the options. What are the pros and cons of such restrictions? Are there terms that could be considered inappropriate to the filtering software but be approved by parents? Prepare a brief presentation to report on your experiences and to explain the positive and negative aspects of such filtering software.

According to Google, Safe Search can help users block inappropriate or explicit images from their Google Search results. The Safe Search filter isn’t 100% accurate, but it helps them avoid most violent and adult content. The options for the Safe Search including “Show most relevant results” and “Filter explicit results”. These restriction help parent to control what their children can search on the internet. Sites that are considered objectionable would be relating to photos or text of adult sexual behavior, drug, tobacco, alcohol or cruelty to animals. The advantage of this feature is that it prevents children from being approach to harmful material that parents don’t allow. The disadvantage of this filtering that in some situation, it can delete content that has educational value. For example, a teenager want to do a research paper on some topics related to these contents, they will not allow to view that sites because of the restriction. There are definitely term that could be considered inappropriate to the filtering software but be approved by parents.

2.      Develop a list of privacy protection features that should be present if a Web site is serious about protecting privacy. Then, visit well-known Web sites and examine their privacy policies. Write a report that rates each of the Web sites on the criteria you have developed.

A list of privacy protection features that should be present including:

-         The username cannot be repeated and a password should be created with requirement such as 8-10 characters length, not similar to username. If in case the user does not remember the password, they need a security question for verification.

-         Clear announcement of collecting data must be given before it begins for personally identification information

-         Sites make sure that the personally information that they collected need to be protected.

-         Collection of sensitive data is not permitted including sensitive financial, medical, orientation information or SSN.

-         Selling data to third parties is not permitted.

-         Customers’ credit card data are only transferred through secured connection.

Here are some well-known websites that I visited and examine their privacy policies: 

1.      Facebook is the biggest social media site that collect a huge of information from its users. To keep the user’s data more secure and avoid the unauthorized user to access data, they are trying to help users protect their account by providing some features such as secure password, login alert.

2.      Google is a biggest search engine which is used by most of people in the world. They collect data based on the information users do, so they can make their services work better. When users sign up for a account, they keep the account information they provide, like name and password. Google guarantees that they do not share information with advertisers unless they get permission from users.

3.      Amazon is one of the largest e-commerce platform so they store an immense amount of information about its customers including e-mail address, password, name, phone number. Amazon also collects technical information about users’ browsing habits and devices. Amazon guarantees that whomever it shares customer information with is either subject to its privacy notice or follow practices at least as protective as amazon’s.