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Case Study – Ellasaurus Products Enterprises
Ellen Carson is the author and illustrator of a successful series of children’s books that chronicle the adventures of Ellasaurus, a four-year-old orange dinosaur. Ellen has done well with the books, but decided she could earn considerably more money by creating a merchandising business around the Ellasaurus character. Thus, she recently created Ellasaurus Products Enterprises (EPE), a company that develops and markets Ellasaurus toys, stuffed animals, coloring books, pajamas, and Halloween costumes from its location in Flint, Michigan.
EPE has been able to get some major retailers to stock the Ellasaurus product line, but others have been willing to take on a new and unproven product line. Ellen has decided to sell the Ellasaurus merchandise online directly to customers. She also sees an online presence as a great way to build and maintain customer loyalty. Ellen envisions a Web site with a number of virtual community features in addition to the product store. For example, she would like to offer online games, discussion areas, interactive stories, and other activities that would promote EPE products and her books.
The Ellasaurus book series is targeted to children who are between four and six years old. Ellen expects the EPE product line to appeal to a similar demographic. Ellen has visited sites such as Hello Kitty and Nick Jr., which appeal to similar age groups, to get ideas for the site. She would like the site to be appealing to her main audience, but she would like to obtain registration information from site visitors so EPE can send marketing e-mails and facilitate social networking activities among her customer base. Ellen plans to sell merchandise to U.S. residents only at first, but she would like to sell internationally within a few years. The site will allow visitors from any country to register and participate in the virtual community features. Ellen will use some copyrighted illustrations from her books on the Web site. She will also include themes from the story lines of her books in some of the games that will be available (free) on the site to registered visitors.
Ellen has hired you as a consultant to build on her ideas and formulate the best ways to comply with potential intellectual property issues, privacy, and ethics laws. Your assignment this week is to create a report that discusses at least two intellectual property issues that might arise in the operation of the website, and describe the laws, ethics, and privacy issues that Ellen faces because of the ages of her intended audience members. Be sure to deal specifically with advertising issues as well as issues that might arise in managing the virtual community elements on the Web site. Additionally, outline the laws with which the site must comply when it registers site visitors under the age of 13, and include your recommendations regarding how Ellen can best comply with those laws.
The following requirements must be met:
·  Write between 1,000 – 1,500 words using Microsoft Word in APA style.
·  Use an appropriate number of references to support your position, and defend your arguments. The following are examples of primary and secondary sources that may be used, and non-credible and opinion based sources that may not be used.
o  Primary sources such as government websites (United States Department of Labor – Bureau of Labor Statistics, United States Census Bureau, The World Bank), peer reviewed and scholarly journals in EBSCOhost (Grantham University Online Library) and Google Scholar.
o  Secondary and credible sources such as CNN Money, The Wall Street Journal, trade journals, and publications in EBSCOhost (Grantham University Online Library).
o  Non-credible and opinion based sources such as, Wikis, Yahoo Answers, eHow, blogs, etc. should not be used.
·  Cite all reference material (data, dates, graphs, quotes, paraphrased statements, information, etc.) in the paper and list each source on a reference page using APA style. APA resources, including a template, are provided in the Supplemental Materials folder.

Charpter 7 summary

Required Text
Schneider, G. P. (2015). Electronic Commerce (11th ed.).
Stamford, CT: Cengage Learning.
Boston, MA. ISBN: 9781285742298
BUS615 Ecommerce

Ethics and laws are mainly a function of culture (Schneider, 2015) and as such, a balance between the culture and the power, which is essentially a form of control, is necessary to establish an environment that is legal and ethical in the Ecommerce world.

“Physical geographical boundaries lead to legal boundaries” (Schneider, 2015, Figure 7-2) and define the relationship between Power, Effects, Legitimacy and Notice.

Establishing jurisdiction on the Internet is more difficult then in the actual world as there are no physical or geographical boundaries on the Internet.

Contracts between buyers and sellers are an essential part of the commerce and Ecommerce is no exception.

Ecommerce Web Sites provides invitations for offers of merchandise. Adding items to an online shopping cart is an indication of acceptance of the price and is the beginning of entering into a legal contract to purchase.

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Managing Electronic Commerce Implementations

When the purchases are finalized and paid for with a credit card or online secure payment system, the consumer has entered into a contract to make payment and accept the terms of the sale as indicated on the web site.

Figure 7-4 of Schneider, 2015 illustrates the contracting process online for Ecommerce.

Protecting copyrights and intellectual property on the Web is essential as access to the protected information on the web is pervasive. 

Web site copyrights are obtained from the government as filed by the appropriate paperwork to establish the official legal protection for a given individuals work, web site content included.

Many webs sites proved copy write information at the bottom of the main page. The copy write information not only serves to protect the content on the web site it is also useful in citing the web site information in academic writing.

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Managing Electronic Commerce Implementations

A digital form of a watermark also protects intellectual property such as images and music.

The digital watermark “ . . . is a digital code or stream embedded undetectably in a digital image or music file” (Schneider, 2015). These digital watermarks are steams identify the legal owner the material.

Online crime includes many of the same crimes that take place in the physical world such as “ . . . theft, stalking, distribution of pornography and gambling” (Schneider, 2015). 

Jurisdiction makes combating online crime difficult for many law enforcement organizations as the laws vary by region and culture around the world.

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Managing Electronic Commerce Implementations

Warfare and terrorism has increased online as the World Wide Web expands, the access to technology is increasingly less difficult to obtain and Internet access is now reaching to remote areas of the world.

“The US department of Home Land Security and international police agencies such as [INTERPOL] are devoting considerable resources to monitoring terrorists activities online” (Schneider, 2015). 

The Internet also has proven to be a formidable communications network for terrorist activities.

Conversely, the Internet has provided a means to support warfare for the US and its allies as evident from the use of information systems to conduct a cyber attack on Iraq during the first Iraq war, Desert Storm (Lewis, 2010).

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Managing Electronic Commerce Implementations

Ethical business practices are essential online as many online consumers communicate with each other through the Internet, social media and mobile devices.

As the propensity for online sales continues to grow, online merchants must adhere to an ethical code of conduct that provides for a secure enjoyable online experience.

The use of system generated emails based on user internet activity can be an ethical issue if the uses does not have the opportunity to either opt-in or opt-out of emails for products and services.

Figure 7-10 and figure 7-11 of Schneider, 2015, provide illustrations of the mechanization of opt-in and opt-out selectable options on a web site..

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Managing Electronic Commerce Implementations

Collecting and paying taxes on the web is possible through software that connects to the Internal Revenue Service (IRS). 

When companies establish a connection between “. . . a tax paying entity and the government . . . [a] nexus [is formed]” (Schneider, 2015). 

This nexus requires the payment of state sales tax. This tax is essentially a use tax based on a sales transaction (Schneider, 2015). 

Companies that conduct business on the web where a nexus is established between the state government and the business requires the payment of the use tax by the company and as such, this cost is passed on to the consumer.

Chapter 7
Managing Electronic Commerce Implementations