E commerce previous year questions

1. EXPLAIN E-COMMERCE ?

Electronic commerce (e-commerce) refers to the buying and selling of goods and services over
the internet. It involves online transactions between businesses, consumers, or both, and includes
a wide range of activities beyond just sales, such as marketing, supply chain management, online
payment processing, and customer support.

Types of E-Commerce:

1. B2C (Business-to-Consumer): Businesses sell directly to consumers (e.g., Amazon,

Netflix).
2. B2B (Business-to-Business): Businesses sell to other businesses (e.g., Alibaba,
Salesforce).
3. C2C (Consumer-to-Consumer): Consumers sell to other consumers, often via platforms
(e.g., eBay, Facebook Marketplace).
4. C2B (Consumer-to-Business): Individuals sell products or offer services to businesses
(e.g., influencers offering advertising services).

Key Components:

 Online storefronts or marketplaces (e.g., Shopify, Etsy)

 Digital payment systems (e.g., PayPal, Stripe)
 Mobile commerce (m-commerce): Transactions via smartphones and tablets
 Security technologies: Encryption, authentication for safe transactions
 Logistics and delivery: Fulfillment and shipping of physical goods

Advantages:

 Convenience and 24/7 availability

 Global market reach
 Reduced operating costs
 Personalization and data tracking

Challenges:

 Security and privacy concerns

 Fraud and cybercrime
 Intense competition
 Delivery logistics and returns
 2. POSTER MODEL ?

Poster's model is a widely used framework for understanding electronic commerce by

categorizing its key elements. Poster's model helps businesses structure and optimize their e-
commerce strategy by ensuring all three areas—communication, transaction, and distribution—are
effectively managed. Developed by Michael Poster, this model breaks e-commerce down into
three core components:

🔹 1. Communication

This refers to how businesses connect and interact with customers over the internet.

 Purpose: Deliver information, promote products, and manage customer relations.

 Tools: Websites, emails, online advertising, chatbots, social media.
 Example: An online store using Instagram ads and a customer support chatbot.

🔹 2. Transaction

This is the core of e-commerce—the actual buying and selling process.

 Purpose: Facilitate secure and efficient exchange of goods, services, and payments.
 Tools: Shopping carts, online payment gateways (PayPal, Stripe), order management
systems.
 Example: A user adds items to a cart, pays online, and receives confirmation.

🔹 3. Distribution

This focuses on the delivery of products or services to customers.

 Purpose: Ensure the customer receives what they paid for, either physically or digitally.
 Types:
o Digital delivery (e.g., software, music downloads)
o Physical shipping (e.g., Amazon shipping books)
 Example: Netflix streaming a movie instantly, or Amazon delivering a package.

Summary Table:
 Component Role in E-Commerce Example
Communication Interaction with customers Email marketing, live chat
Transaction Purchase and payment process Online checkout, digital wallets
Distribution Delivery of goods/services Shipping, digital downloads

3. INTERNET PROTOCOL ?

The Internet Protocol (IP) is the fundamental set of rules that governs how data is sent and
received over the internet. It ensures that data travels from one computer (or device) to another in
a structured and reliable way.

🔹 What IP Does:

 Assigns addresses to devices (called IP addresses)

 Routes data packets between devices using these addresses
 Ensures that data reaches the correct destination

🔹 How It Works:

1. Data is broken into packets – Large messages are divided into smaller chunks.
2. Each packet gets an IP header – Contains source and destination IP addresses.
3. Packets are sent across the network – Routers use IP addresses to forward packets.
4. Packets are reassembled – At the destination, the device reassembles the original data.

🔹 Types of IP:

Type Description Example

IPv4 Older version, 32-bit address (most common) 192.168.1.1
IPv6 Newer version, 128-bit address (more space) 2001:0db8::1

🔹 IP vs. Other Protocols:

 IP is part of a larger suite called TCP/IP.

  TCP (Transmission Control Protocol) ensures that all packets arrive and are in the
correct order.
 IP focuses on addressing and routing.

🔹 Why IP Matters:

 Without IP, devices couldn’t find each other on a network.

 It's like a postal system for the internet — every packet needs a "To" and "From" address.

