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Management Information Systems:

Managing the Digital Firm


Seventeenth Edition, Global Edition

Chapter 8
Securing Information Systems

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Learning Objectives
8.1 Why are information systems vulnerable to destruction,
error, and abuse?
8.2 What is the business value of security and control?
8.3 What are the components of an organizational
framework for security and control?
8.4 What are the most important tools and technologies for
safeguarding information resources?
8.5 How will MIS help my career?
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Video Cases
• Case 1: Stuxnet and Cyberwarfare
• Case 2: Cyberespionage: The Chinese Threat
• Instructional Video 1: Sony PlayStation Hacked; Data
Stolen from 77 Million Users
• Instructional Video 2: Meet the Hackers: Anonymous
Statement on Hacking Sony

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Cyberattacks in the Asia-Pacific (1 of 2)
• Problem
– Information technology is pervasive
– Social engineering attacks
• Solutions
– Educate customers about security practices
– Manage data breaches proactively

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Cyberattacks in the Asia-Pacific (1 of 2)
• Robust business processes need to be created and
monitored
• Demonstrates vulnerabilities in information technology
systems
• Illustrates some of the reasons organizations need to pay
special attention to information system security

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Why Systems are Vulnerable (1 of 2)
• Security
– Policies, procedures, and technical measures used to
prevent unauthorized access, alteration, theft, or
physical damage to information systems
• Controls
– Methods, policies, and organizational procedures that
ensure safety of organization’s assets; accuracy and
reliability of its accounting records; and operational
adherence to management standards
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Why Systems are Vulnerable (2 of 2)
• Accessibility of networks
• Hardware problems (breakdowns, configuration errors,
damage from improper use or crime)
• Software problems (programming errors, installation
errors, unauthorized changes)
• Disasters
• Use of networks/computers outside of firm’s control
• Loss and theft of portable devices
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Figure 8.1 Contemporary Security
Challenges and Vulnerabilities

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Internet Vulnerabilities
• Network open to anyone; size means abuses can have
wide impact
• Corporate networks linked to Internet more vulnerable
• E-mail, IM, and P2P increase vulnerability
– Email: attachments with malicious software; can be
used to transmit trade secrets, confidential data
– IM: back door into a secure network
– P2P: can transmit malicious software, expose
corporate data

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Wireless Security Challenges
• Bluetooth and Wi-Fi networks susceptible to hacking
– Radio frequency bands easy to scan
– SSIDs (service set identifiers)
▪ Identify access points, broadcast multiple times, can be
identified by sniffer programs
• War driving
– Eavesdroppers drive by buildings and try to detect SSID and gain
access to network and resources
– Once access point is breached, intruder can gain access to
networked drives and files
• Rogue access points

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Figure 8.2 Wi-Fi Security Challenges

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Malicious Software: Viruses, Worms,
Trojan Horses, and Spyware (1 of 2)
• Malware (malicious software)
• Viruses
• Worms
• Worms and viruses spread by
– Downloads and drive-by downloads
– E-mail, IM attachments
• Mobile device malware
• Social network malware
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Malicious Software: Viruses, Worms,
Trojan Horses, and Spyware (2 of 2)
• Trojan horse
• SQL injection attacks
• Ransomware
• Spyware
– Key loggers
– Other types
▪ Reset browser home page
▪ Redirect search requests
▪ Slow computer performance by taking up memory
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Hackers and Computer Crime (1 of 4)
• Hackers vs. crackers
• Activities include:
– System intrusion
– System damage
– Cybervandalism
▪ Intentional disruption, defacement, destruction of
website or corporate information system
• Spoofing and sniffing
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Hackers and Computer Crime (2 of 4)
• Denial-of-service attacks (DoS)
• Distributed denial-of-service attacks (DDoS)
• Botnets
• Spam

