Consumers in the marketspace – the ethical aspects of electronic commerce

AUTHOR

Janusz Wielki, Ph.D.,
Technical University of Opole,
Faculty of Management and Production Engineering,
Poland

ABSTRACT

Rapid development of information technology, and particularly the emergence the Internet, has caused many significant shifts in the marketplace and has strongly influenced consumers worldwide. As argued by Rayport and Sviokla, traditional marketplace understood as a place where physical interaction between buyer and seller takes place, has been evaluating into the marketspace. It leads to numerous important consequences. Namely transactions, which take place in the marketspace differ from those occurring in the marketplace in all aspects:

  • another is content of transaction (information exchange replaces physical exchange of goods),
  • different is transaction context (physical meeting of buyer and seller has been replaced by action on a computer screen),
  • different is infrastructure, which makes transaction possible (computers and telecommunication lines replace shops or markets)

Additionally, while in the traditional marketplace three above mentioned elements (content, context, infrastructure) are usually aggregated, in the marketspace they can be easily disaggregated and manipulated independently.

Described above new situation influences consumers in two ways. On one hand, the development of the global marketspace gives them a lot of new opportunities and strengthens their position. The most obvious benefits comprise increased convenience of purchasing process, a wider choice of products, more detailed and complete information about them, possibility of buying customized goods and services, opportunity of comparison shopping, possibility of instant receiving on-line intangible goods (music, electronic books, software, stocks, airline tickets etc.), access to offers of merchants regardless their physical location, possibility of easy exchanging information and opinions about products with other consumers worldwide in numerous specialist discussion groups or lists and lower in some cases prices.

But there are other aspects of on-line transactions and generally electronic commerce. Despite the fact that history of the commercial utilization of the Internet is quite short (1) and that retail e-commerce sales are even in the leading countries as the U.S. still very low (2), experience acquired during these past few years leads to the conclusion that the marketspace means not only more convenience and new opportunities. There are also dangers not experienced by consumers before, new challenges as well as ethical dilemmas unknown on traditional marketplaces and all these issues are widely discussed in the paper.

First, attention is focused on dangers connected with on-line transactions. The different context of a transaction in the cyberspace (replacing the physical meeting of buyer and seller by action on a computer screen), fact that they are very often located thousands miles away from each other and situation that in many cases buyers purchase goods from firms existing only on-line (Web-only companies), results in such things as undelivered goods ordered from a Web site or on-line auctions of bogus items. Under circumstances like that trust and credibility become the key elements of on-line transactions. This aspect of e-commerce is in detail analyzed in the first part of the paper.

Next part of this article is focused on privacy issues. Experience of the first few years of electronic commerce development, proofs that this aspect of transactions conducted in the marketspace seems to be extremely important and has already evoked a lot of dilemmas as well as provoked numerous discussions. Since companies operating on-line know much more about their customers, comparing to those ones operating in the real world (name, address, preferences, history of purchased goods, credit card number etc.), such a situation provokes various dangers. It is especially important in case when a company exists only in a virtual reality and has no other assets. In situation when such a firm has financial problems their only capital, which can be sold, is database with mentioned about information. Cases of companies as More.com (3) proofed that with development of electronic commerce this issue can constitute a serious problem and solutions used so far (voluntary created by firms privacy policies) seems to be ineffective.

The following part of the paper concentrates on ethical aspects of electronic marketing. Since new environment requires from marketers revising so far used paradigms and developing new approach to relationship between marketer and consumer, they try to utilize new tools and new methods, but not always in a way which is commonly acceptable. An example can be the problem of cookies or spamming. These aspects are widely discussed in this part of the paper.

Next part of the article concentrates on methods of solving mentioned above issues. It discusses such solutions as electronic signature acts, antispam legislation, privacy policies, establishing netcoalitions in order to protect consumers’ privacy on-line, functioning of institutions as Internet Fraud Complaint Center or possibilities of utilization by consumers discussion groups or lists against dishonest companies. In the final part of the paper, conclusions and suggestions are provided.

  1. For example, the most famous Internet company, Amazon.com, was established in July 1995, ITN which was the first company offering travel services over the Internet, has been functioning since May 1995, while Auto-by-Tel , the network of accredited dealers from U.S., started its business activity in March 1995.
  2. According to U.S. Census Bureau, in the second quarter of 2000 it accounted for only 0.68 percent of total retail sales.
  3. Company decided to sell its customer data, including information about products and prescriptions customers purchased, although it promised never to do it.

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