4. BUISNESS STRATEGY?

Business Strategy – Explained Simply

A business strategy is a plan of action a company uses to achieve specific goals and gain a
competitive advantage in the market. It outlines how a business will compete, operate, and grow
over time.

🔹 Key Components of a Business Strategy

1. Vision and Mission

o Why the company exists and what it aims to achieve.
o Example: “To be the most customer-centric company in the world.”
2. Goals and Objectives
o Clear, measurable outcomes the business wants to reach.
o Example: Increase market share by 15% in two years.
3. Competitive Advantage
o What makes the business better than others (e.g., lower costs, innovation, quality).
o Example: Apple’s design and ecosystem.
4. Core Activities
o Key areas the business focuses on (marketing, operations, product development).
o Example: Focus on sustainable sourcing for a fashion brand.
5. Market Strategy
o Defines target customers and how to reach them.
o Example: Social media campaigns targeting Gen Z.
6. Resource Allocation
o Deciding how to use time, money, and people to execute the strategy.
o Example: Investing heavily in R&D for a tech company.
🔹 Types of Business Strategies

Strategy Type Description Example

Cost
Offer the lowest price in the market Walmart
Leadership
Differentiation Offer unique products or services Apple, Tesla
Focus Target a specific niche market Rolex (luxury watches)
Expand through new markets, products, or Amazon acquiring Whole
Growth
M&A Foods

Implementation of IT and Technology in Business Strategy

Implementing Information Technology (IT) and digital technologies is a critical part of

modern business strategy. It helps companies operate more efficiently, innovate faster, and stay
competitive.

🔹 Why Implement IT in Business Strategy?

 Boosts productivity through automation

 Improves decision-making using data analytics
 Enhances customer experience via digital channels
 Enables innovation (e.g., new business models, digital products)
 Strengthens security and compliance

🔹 Key Areas Where IT Supports Strategy Implementation

1. Enterprise Resource Planning (ERP) Systems

o Integrates core processes (HR, finance, supply chain).
o Example: SAP, Oracle ERP.
2. Customer Relationship Management (CRM)
o Manages customer data and engagement.
o Example: Salesforce, HubSpot.
3. Business Intelligence & Analytics
o Turns data into insights for better decisions.
o Tools: Power BI, Tableau, Google Analytics.
4. Cloud Computing
 o Scales resources on demand, lowers infrastructure costs.
o Example: AWS, Microsoft Azure.
5. E-commerce Platforms
o Expands sales channels online.
o Example: Shopify, Magento.
6. Cybersecurity Tools
7.
o Protects company data and systems.
o Example: Firewalls, antivirus, multi-factor authentication.
8. Artificial Intelligence (AI) & Automation
o Improves efficiency, customer service, and product recommendations.
o Example: Chatbots, predictive maintenance.

5. What is B2B in EC? Characteristics of B2B in Electronic Commerce,

and Models of B2B. Explain.

What is B2B in Electronic Commerce (E-Commerce)?

B2B (Business-to-Business) in e-commerce refers to online transactions between businesses,

rather than between a business and individual consumers (B2C). In B2B, companies sell goods,
services, or information to other companies over the internet.

🔹 Characteristics of B2B in E-Commerce

1. High Volume Transactions

o Orders are typically large, involving bulk purchases.
2. Long-Term Relationships
o Businesses often build ongoing partnerships for supplies or services.
3. Customized Products or Services
o Offerings may be tailored to client needs (e.g., custom software, bulk pricing).
4. Negotiated Pricing
o Prices are often based on contracts, not fixed like in B2C.
5. Complex Decision-Making
o Multiple stakeholders are involved in purchasing decisions.
6. Automated Transactions
o Use of Electronic Data Interchange (EDI), APIs, and procurement software.
7. Integrated Supply Chains
o B2B systems often link directly into supply chain and inventory systems.
8. Payment Terms
 o Common to have delayed payments (e.g., net 30, net 60 days), unlike instant B2C
payments.

🔹 Models of B2B in E-Commerce

Here are the main B2B e-commerce models:

Model Description
One supplier sells to many buyers through a dedicated
Supplier-Oriented
website
Buyer-Oriented A large buyer invites multiple suppliers to bid or supply
Intermediary-Oriented / Third-party platforms facilitate transactions between buyers
Marketplace and sellers
B2B Vertical Marketplaces Industry-specific platforms (e.g., for chemicals, electronics)
B2B Horizontal Marketplaces General platforms serving multiple industries

6. explain electronic credit card system

Electronic Credit Card System – Explained

An Electronic Credit Card System refers to the digital infrastructure that allows users to
make secure online payments using their credit cards. It's a key part of e-commerce that enables
the transfer of funds between buyers, merchants, banks, and payment processors.