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Hackers and Computer Crime (3 of 4)
• Computer crime defined by U.S. Department of Justice as
any violations of criminal law that involve a knowledge of
computer technology for their perpetration, investigation, or
prosecution.
• Computer may be target of crime
• Computer may be instrument of crime

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Hackers and Computer Crime (4 of 4)
• Identity theft
– Phishing
– Evil twins
– Pharming
• Click fraud
• Cyberterrorism
• Cyberwarfare

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Internal Threats: Employees
• Security threats often originate inside an organization
• Inside knowledge
• Sloppy security procedures
– User lack of knowledge
• Social engineering
• Both end users and information systems specialists are
sources of risk

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Interactive Session: Technology: Capital
One: A Big Bank Heist from the Cloud
• Class discussion
– What management, organization, and technology factors were
responsible for the Capitol One hack?
– Was this an insider hack? Explain your answer.
– What steps could have been taken to prevent the Capital One
hack?
– Should companies handling sensitive data use cloud computing
services? Explain your answer.

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Software Vulnerability
• Commercial software contains flaws that create security
vulnerabilities
– Bugs (program code defects)
– Zero defects cannot be achieved
– Flaws can open networks to intruders
• Zero-day vulnerabilities
• Patches and patch management: repair software flaws
• Vulnerabilities in microprocessor design: Spectre,
Meltdown
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What is the Business Value of
Security and Control?
• Failed computer systems can lead to significant or total loss of
business function
• Firms now are more vulnerable than ever
– Confidential personal and financial data
– Trade secrets, new products, strategies
• A security breach may cut into a firm’s market value almost
immediately
• Inadequate security and controls also bring forth issues of
liability
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Legal and Regulatory Requirements
for Electronic Records Management
• HIPAA
– Medical security and privacy rules and procedures
• Gramm-Leach-Bliley Act
– Requires financial institutions to ensure the security and
confidentiality of customer data
• Sarbanes-Oxley Act
– Imposes responsibility on companies and their management
to safeguard the accuracy and integrity of financial
information that is used internally and released externally
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Electronic Evidence and Computer
Forensics
• Electronic evidence
– Evidence for white collar crimes often in digital form
– Proper control of data can save time and money when
responding to legal discovery request
• Computer forensics
– Scientific collection, examination, authentication,
preservation, and analysis of data from computer storage
media for use as evidence in court of law
– Recovery of ambient data
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Information Systems Controls
• May be automated or manual
• General controls
– Govern design, security, and use of computer programs and
security of data files in general throughout organization
– Software controls, hardware controls, computer operations
controls, data security controls, system development
controls, administrative controls,
• Application controls
– Controls unique to each computerized application
– Input controls, processing controls, output controls
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Risk Assessment
• Determines level of risk to firm if specific activity or process
is not properly controlled
– Types of threat
– Probability of occurrence during year
– Potential losses, value of threat
– Expected annual loss

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Table 8.5 Online Order Processing
Risk Assessment
Exposure Probability of Loss Range Expected Annual
Occurrence (Average) ($) Loss ($)
Power failure 30% $5,000 − $200,000 $30,750
($102,500)
Embezzlement 5% $1,000 − $50,000 $1,275
($25,500)
User error 98% $200 − $40,000 $19,698
($20,100)

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Security Policy
• Ranks information risks, identifies security goals and
mechanisms for achieving these goals
• Drives other policies
• Acceptable use policy (AUP)
– Defines acceptable uses of firm’s information resources
and computing equipment
• Identity management
– Identifying valid users
– Controlling access

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Figure 8.3 Access Rules for a Personnel
System

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Disaster Recovery Planning and
Business Continuity Planning
• Disaster recovery planning
– Devises plans for restoration of disrupted services
• Business continuity planning
– Focuses on restoring business operations after disaster
• Both types of plans needed to identify firm’s most critical
systems
– Business impact analysis to determine impact of an outage
– Management must determine which systems restored first
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The Role of Auditing
• Information systems audit
– Examines firm’s overall security environment as well as
controls governing individual information systems
• Security audits
– Review technologies, procedures, documentation,
training, and personnel
– May even simulate disaster to test responses
• List and rank control weaknesses and the probability of
occurrence
• Assess financial and organizational impact of each threat
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Figure 8.4 Sample Auditor’s List of
Control Weaknesses

