Page 186 - Business Principles and Management

Chapter 7 • Legal Aspects of Business

Focus On...

Internet Ethics–Internet Advertising

The Internet is a popular place to browse for general information and
to buy products or services. But as the Internet grows in popularity,
buyers have become concerned about the privacy of their personal
information and its possible misuse. Are buyers’ fears justified?
DoubleClick, or DC, is a provider of advertising services to retailers
who sell their wares to Internet shoppers. DC has more than 1,500 busi-
ness customers, including Ford. DC’s clients want to target their Internet
advertising to the people most likely to buy their products. DC can iden-
tify, for example, which potential customers might buy Ford cars online.
The main way to identify these buyers is through “cookies”—files
stored on customers’ computers. The cookies collect information on
what customers buy and where they go on the Web, revealing their
preferences and buying habits.
DC manages its clients’ advertising. From the customer informa-
tion it collects online, it selects the customers that best match a
firm’s target audience. DC uses this information to help its clients
advertise effectively.
DC requires its business customers to collect information from cus-
tomers when they make sales. DC itself claims not to collect personally
identifiable information about people, such as names, addresses, and
telephone numbers. It does collect non–personally identifiable infor-
mation, such as whether people have responded to an advertisement
and the type of computer system they use. The nonpersonal informa-
tion is used to measure advertisement effectiveness for DC’s business
clients. Internet customers have a choice of whether to forbid, restrict,
or deny the use of information stored in cookies. Clear notice must
be given customers so that they can make that decision.
DoubleClick merged with Abacus Direct, a company with data on
the catalog-buying habits of more than 80 million families, including
names, addresses, and telephone numbers. This information permits
DC’s business clients to target these people with e-mail advertising.
Some consumer groups have objected strongly, claiming that this is an
invasion of privacy that should be stopped. The Federal Trade Commis-
sion initiated an investigation in 2000 but dropped the suit in 2001.
Privacy questions are still an issue for online advertising.

Think Critically

1. Identify three people who have purchased an item on the
Internet. Ask these people if they read the privacy policy
before purchasing and if they know what a “cookie” is.
Report your findings to the class.
2. Do the selling methods of Internet advertisers invade your
privacy any more than do companies who mail you adver-
tising or call you at home to try to sell you their products?
Defend your answer.
3. A very young person is often not concerned about what infor-
mation he or she provides to others on the Internet. How
could an unethical business capture and use this information
in a way that could harm the family?

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