🔹 Key Participants

1. Cardholder – The customer making a purchase.

2. Merchant – The business selling goods or services.
3. Issuing Bank – The bank that issued the customer’s credit card.
4. Acquiring Bank – The merchant’s bank that processes payments.
5. Payment Gateway – The system that securely transmits card data from the merchant to
the payment processor.
6. Card Network – (e.g., Visa, MasterCard) that authorizes and settles the transaction.

🔹 How It Works – Step-by-Step

1. Customer places an order on the merchant's website and enters credit card details.
 2. Payment gateway encrypts the data and sends it to the card network (e.g., Visa).
3. The card network routes the request to the issuing bank for approval.
4. The issuing bank checks:
o Card validity
o Available credit
o Fraud risk
5. If approved, an authorization code is sent back through the chain to the merchant.
6. The merchant completes the transaction and ships the goods.
7. The settlement process transfers the funds from the issuing bank to the acquiring bank,
then to the merchant's account.

🔹 Security Features

 SSL encryption for secure data transmission

 CVV code for card verification
 Tokenization (replaces card data with a unique code)
 3D Secure (e.g., Verified by Visa, Mastercard SecureCode)
 Fraud detection systems

🔹 Advantages

 Fast and convenient for customers

 Supports global transactions
 Builds trust with secure, verified payments
 Compatible with mobile and digital wallets (e.g., Apple Pay)

7. Business Strategy in Electronic Age

Business Strategy in the Electronic Age

The Electronic Age—driven by the internet, digital technology, and data—has transformed how
businesses operate, compete, and deliver value. A business strategy in the electronic age must
align with this digital environment to stay relevant and successful.

🔹 What is Business Strategy in the Electronic Age?

It is a company's long-term plan that leverages digital technologies and online platforms to
gain competitive advantage, improve customer experience, and drive innovation and growth.
🔹 Key Features of Business Strategy in the Electronic Age

1. Digital Integration
o Using digital tools in all areas of business: operations, marketing, HR, finance,
etc.
2. Customer-Centric Approach
o Using data and digital tools to deeply understand and serve customers (e.g.,
personalization).
3. Agility and Innovation
o Adopting flexible models to respond quickly to market changes and technological
disruptions.
4. Global Reach
o Using e-commerce and digital platforms to expand internationally with fewer
barriers.
5. Data-Driven Decision Making
o Using analytics, AI, and big data to guide strategy and operations.
6. Online Channels & Automation
o Leveraging e-commerce, mobile apps, social media, and automation for sales and
services.

🔹 Key Components of a Digital-Age Business Strategy

Component Description Example

Digital
SEO, social media, email campaigns Coca-Cola using Instagram ads
Marketing
E-Commerce Selling products/services online Amazon, Shopify
Cloud
Storing and accessing data online Using AWS for app hosting
Computing
Netflix's recommendation
AI & Analytics Gaining insights and automating tasks
engine
Cybersecurity Protecting digital assets and customer data Using firewalls and encryption
Ensuring mobile-friendly services and
Mobile Strategy Starbucks app for ordering
apps

What is Extranet and its model explain?

What is an Extranet?

An Extranet is a private network that uses internet protocols (such as TCP/IP) to securely
share part of an organization’s information or operations with external parties, like
suppliers, partners, vendors, or customers. It acts as a bridge between an organization’s
internal network (Intranet) and the public internet, with controlled access.

🔹 Key Features of an Extranet

 Secure access for authorized external users

 Real-time collaboration and data sharing
 Enhances supply chain and customer service efficiency
 Reduces costs of communication and paperwork
 Often protected by firewalls, VPNs, and login credentials

🔹 Benefits of Using an Extranet

Benefit Description
Improved Collaboration Real-time sharing of documents, orders, and updates
Faster Communication Direct communication with partners/suppliers
Cost Reduction Lowers mailing, printing, and manual processing costs
Efficient Operations Integration with ERP and order systems
Stronger Relationships Builds trust and transparency with stakeholders

🔹 Common Uses of Extranets

 Supply Chain Management: Allowing suppliers to check inventory or submit bids.