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Tools and Technologies for Safeguarding
Information Systems (1 of 3)
• Identity management software
– Automates keeping track of all users and privileges
– Authenticates users, protecting identities, controlling access
• Authentication
– Password systems
– Tokens
– Smart cards
– Biometric authentication
– Two-factor authentication
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Tools and Technologies for
Safeguarding Information Systems
(2 of 3)
• Firewall
– Combination of hardware and software that prevents
unauthorized users from accessing private networks
– Packet filtering
– Stateful inspection
– Network address translation (NAT)
– Application proxy filtering
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Figure 8.5 A Corporate Firewall

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Tools and Technologies for
Safeguarding Information Systems
(3 of 3)
• Intrusion detection system
– Monitors hot spots on corporate networks to detect and
deter intruders
• Antimalware and antispyware software
– Checks computers for presence of malware and can often
eliminate it as well
– Requires continual updating
• Unified threat management (UTM) systems
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Securing Wireless Networks
• WEP security
– Static encryption keys are relatively easy to crack
– Improved if used in conjunction with VPN
• WPA2 specification
– Replaces WEP with stronger standards
– Continually changing, longer encryption keys
• WPA3 is most recent specification, with even stronger
encryption
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Encryption and Public Key
Infrastructure (1 of 3)
• Encryption
– Transforming text or data into cipher text that cannot be
read by unintended recipients
– Two methods for encryption on networks
▪ Secure Sockets Layer (SSL) and successor
Transport Layer Security (TLS)
▪ Secure Hypertext Transfer Protocol (S-HTTP)

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Encryption and Public Key
Infrastructure (2 of 3)
• Two methods of encryption of messages
– Symmetric key encryption
▪ Sender and receiver use single, shared key
– Public key encryption
▪ Uses two, mathematically related keys: public key
and private key
▪ Sender encrypts message with recipient’s public key
▪ Recipient decrypts with private key
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Figure 8.6 Public Key Encryption

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Encryption and Public Key
Infrastructure (3 of 3)
• Digital certificate
– Data file used to establish the identity of users and electronic assets for
protection of online transactions
– Uses a trusted third party, certification authority (CA), to validate a user's
identity
– CA verifies user’s identity, stores information in CA server, which
generates encrypted digital certificate containing owner ID information
and copy of owner’s public key
• Public key infrastructure (PKI)
– Use of public key cryptography working with certificate authority
– Widely used in e-commerce
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Securing Transactions with
Blockchain
• Secure transaction database
• Encryption used to verify users and transactions
• Decentralized
• Records cannot be changed
• Blockchain has some vulnerabilities requiring attention to
security and controls

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Figure 8.7 Digital Certificates

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Ensuring System Availability
• Online transaction processing requires 100% availability
• Fault-tolerant computer systems
– Contain redundant hardware, software, and power
supply components that create an environment that
provides continuous, uninterrupted service
• Security outsourcing
– Managed security service providers (MSSPs)

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Achieving Digital Resiliency
• Deals with how to maintain and increase resilience of
organization and its business processes
• Calls attention to managerial and organizational issues in
addition to IT infrastructure
• Single weak link can cause an outage if resiliency has not
been explicitly designed in, measured, and tested

