Page 659 - Introduction to Business

CHAPTER 18 The Digital Enterprise 633

Ethics in Business

Information Technology and Privacy

Privacy is the condition of being left FIP forms the basis of several federal statutes that
alone, free from surveillance or set forth the conditions for handling information
interference from other individuals or organizations, about individuals in such areas as credit reporting,
including the state. Information technology and education, financial records, newspaper records, and
systems threaten individual claims to privacy by electronic communication. The Privacy Act of 1974
making the invasion of privacy cheap, profitable, and has been the most important of these federal statutes,
effective. regulating the federal government’s collection, use,
The claim to privacy is protected in the U.S., and disclosure of information. At present, most U.S.
Canadian, and German constitutions in a variety of federal privacy laws apply only to the federal
different ways, and in other countries through government and regulate very few areas of the
various statutes. In the United States, the claim to private sector.
privacy is protected primarily by the First Efforts are under way to develop appropriate
Amendment guarantees of freedom of speech and legislation to protect the privacy of Internet users.
association, the Fourth Amendment protections The Federal Trade Commission (FTC) has made a
against unreasonable search and seizure of one’s series of recommendations to the U.S. Congress
personal documents or home, and the guarantee for online privacy protection, issuing its own set of
of due process. FIP principles in 1998. The FTC’s FIP restate and
Due process has become a key concept in defining extend the original FIP to provide guidelines
privacy rights. Due process requires that a set of rules more appropriate for privacy protection in the
or laws exist that clearly define how information age of the Internet. Core principles specify that
about individuals will be treated and what appeal websites must disclose their information
mechanisms are available. Perhaps the best practices before collecting data and that
statement of due process in record keeping is given consumers must be allowed to choose how
by the Fair Information Practices Doctrine developed information about them will be used for
in the early 1970s. secondary purposes—purposes other that those
Most U.S. and European privacy law is based on a supporting the immediate transaction.
regime called Fair Information Practices, first set forth In the United States, privacy law is enforced by
in a report written in 1973 by the U.S. federal individuals who must sue agencies or companies in
government (U.S. Department of Health, Education, court to recover damages. European countries and
and Welfare). The Fair Information Practices (FIP) are Canada define privacy in a similar manner to the
a set of principles governing the collection and use of United States, but they have chosen to enforce their
information about individuals. The five FIP principles privacy laws by creating privacy commissions or data
are protection agencies to pursue complaints brought by
There should be no personal record systems whose their citizens.
existence is secret. Source: From Kenneth C. Laudon and Jane P. Laudon, Essentials of
Individuals have rights of access to, inspection of, Management Information Systems: Managing the Digital Firm, 5th
Edition, © 2003. Adapted by permission of Pearson Education, Inc.,
review of, and amendment to systems that contain
Upper Saddle River, NJ.
information about them.
There must be no use of personal information for
purposes other than those for which it was Questions
gathered, without prior consent. 1. Explore the advantages and disadvantages of the
Managers of systems are responsible for and can way privacy law is enforced in the United States
be held accountable and liable for the damage and the way it is enforced in European countries
done by systems. and Canada.
Governments have the right to intervene in the 2. Analyze the five FIP principles. Which principles
information relationships among private parties. would you change or delete and why?
privacy The condition of individuals of
being left alone, free from surveillance fair information practices (FIP) A set of
or interference from other individuals or principles governing the collection and
organizations, including the state use of information about individuals

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