Page 280 - Foundations of Marketing

Digital Marketing and Social Networking | Chapter 9 247

Due to consumer concerns over privacy, the FTC is considering developing regulations
that would protect consumer privacy by limiting the amount of consumer information that
businesses can gather online. Other countries are pursuing similar actions. The European
Union passed a law requiring companies to get users’ consent before using cookies to
track their information. In the United States, one proposed solution for consumer Internet
privacy is a “do not track” bill, similar to the “do not call” bill for telephones, to allow
73
users to opt out of having their information tracked. While consumers may welcome such
added protections, Web advertisers, who use consumer information to target advertise-
ments to online consumers, see it as a threat. In response to impending legislation, many
Web advertisers are attempting self-regulation in order to stay ahead of the game. For
instance, the Interactive Advertising Board is encouraging its members to adopt a do-not-
track icon that users can click on to avoid having their online activity monitored. However,
it is debatable whether members will choose to participate or honor users’ do-not-track
74
requests.

Online Fraud

Online fraud includes any attempt to conduct dishonest activities online. Online fraud
includes, among other things, attempts to deceive consumers into releasing personal
information. It is becoming a major source of frustration with social networking sites.
Cybercriminals are discovering ways to use sites like Facebook and Twitter to carry out
fraudulent activities. For instance, it has become common for cybercriminals to create
profiles under a company’s name. These fraudulent profiles are often created to damage
the company’s reputation (this is particularly common with larger, more controversial
companies) or as a way to lure that company’s customers into releasing personal informa-
tion that the cybercriminal can then use for monetary gain. Mobile payments are another
concern. It is estimated that with the growing use of mobile transactions, fraud will make
75
up 1.5 percent of mobile transactions within the next few years. Perhaps the most dis-
turbing is the practice of using social networking sites to pose as charitable institutions
or victims of natural disasters. The best way for people to avoid getting scammed through
social media sites is to research charities before giving. After Hurricane Sandy, Apple and
the Red Cross joined together to offer consumers a safe system for donating using their
76
iTunes accounts.
Organizations and social networking sites alike are developing ways to combat fraudulent
activity on digital media sites. For instance, organizations known as brand-protection fi rms
monitor social networks for fraudulent accounts. Whenever these sites are found, the organi-
77
zations notify their clients about the fraud and help them to remove the fraudulent account.
However, the best protection for consumers is to be careful when divulging information online.
Privacy advocates advise that the best way to stay out of trouble is to avoid giving out personal
information, such as social security numbers or credit card information, unless the site is defi -
nitely legitimate.

Intellectual Property

The Internet has also created issues associated with intellectual property, the copyrighted or
trademarked ideas and creative materials developed to solve problems, carry out applications,
and educate and entertain others. Each year, intellectual property losses in the United States
total billions of dollars stemming from the illegal copying of computer programs, movies,
compact discs, and books. YouTube has often faced lawsuits on intellectual property infringe-
ment. With millions of users uploading content to YouTube, it can be hard for Google to
online fraud Any attempt to
monitor and remove all the videos that may contain copyrighted materials. Additionally, the conduct fraudulent activities
file hosting service Megaupload was shut down, and owner Kim Dotcom arrested after pros- online, including deceiving
ecutors accused the site of being a front for massive Internet piracy. Unfortunately, legitimate consumers into releasing
78
users of the site were cut off from their files as well. personal information

Copyright 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.