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Interactive Session: Management:
PayPal Ups Its Digital Resiliency
• Class discussion
– Why is digital resiliency so important for a company
such as PayPal?
– How did PayPal benefit from measuring its digital
resiliency? What issues did it address?
– What is the role of management and organizational
issues in making an organization’s IT infrastructure
more resilient?
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Security Issues for Cloud Computing
and the Mobile Digital Platform (1 of 2)
• Security in the cloud
– Responsibility for security resides with company owning the
data
– Firms must ensure providers provide adequate protection:
▪ Where data are stored
▪ Meeting corporate requirements, legal privacy laws
▪ Segregation of data from other clients
▪ Audits and security certifications
– Service level agreements (SLAs)
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Security Issues for Cloud Computing
and the Mobile Digital Platform (2 of 2)
• Securing mobile platforms
– Security policies should include and cover any special requirements for
mobile devices
▪ Guidelines for use of platforms and applications
– Mobile device management tools
▪ Authorization
▪ Inventory records
▪ Control updates
▪ Lock down/erase lost devices
▪ Encryption
– Software for segregating corporate data on devices

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Ensuring Software Quality
• Software metrics: Objective assessments of system in form of
quantified measurements
– Number of transactions
– Online response time
– Payroll checks printed per hour
– Known bugs per hundred lines of code
• Early and regular testing
• Walkthrough: Review of specification or design document by
small group of qualified people
• Debugging: Process by which errors are eliminated
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How Will MIS Help My Career?
• The Company: No. 1 Value Supermarkets
• Position Description: Identity access and management
support specialist, entry-level
• Job Requirements
• Interview Questions
• Author Tips

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Copyright
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the needs of other instructors who rely on these materials.

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Management Information Systems:
Managing the Digital Firm
Seventeenth Edition, Global Edition

Chapter 4
Ethical and Social Issues in
Information Systems

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Learning Objectives
4.1 What ethical, social, and political issues are raised by
information systems?
4.2 What specific principles for conduct can be used to guide
ethical decisions?
4.3 Why do contemporary information systems technology and the
Internet pose challenges to the protection of individual privacy
and intellectual property?
4.4 How have information systems affected laws for establishing
accountability, liability, and the quality of everyday life?
4.5 How will MIS help my career?

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Video Cases
• Case 1: What Net Neutrality Means for You
• Case 2: Facebook and Google Privacy: What Privacy?
• Case 3: United States v. Terrorism: Data Mining for
Terrorists and Innocents
• Instructional Video: Viktor Mayer-Schönberger on the Right
to Be Forgotten

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Your Mobile Phone: Big Brother’s
Best Friend (1 of 2)
• Problem
– Opportunities from new technology
– Weak legal environment
• Solutions
– Develop location data strategy and privacy policies
– Collect, sell and analyze mobile phone location data
– Internet of Things
– Smartphones
– Location databases
– SDKs
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Your Mobile Phone: Big Brother’s
Best Friend (2 of 2)
• Mobile location tracking systems
• Demonstrates how technological innovations can be a
double-edged sword
• Illustrates how IT systems create consumer benefits and
costs

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What Ethical, Social, and Political
Issues are Raised by Information
Systems? (1 of 2)
• Recent cases of failed ethical judgment in business
– Volkswagen AG, Wells Fargo, General Motors, Takata Corporation
– In many, information systems used to bury decisions from public
scrutiny
• Ethics
– Principles of right and wrong that individuals, acting as free moral
agents, use to make choices to guide their behaviors

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What Ethical, Social, and Political
Issues are Raised by Information
Systems? (2 of 2)
• Information systems raise new ethical questions because
they create opportunities for:
– Intense social change, threatening existing distributions
of power, money, rights, and obligations
• New opportunities for crime
• New kinds of crimes
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A Model for Thinking About Ethical,
Social, and Political Issues
• Society as a calm pond
• IT as rock dropped in pond, creating ripples of new
situations not covered by old rules
• Social and political institutions cannot respond overnight to
these ripples—it may take years to develop etiquette,
expectations, laws
– Requires understanding of ethics to make choices in
legally gray areas
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Figure 4.1 The Relationship Between
Ethical, Social, and Political Issues in
an Information Society

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Five Moral Dimensions of the
Information Age
• Information rights and obligations
• Property rights and obligations
• Accountability and control
• System quality
• Quality of life