 Project Collaboration: Letting multiple companies work together on a shared project.
 Customer Portals: Providing premium customers access to order tracking, support, etc.
 B2B E-commerce: Sharing price lists, catalogs, and contracts with resellers.

🔹 Models of Extranet

There are three common models based on how access is provided and managed:
 Model Description Example
One-to-Many (Supplier One company provides access to A car company managing all
Extranet) many suppliers/vendors parts suppliers
Many-to-One Multiple businesses access the Retailers accessing a
(Customer Extranet) system of a larger organization distributor’s inventory
Many-to-Many (Joint Shared platform among multiple A consortium of airlines
Venture Extranet) businesses for collaboration managing booking and logistics

Discuss selling of web, chatting on web, and multimedia delivery.

1. Selling on the Web (Online Selling / E-Commerce Sales)

Selling on the web refers to the process of marketing and selling products or services online
through websites or platforms.

🔹 Key Methods of Selling Online:

 E-commerce websites (e.g., Amazon, Shopify stores)

 Online marketplaces (e.g., eBay, Etsy)
 Social media platforms (e.g., Instagram, Facebook Shop)
 Affiliate marketing (promoting products for a commission)
 Subscription services (e.g., Netflix, monthly product boxes)

🔹 Features of Online Selling:

 24/7 availability
 Global reach
 Digital payment systems (credit cards, PayPal, UPI)
 Product catalogs, customer reviews, order tracking
 Secure transactions via SSL, encryption, and secure gateways

✅ 2. Chatting on the Web (Web Chat / Online Messaging)

Chatting on the web allows real-time text, voice, or video communication between users or
between a customer and a business using the internet.

🔹 Types of Web Chat:

 Live chat on websites for customer support

 Messaging apps (e.g., WhatsApp Web, Messenger, Telegram)
  Web-based collaboration tools (e.g., Slack, Microsoft Teams)
 Chatbots for automated responses on websites

🔹 Benefits of Web Chat:

 Instant customer service and problem resolution

 Reduced call center costs
 Multilingual and automated support (chatbots)
 Improves user engagement and satisfaction

🔹 Technologies Used:

 JavaScript, WebSocket, AJAX

 AI for chatbots (e.g., NLP, ML)
 Encrypted communication protocols (HTTPS, TLS)

✅ 3. Multimedia Delivery on the Web

Multimedia delivery is the transmission and presentation of audio, video, images, animations,
and interactive content over the internet.

🔹 Common Types of Multimedia:

 Streaming video/audio (e.g., YouTube, Spotify)

 Interactive websites and e-learning platforms
 Virtual tours and 3D visualizations
 Web-based games and apps

🔹 Delivery Methods:

 Streaming: Real-time playback (e.g., Netflix, Twitch)

 Download and Play: File is downloaded before use
 Progressive download: Starts playing while downloading

🔹 Technologies Used:

 HTML5, CSS, JavaScript

 Media codecs (MP4, MP3, WebM)
 CDNs (Content Delivery Networks) for faster delivery
 WebRTC for live media streaming

What is Supply Chain? And Porter's Value Chain and its Models?
✅ What is a Supply Chain?

A Supply Chain is the network of people, companies, activities, information, and resources
involved in producing and delivering a product or service from the raw material stage to the
final consumer.

🔹 Key Stages of a Supply Chain:

1. Supplier – Provides raw materials.

2. Manufacturer – Converts raw materials into finished products.
3. Distributor – Transports products to retailers.
4. Retailer – Sells products to customers.
5. Customer – Final end-user who purchases the product.

