Ethics in a Cyber World

An ever-increasing number of business and individuals are using the Internet. Electronic commerce is becoming commonplace. As the world rushes forward to embrace the cyber world, there is an awakening about the ethics associated with many of the practices and methods used.

Businesses currently operate in a framework bounded by legal and regulatory laws plus a code of business ethics that establishes "how we conduct our business affairs, from the basest fraud to the highest levels of excellence" [Grace and Cohen, 1]. The environment has evolved over many years and has served business and the general community well.

But business is changing. Business practices are changing. Businesses are being encouraged to adopt electronic commerce, defined as "every type of business transaction in which the participants prepare or transact business or conduct their trade in goods or services electronically." [DCITA, 1999, 2] One of the biggest changes in moving to an electronic or cyber world is the lack of physical boundaries -- no owners and limited business rules govern this new medium.

So the question of ethics and electronic commerce is one related to the moral issues and rules of conduct arising from doing business, shopping and communicating through electronic means. It has its foundations in the intersection of business ethics and computer ethics and relates to how we conduct our affairs when using computers or electronic means.

So what are the issues? Just how do we establish and enforce the rules of conduct in this new environment? Can we expect ethical behaviour from the world at large? Are there any morals where the Internet and World Wide Web are concerned?

Rapid developments in technology over recent years have enabled faster information exchange, increased storage facilities, improved access to information and enhanced networking capabilities. The Internet, World Wide Web, Corporate Intranets and Extranets, CD ROMS, databases and tools for analyzing and tracking information are commonplace in the business world and amongst the community. Never before has there been so much information at our fingertips. Never before has so much information about us been stored in so many databases. Never before have our affairs been monitored and tracked so much.

While the uptake of these new technologies has far outpaced the adoption of previous innovations, such as the television or facsimile machines, there has been little attention in the mainstream press to ethical considerations associated with the new power that these technologies deliver. This revolution is effectively ignoring geographical boundaries and therefore challenging many of the jurisdictional aspects which have sought to protect businesses and citizens.

While there are no universally accepted answers to the ethical dilemmas, it is important that they be debated and discussed by the broader community.


The Internet has become a global phenomenon. But just how global is it? While newspapers, media and journals from around the globe cite impressive statistics about how many businesses and citizens are using the Internet, when considered across a worldwide population, they reflect that approximately 2.5% of the worldís population use it. [Figures from Computer Industry Almanac Inc] The majority of users are in Western countries except China, Japan and Taiwan, and just over half of the total number of users are in the USA. Should we still call it global? Social commentators speak of new classes being developed ñ the information-rich versus the information-poor. Can our society support these new classes?

As with the printed world, there is no limit to the type of information produced and published in the online world. Sexually explicit and graphically violent material is often only a click away from business procedures, government policies, entertainment and school sites. But is this information appropriate for all audiences? Censorship is a real issue in an online world. Issues of language and culture are also important when we are publishing information for a world audience. Often sites built in one country can meet all local ethical considerations but be offensive to an audience in another country.


As the number of Internet users worldwide increases exponentially, the databases of the corporate world are burgeoning. Information is captured and stored about individuals, their spending habits and preferences with each click made. Automatic teller machines, websites and other electronic devices can automatically capture details while people attend to their financial transactions, purchasing from their favorite website or conduct business electronically. Powerful data mining tools enable this information to be analyzed and tracked often without the individualís consent or knowledge.

Various countries are addressing this issue at present with legislative solutions - but how effective will these be? Do web developers or businesses that are creating websites have to become international law experts in order to ensure that their site meets the requirements of every country? What risks do online shoppers and online businesses take when dealing with global businesses? Should companies be forced to reveal their data collection habits and indicate the use of the information that they collect? Should individuals be given the choice of whether their details are captured and stored?


The Internet is full of information and sites appealing to specific interests. But just how much is accurate? How much can we rely on? How do we know who is behind the operation?

While we are familiar with popular brand names and trust the local companies that we know, many sites are developed by companies that we do not know offering brands and products that we have never heard of. Are these companies genuine? Will you receive the services or goods you pay for? What happens if you need to exchange them?

There are no guarantees on the Internet and no rules governing how these issues should be addressed. The accounting profession is taking a lead in this area with the development of the WebTrust service but how widely will this be accepted?


Widely publicized as a result of "hacker" stories, the issue of security of information on the Internet or World Wide Web is of paramount importance. Businesses need to secure their data and need to establish trust in electronic transactions. Individuals need to know that information sent electronically is secure and safe, particularly where there is financial risk.

The risk of fraud in e-commerce is real for businesses. In order to allay some of the fears associated with privacy and fraud and to help create a climate of trust, various technologies have been developed. Technologies aimed at validating, authenticating and securing transactions have already been developed and being adopted by businesses and governments.

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Browsers and search engines utilise technologies that enable them to prioritize database listings according to various criteria; companies utilise programs called cookies to track and monitor the practices and online movements of visitors. But are these legitimate marketing practices? What is the information used for? How is it stored? How much information is captured? Do the users know about that the information is being captured and what it will be used for? These are new practices only made possible by emerging technologies and so not previously considered by legislation or codes of conduct.

New technologies also enable users to cut, copy and paste information written and developed by others. While questions of intellectual property and copyright have existed for many years, the ease with which material made freely available in electronic formats can be obtained and used by individuals requires urgent attention.

As the online world moves into a mobile era with wireless technologies being adopted and tested by businesses, issues such as those mentioned above will become even more important. They need to be addressed now so that an ethical environment, that is an accepted part of todayís world, can apply to the online world as well. Ethics and electronic commerce can exist but must be recognised and understood by a wider audience including all business operators, web developers, web site owners and consumers.

FOOTNOTE: In 1999, the IT Chapter of the Institute of Chartered Accountants in Australia (ICAA), in conjunction with the Charles Sturt University, undertook the publication of "Ethics and Electronic Commerce: A Collection of Papers." The articles, contributed by a number of academics from institutions around the world, represented the latest in research on ethics and electronic commerce.

1. Grace, Damian and Cohen, Stephen, Business Ethics: Australian Problems and Cases, second edition, Oxford University Press: Oxford, 1998.

2." Department of Communications, Information Technology and the Arts, "Australiaís e-commerce report card", Canberra, 1999.


Ethical Considerations and Electronic Commerce
by Judith Merryweather, Consultant to the IT Chapter of the Institute of Chartered Accountants in Australia
May 2000 

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