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Key Technology Trends That Raise
Ethical Issues
• Computing power doubles every 18 months
• Data storage costs rapidly decline
• Data analysis advances
• Networking advances
• Mobile device growth impact

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Advances in Data Analysis
Techniques
• Profiling
– Combining data from multiple sources to create
dossiers of detailed information on individuals
• Nonobvious relationship awareness (NORA)
– Combining data from multiple sources to find obscure
hidden connections that might help identify criminals or
terrorists

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Figure 4.2 Nonobvious Relationship
Awareness (NORA)

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Basic Concepts: Responsibility,
Accountability, and Liability
• Responsibility
– Accepting the potential costs, duties, and obligations for decisions
• Accountability
– Mechanisms for identifying responsible parties
• Liability
– Permits individuals (and firms) to recover damages done to them
• Due process
– Laws are well-known and understood, with an ability to appeal to
higher authorities
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Ethical Analysis
• Five-step process for ethical analysis
1. Identify and clearly describe the facts
2. Define the conflict or dilemma and identify the higher-
order values involved
3. Identify the stakeholders
4. Identify the options that you can reasonably take
5. Identify the potential consequences of your options

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Candidate Ethical Principles (1 of 2)
• Golden Rule
– Do unto others as you would have them do unto you
• Immanuel Kant’s Categorical Imperative
– If an action is not right for everyone to take, it is not
right for anyone
• Slippery Slope Rule
– If an action cannot be taken repeatedly, it is not right to
take at all

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Candidate Ethical Principles (2 of 2)
• Utilitarian Principle
– Take the action that achieves the higher or greater value
• Risk Aversion Principle
– Take the action that produces the least harm or potential
cost
• Ethical “No Free Lunch” Rule
– Assume that virtually all tangible and intangible objects are
owned by someone unless there is a specific declaration
otherwise

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Professional Codes of Conduct
• Promulgated by associations of professionals
– American Medical Association (AMA)
– American Bar Association (ABA)
– Association for Computing Machinery (ACM)
• Promises by professions to regulate themselves in the
general interest of society

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Real-World Ethical Dilemmas
• One set of interests pitted against another
• Examples
– Monitoring employees: Right of company to maximize
productivity of workers versus workers’ desire to use
Internet for short personal tasks
– Facebook provides useful services for users but
monitors user behavior and sells information to
advertisers and app developers

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Information Rights: Privacy and
Freedom in the Internet Age (1 of 3)
• Privacy
– Claim of individuals to be left alone, free from surveillance or
interference from other individuals, organizations, or state;
claim to be able to control information about yourself
• In the United States, privacy protected by:
– First Amendment (freedom of speech and association)
– Fourth Amendment (unreasonable search and seizure)
– Additional federal statues (e.g., Privacy Act of 1974)
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Information Rights: Privacy and
Freedom in the Internet Age (2 of 3)
• Fair information practices
– Set of principles governing the collection and use of
information
▪ Basis of most U.S. and European privacy laws
– Used to drive changes in privacy legislation
▪ COPPA
▪ Gramm-Leach-Bliley Act
▪ HIPA A
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Information Rights: Privacy and
Freedom in the Internet Age (3 of 3)
• FTC FIP principles
– Notice/awareness (core principle)
– Choice/consent (core principle)
– Access/participation
– Security
– Enforcement

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EU General Data Protection
Regulation (GDPR)
• Requires unambiguous explicit informed consent of customer
• EU member nations cannot transfer personal data to countries without
similar privacy protection
– Applies across all EU countries to any firms operating in EU or
processing data on EU citizens or residents
– Strengthens right to be forgotten
• Privacy Shield: All countries processing EU data must conform to GDP
R requirements
• Heavy fines: 4% of global daily revenue
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Internet Challenges to Privacy (1 of 2)
• Cookies
– Identify browser and track visits to site
• Web beacons (web bugs)
– Tiny graphics embedded in e-mails and web pages
– Monitor who is reading email message or visiting site
• Spyware
– Surreptitiously installed on user’s computer
– May transmit user’s keystrokes or display unwanted ads
• Google services and behavioral targeting

