Legal, Ethical, and Regulatory Issues for B2c Vs. B2b

B2B and B2C:

Ethical, Legal, and Regulatory Issues

The World Wide Web has become more than a growing trend in today’s world. It is the electronic wave of the future for business, education, communication, and technology that is happening now. From 2000 to 2007, worldwide Internet usage grew 256% and at year-end 2007 Internet users numbered 1,319,872,109, or 20% of the world’s total population (Internet World Stats, 2008). These statistics represent a business market waiting to be explored that almost seems to guarantee growth, given the global expanse of the Internet and billion-plus users. Business on the Internet – or e-business -- has spawned different types of e-commerce operations, among them business-to-business (B2B) and business-to-consumer (B2C). Like traditional business, e-business is guided by ethical standards as well as subject to laws and regulations with which they are required to comply. This paper discusses and compares some of the ethical, legal, and regulatory issues that B2B and B2C operations face on the Internet.

B2B and B2C Defined

B2B enables or improves organizational relationships within companies and between two or more companies. B2B is based on using private networks and Electronic Data Interchange (EDI) and the Internet. Examples of B2B Internet use are product catalogues searches, ordering from suppliers, receiving invoices and remitting electronic payments. B2B includes collaborative design and engineering, and managing the logistics of supply and delivery (Cheshire Henbury, 2008).

B2C is Internet retailing – selling end products to consumers – involves electronic shopping and information searching. Among popular items purchased are airline tickets and other travel products and services, books, computers, videotapes, and music (Cheshire Henbury, 2008).

Ethical Issues

Ethics is a standard of moral behavior motivated by right and wrong, and good and bad. In business, ethics translates to a code of professional standards that relates to fairness and duty to the profession and the general public (Define: ethics, n.d.). Businesses operating on the Web have the same responsibility to their customers, stakeholders, business partners, and general public for adhering to the same ethical standards followed by traditional businesses (Schneider, 2004). Because the Internet is an international forum, B2Bs and B2Cs need to be cognizant of cultural influence on ethics in the various countries where their customers are located. Ethics affect reputation, image, and customer relationships and bears on such issues as privacy and protecting information and data used in the normal course of doing business.

Privacy

Privacy: B2B. B2B privacy issues relate to protecting information and privacy of business partners. Professional Web Services (PWS) is a B2B entity and guarantees a standard of professional behavior by publishing its policy for business ethics on its website (PWS, 2008). PWS is an Internet marketing specialist that manages websites for businesses and has access to sensitive information. Compromising responsibility for privacy could lead to breach of confidentiality and become a legal issue.

Privacy: B2C. B2C privacy issues relate to consumer data that is made available to online retailers during transactions. Different countries view the privacy of consumer data differently. In the United States, companies that compile consumer data during business transactions often sell or rent the information as there are no laws currently enacted to protect consumer data; however in Europe, where consumer data is considered private, laws are in place that protect the privacy consumer data (Schnieder, 2004). A B2C in the United States would be viewed as unethical if it were to sell or rent consumer data collected on European residents and would likely be subject to European law as well as negative customer reaction.

Legal and Regulatory Issues

The Internet’s worldwide dimension places e-business on an international level, exposing organizations to a more complicated set of laws and regulatory issues than are present in domestic business forums. No less complex are the electronic means of communicating and networking capability of the Internet, which can subject business to intense scrutiny and reaction by customers and stakeholders for breaching of ethical standards and violating local and international law