🔹 Functions of a Supply Chain:

 Procurement
 Production
 Inventory management
 Logistics (transport and warehousing)
 Order fulfillment
 Customer service

🔹 Importance of Supply Chain:

 Reduces operational costs

 Improves efficiency and speed
 Enhances customer satisfaction
 Increases competitiveness

✅ Porter's Value Chain – Explained

The Value Chain, introduced by Michael Porter, is a model that helps businesses analyze their
internal activities to understand how value is created for the customer and how competitive
advantage can be gained.
🔹 Porter's Value Chain Model Structure:

Porter divides business activities into two categories:

1. Primary Activities – Directly involved in creating and delivering the product:

Activity Description

Inbound Logistics Receiving, storing, and handling of raw materials

Operations Converting inputs into finished products

Outbound Logistics Delivering products to customers

Marketing & Sales Promoting and selling the product

Service Post-sale services like maintenance and support

2. Support Activities – Help improve the efficiency of primary activities:

Activity Description

Firm Infrastructure Company management, planning, finance, legal

Human Resource Management Hiring, training, and retaining employees

Technology Development Research & development, automation, and process improvement

Procurement Purchasing raw materials and supplies

🔹 Purpose of Porter's Value Chain:

 Identify where value is added in a business process

 Improve internal processes
 Discover cost advantages or differentiation points

✅ Difference Between Supply Chain and Value Chain

Feature Supply Chain Value Chain

Focus Flow of goods and services Value creation in each step of the business

Scope External + internal logistics Mostly internal business functions

 Feature Supply Chain Value Chain

Objective Efficiency, cost reduction Customer value, competitive advantage

Includes Suppliers, logistics, distribution All activities (support + primary) that add value

electronic check system?

✅ Electronic Check System (E-Check) – Explained

An Electronic Check (e-check) is a digital version of a traditional paper check. It allows

funds to be withdrawn from a customer’s checking account electronically and transferred to a
merchant’s bank account via the internet.

E-checks are commonly used in electronic commerce (e-commerce) for online bill payments,
subscriptions, and business-to-business (B2B) transactions.

🔹 How Does an E-Check Work? (Step-by-Step)

1. Authorization
The customer authorizes the payment by providing:
o Bank account number
o Routing number
o Name and amount
2. Authentication & Encryption
The information is securely encrypted and verified by the payment processor.
3. Submission
The e-check request is submitted to the Automated Clearing House (ACH) network.
4. Processing
The ACH system processes the transaction, debiting the payer’s bank and crediting the
recipient’s bank.
5. Settlement
The money is transferred, usually within 3–5 business days.

🔹 Features of E-Check System

 Works through ACH (Automated Clearing House)

 Requires a bank account (not a credit/debit card)
 Typically used for recurring payments, B2B payments, payroll, etc.
 Includes digital signature or agreement for authorization
🔹 Advantages of Electronic Checks

Benefit Description
Cost-effective Lower fees than credit card transactions
Secure Encrypted and regulated under banking laws
Convenient No need for paper handling or mailing
Good for large payments Preferred for high-value or business transactions
Environment-friendly Reduces paper use and physical proces

🎰 Gambling in E-Commerce (Online Gambling)

Gambling in e-commerce refers to the use of online platforms and digital payment systems to
participate in gambling activities over the internet. This includes casino games, sports betting,
lotteries, poker, and more—all conducted via e-commerce websites or mobile apps.

✅ Types of Online Gambling in E-Commerce:

Type Description Example

Online Casinos Virtual casino games like slots, blackjack, roulette Betway, 888Casino
Wagering on sports events through online
Sports Betting Bet365, DraftKings
platforms
Online Poker
Competing in digital poker games with real money PokerStars
Rooms
TheLotter,
Lottery Sites Buying lottery tickets online
LottoSmile
Fantasy Sports Betting on fantasy teams based on real-life sports Dream11, FanDuel

🔹 Features of Gambling in E-Commerce

 Real-time transactions through credit cards, e-wallets, crypto, etc.

 Mobile apps and web-based access 24/7
 Digital bonuses, loyalty programs, and rewards
 Live betting and real-time game streams
 AI-powered odds and analytics
🔹 Advantages of Online Gambling in E-Commerce

 Easy access from anywhere

 Fast digital payments
 Wide variety of games
 Personalization using AI
 Low operating costs for providers

🔹 Disadvantages

 High risk of addiction

 Legal and regulatory uncertainty
 Trust and fairness concerns
 Social and financial risks to users

What is Electronic Data Interchange? Explain auctions and services from traditional market to
internet-based EDI. ?

✅ What is Electronic Data Interchange (EDI)?

Electronic Data Interchange (EDI) is the computer-to-computer exchange of standardized

business documents (like invoices, purchase orders, shipping notices) between organizations
using electronic formats, without human intervention.