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Internet Challenges to Privacy (2 of 2)
• The United States allows businesses to gather transaction
information and use this for other marketing purposes.
• Opt-out vs. opt-in model
• Online industry promotes self-regulation over privacy
legislation.
– Complex/ambiguous privacy statements
– Opt-out models selected over opt-in
– Online “seals” of privacy principles

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Figure 4.3 How Cookies Identify Web Visitors

1. The Web server reads the user's Web browser and determines the operating system,
browser name, version number, Internet address, and other information.
2. The server transmits a tiny text file with user identification information called a cookie,
which the user's browser receives and stores on the user's computer.
3. When the user returns to the Web site, the server requests the contents of any cookie
it deposited previously in the user's computer.
4. The Web server reads the cookie, identifies the visitor, and calls up data on the user.
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Technical Solutions
• Solutions include:
– Email encryption
– Anonymity tools
– Anti-spyware tools
• Overall, technical solutions have failed to protect users
from being tracked from one site to another
– Browser features
▪ “Private” browsing
▪ “Do not track” options
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Property Rights: Intellectual Property
• Intellectual property
– Tangible and intangible products of the mind created by
individuals or corporations
• Protected in four main ways:
– Copyright
– Patents
– Trademarks
– Trade secrets

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Challenges to Intellectual Property
Rights
• Digital media different from physical media
– Ease of replication
– Ease of transmission (networks, Internet)
– Ease of alteration
– Compactness
– Difficulties in establishing uniqueness
• Digital Millennium Copyright Act (DMCA)
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Computer-Related Liability Problems
• If software fails, who is responsible?
• If seen as part of a machine that injures or harms, software
producer and operator may be liable
• If seen as similar to book, difficult to hold author/publisher
responsible
• If seen as a service, would this be similar to telephone
systems not being liable for transmitted messages?

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Interactive Session: Management:
The Boeing 737 MAX Crashes
• Class discussion
– What is the problem described in this case? Would you consider it
an ethical dilemma? Why or why not?
– Describe the role of management, organization, and technology
factors in the Boeing 737 MAX safety problems. Tow hat extent
was management responsible?
– Is the solution provided by Boeing adequate? Explain your
answer.
– What steps could Boeing and the FAA have taken to prevent this
problem from occurring?
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System Quality: Data Quality and
System Errors
• What is an acceptable, technologically feasible level of
system quality?
– Flawless software is economically unfeasible
• Three principal sources of poor system performance
– Software bugs, errors
– Hardware or facility failures
– Poor input data quality (most common source of
business system failure)
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Quality of Life: Equity, Access,
Boundaries (1 of 3)
• Negative social consequences of systems
• Big Tech: concentrating economic and political power
• Rapidity of change: reduced response time to competition
• Maintaining boundaries: family, work, and leisure
• Dependence and vulnerability
• Computer crime and abuse

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Quality of Life: Equity, Access,
Boundaries (2 of 3)
• Computer crime and abuse
– Computer crime
– Computer abuse
– Spam
– CAN-SPAM Act of 2003
• Employment
– Trickle-down technology
– Reengineering job loss
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Quality of Life: Equity, Access,
Boundaries (3 of 3)
• Equity and access
– The digital divide
• Health risks
– Repetitive stress injury (RSI)
– Carpal tunnel syndrome (CTS)
– Computer vision syndrome (CVS)
– Technostress

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Interactive Session: Technology: Do
Smartphones Harm Children? Maybe, Maybe
Not.
• Class discussion
– Identify the problem described in this case study. In
what sense is it an ethical dilemma?
– Compare the research findings approving or
disapproving of smartphone use among children and
teenagers.
– Should restrictions be placed on children’s and
teenagers’ smartphone use? Why or why not?
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