Ecommerce ethics attempt to describe fair and just behavior by online merchants. (Yellow ethics sign)

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A Tesla investor sued Elon Musk in early August, saying that they believed his claim on Twitter that he had funding solidified to turn the publicly traded company private was fraudulent. This story is still in development and certainly Musk has not (at least at this point) been found guilty of any wrongdoing. The investor, who is not suing related to ethics but purported crime, is hoping to recover financially (asking other short-sellers to join a class-action): Musk’s tweet is potential fraud that hurt their portfolios. However, it also represents an ethical issue since deceiving people would not be considered acceptable ethical behavior within common mainstream understanding.

With the rise of the Internet, business has become truly global. Since people across the planet want the marketplace to be as fair as possible, there is worldwide concern with the specific business area of ecommerce ethics. For instance, it is addressed by ethical design consultant Tina Farber in German magazine Smashing Magazine as a basis with which to conduct design work. Thousands of miles away, Professor Pathik Variya of India’s Dharmsinh Desai University listed ethical obligations of ecommerce firms. You certainly see significant overlap in the discussion of ethics for online business.

This article explores some of the core ethical issues related to ecommerce. First, though, it grounds discussion to talk directly about what ethics and business ethics are.

What exactly are ethics?

The definition for ethics from the Markkula Center for Applied Ethics is perhaps particularly interesting since it comes from a Silicon Valley based institution, Santa Clara University. The center’s definition is twofold. For one, it describes ethics as “well-founded standards of right and wrong that prescribe what humans ought to do, usually in terms of rights, obligations, benefits to society, fairness, or specific virtues.”

Secondly, the center adds that ethics refers to the study and development of ethical principles. To take on both of those meanings of ethics at your organization, you could espouse ethical principles in the way you operate, as well as commit to further improving your ethical framework and practices as you proceed.

Ethics can be followed and applied personally or organizationally, internally and externally. Business ethics may initially sound as if they are solely the concern of industry, but that is not the case, as indicated in the Stanford Encyclopedia of Philosophy (run by the school’s Metaphysics Research Lab) by business ethics specialist and Bentley University professor Jeffrey Moriarty. As Moriarty noted, business ethics are something with which we should all be concerned since everyone does business at least to the extent that we purchase items on a daily or near-daily basis. Moriarty also commented that many of us additionally spend hours daily and throughout our lives focused on producing within a business context. The actions of businesses help to determine the nature of our culture, both for good and for bad, he concluded.

Core ethical issue #1 – security

To get into specific concerns, security is one issue that is mentioned often in discussion of business ethics. After all, security is not just about meeting Payment Card Industry Data Security Standard (PCI DSS) compliance but meeting ethical expectations that define fair and forthright business interactions.

An analysis on HonorSociety.org focused its discussion of security ethics on an increasingly key issue: protecting your information systems from insider threats. That point of focus makes sense given the numbers. In healthcare, 58% of breaches are now caused by the insider, according to a 2018 Verizon study. Throughout industry, a 2015 analysis from Intel found that the insider was responsible for 43% of data breaches. Some statistics are even higher than these already high numbers. For example, HonorSociety.org cited statistics finding that human error accounted for 80% of data breaches. Regardless the specific figures, it is certainly true, as Chris Duckett said in ZDNet, that “[y]our biggest threat is inside your organisation [sic] and probably didn’t mean it.”

Since error is so prevalent, it should be addressed through robust and regular training – which is a best practice for infosecurity anyway. Routine risk assessments (both comprehensive ones and ones that target systems you are evaluating for adoption) are also critical for breach prevention.

Core ethical issue #2 – Accuracy in descriptions and marketing

Another key ethical notion is that ecommerce companies should be straightforward in their descriptions of products through all communications – advertising, product pages, the blog, social media, and any other settings. (This aspect of ethics was central to the Musk lawsuit described above.)

Delivering on the promise, that what a person gets in the end is what they thought they were getting from the start, runs contrary to the ethical issues of bait-and-switch sales and deceptive advertising. In ecommerce, in contrast to traditional brick-and-mortar retail, the customer is unable to directly see or touch a product prior to purchasing it. Online, they are able to see products within videos and photos; however, that image undoubtedly presents the items in as near-perfect conditions as possible. This aspect of the images being so close to perfection on an ecommerce site is interesting in that what the shopper sees is not the product that gets purchased. Instead, it is a picture of another copy of the product.

It is easy to make mistakes with product descriptions. However, ethics require care that what the customer is actually getting is aligned with how it is presented online.

Core ethical issue #3 – Surveillance capitalism

A core issue of design ethics will be uncomfortable for many but is worthy of consideration given the amount of data flowing through ecommerce platforms: surveillance capitalism. This issue, brought up by Falber, arises when you consider your reasons for gathering and analyzing your user data. Falber cited ethical designer Aral Balkan, who offered a disturbing analogy. Balkan noted that Facebook using data to improve its platform is similar to a cow getting a massage in order to make Kobe beef – because those massages are “not for the benefit of the cow but to make the cow a better product.” He concludes his point, “In this analogy, you are the cow.”

Falber expanded Balkan’s thought by noting that data collection and analysis is problematic when its real aim is financial gain. People could debate Facebook’s side in this matter, but the issue of surveillance capitalism is certainly discussed in ethical circles related to web design and development.

Core ethical issue #4 – Moral agency

The notion of corporate moral agency is used by some thinkers to describe business ethics. Through this framework, any individual engaged in business is a moral agent – just as the collective of people working for a certain firm make up corporate moral agency. There is disagreement over whether a company should itself be considered a moral agent as well (beyond thinking of morality in terms of the staff as a group).

While it may not be easy to think in terms of moral agency, it can help develop a deeper understanding for ethics as a systemic value and as something to improve both individually and collectively.

Ecommerce based on key standards

Clearly, following ethics is important in how business is conducted. While we expect ethical behavior from those with whom we do business, we do not always get it; to protect ourselves, we seek proof that organizations follow established standards. One of the most credible ways for any service provider to demonstrate how strong its systems are from a security and control perspective is the Statement on Standards for Attestation Engagements 16 (SSAE 16) from the American Institute of Certified Public Accountants (AICPA). See our SSAE-16 and PCI-compliant ecommerce solutions.