Instead of using paper or email, EDI automates business communication between trading
partners (e.g., manufacturers, suppliers, retailers).

🔹 Key Features of EDI:

 Standardized document formats (e.g., ANSI X12, EDIFACT)

 Direct communication between computer systems
 Real-time or scheduled transactions
 High accuracy and reduced manual errors
 Secured using encryption, authentication, and EDI protocols
🔹 Common Documents Transferred via EDI:

Document Type Description

Purchase Orders Orders sent from buyer to seller

Invoices Billing documents

Shipping Notices Details about shipped goods

Payment Instructions Bank transfers or remittance info

✅ From Traditional Market to Internet-Based EDI

🔸 Traditional EDI:

 Uses private networks like VANs (Value Added Networks)

 High setup cost and complexity
 Requires dedicated EDI software and hardware
 Limited to large companies

🔸 Internet-Based EDI (Web EDI):

 Uses the Internet and web browsers for EDI communication

 Lower cost and easier to implement
 Accessible to small and medium businesses (SMEs)
 Often uses XML or JSON formats instead of legacy EDI codes

Feature Traditional EDI Internet-Based EDI

Cost High Low

Network Private (VAN) Public (Internet)

Ease of Use Complex User-friendly

Accessibility Big businesses only Suitable for all businesses

Integration Custom integration Cloud-based or plug-in apps

✅ EDI and Auctions in E-Commerce

🔹 What is an Auction?
An auction is a system where buyers bid for goods/services, and the highest bidder wins. EDI
can be used to manage auction-related documents between sellers and buyers.

🔸 Types of Auctions in E-Commerce:

Type Description

Forward Auction Many buyers, one seller (e.g., eBay)

Reverse Auction Many sellers compete to sell to one buyer

Dutch Auction Price drops until a buyer accepts it

Sealed-Bid Auction Bidders submit private offers simultaneously

🔹 Role of EDI in Auctions:

 Automates bid submissions, confirmations, contracts

 Transmits transaction data securely and quickly
 Reduces errors, time, and paperwork
 Used in B2B procurement portals and government auctions

✅ Services Evolved from Traditional to Internet-Based EDI:

Traditional Service Internet-Based Equivalent

Faxing purchase orders Web form submission via portal

Mailing invoices E-invoicing over secure email/API

Manual data entry Auto-integrated cloud systems

Proprietary EDI formats XML/JSON or API-based formats

What are digital signatures? How they are used in payments?

✅ What are Digital Signatures?

A digital signature is a cryptographic technique used to verify the authenticity, integrity,

and origin of digital data or messages. It acts like an electronic "fingerprint" that ensures a
document or message was created and sent by a specific person, and that it was not altered in
transit.

🔹 Key Features of Digital Signatures:

 Based on public-key cryptography (asymmetric encryption)

 Provides authentication (who sent it)
 Ensures integrity (data wasn't changed)
 Offers non-repudiation (sender cannot deny sending it)

🔹 How Digital Signatures Work (Simplified Steps):

1. The sender hashes the message (generates a fixed-size digital summary).

2. The hash is encrypted with the sender’s private key — this is the digital signature.
3. The message and the signature are sent to the recipient.
4. The recipient decrypts the signature using the sender’s public key to retrieve the hash.
5. The recipient generates a hash from the received message and compares it to the
decrypted one.
o If both hashes match, the signature is valid.

✅ How Digital Signatures Are Used in Payments:

Digital signatures play a critical role in ensuring the security and trust of online and electronic
payment systems.

🔸 Use Cases in Payment Systems:

Use Case Description

Online Banking Verifying users and authorizing transactions
E-commerce Transactions Authenticating digital invoices, orders, and confirmations
Digital Wallets (UPI, PayPal,
Securing transfer requests and preventing fraud
etc.)
E-Invoicing and Billing Signed invoices ensure authenticity between businesses
Signatures validate blockchain transactions (e.g., Bitcoin,
Cryptocurrency Transactions
Ethereum)
🔹 Benefits in Payment Systems:

 ✅ Authentication: Confirms the payer is authorized.

 🔐 Security: Prevents tampering or forgery of payment instructions.
 🚫 Non-repudiation: Payer cannot deny making the payment.
 ⚡ Speed: Faster processing compared to manual verification.
 🌍 Global standard: Supported by laws like the IT Act (India), eIDAS (Europe), etc.

🔐 Consequences of Cyberattacks – Explained

Cyberattacks can have severe consequences for individuals, businesses, and governments. These
attacks may lead to financial loss, data breaches, reputational damage, and even national
security threats.

✅ 1. Financial Loss

 Direct Theft: Hackers may steal money from bank accounts or through fraudulent
transactions.
 Ransom Payments: Victims may be forced to pay ransom (e.g., ransomware attacks).
 Business Disruption: Downtime due to cyberattacks can halt operations and lead to lost
revenue.
 Recovery Costs: Cost of investigation, repair, and strengthening systems.

✅ 2. Data Breaches and Loss

 Personal Data Theft: Hackers can steal sensitive personal information (SSNs, credit
card numbers, etc.).
 Business Data Loss: Intellectual property, trade secrets, or customer records may be
exposed or deleted.
 Legal Consequences: Organizations may face lawsuits or fines for failing to protect data
(e.g., under GDPR or HIPAA).

✅ 3. Reputational Damage

 Loss of customer trust and brand reputation.

 Negative media coverage and public backlash.
  Long-term impact on customer loyalty and market value.

✅ 4. Operational Disruption

 IT systems and networks may become inoperable.

 Service outages can affect customers and partners.
 Supply chain interruptions can delay production or delivery.

✅ 5. National Security Risks

 Cyberattacks on government infrastructure, military systems, or public utilities can:

o Endanger national security
o Cause public panic
o Disrupt essential services (electricity, water, transport)

✅ 6. Intellectual Property Theft

 Attackers can steal patents, designs, software code, and research data.
 Competitors or foreign states may use stolen IP for economic or military advantage.

✅ 7. Identity Theft

 Stolen personal data can be used to:

o Open fraudulent accounts
o Make unauthorized purchases
o Impersonate the victim online or offline

✅ 8. Legal and Regulatory Penalties

 Failure to protect data can result in:

o Fines from regulatory bodies
o Lawsuits from affected individuals
o Criminal charges in extreme cases
✅ 9. Psychological and Social Impact

 Victims may suffer from stress, fear, and anxiety.

 Employees may feel unsafe or demoralized.
 Can impact relationships and mental health.

📢 What is Viral Marketing?

Viral marketing is a marketing strategy that encourages people to share a promotional

message or content with others, often via social media, email, or messaging apps, causing the
message to "go viral" — rapidly spreading like a virus.

The idea is to leverage users’ networks to organically multiply a brand’s reach, instead of
relying solely on paid advertising.

🔹 Key Features of Viral Marketing:

Feature Description
High Shareability Content is designed to be shared widely
Low Cost Relies more on organic reach than advertising spend
Rapid Spread Can reach millions in a short time
Emotional Appeal Often uses humor, shock, inspiration, or curiosity
Network Effect Grows as more people share with their own circles

✅ Examples of Viral Marketing Content:

 Funny or emotional videos (e.g., Dove's “Real Beauty”)

 Memes and GIFs
 Challenges or trends (#IceBucketChallenge)
 Referral programs (Dropbox offering free storage for referrals)
 Influencer collaborations
 Shareable infographics or “life hacks”

🔹 Benefits of Viral Marketing:

  Massive brand exposure
 Builds brand awareness quickly
 Cost-effective compared to traditional advertising
 Enhances customer engagement and loyalty
 Potential to reach global audiences

🔐 Security Threats in E-Commerce

E-commerce platforms deal with sensitive data like customer personal details, payment
information, and business transactions. As a result, they are prime targets for various
cybersecurity threats. These threats can compromise confidentiality, integrity, availability,
and trust.

✅ 1. Phishing Attacks

 Fake emails or websites that trick users into revealing sensitive info like login
credentials or card numbers.
 Often disguised as legitimate company messages.

Example: A fake Amazon login page that steals user passwords.

✅ 2. Malware and Ransomware

 Malware: Malicious software that steals data, tracks user activity, or damages systems.
 Ransomware: Locks files or systems and demands payment to restore access.

Impact: System shutdown, data theft, or financial loss.

✅ 3. SQL Injection

 Attackers inject malicious SQL code into website input fields (like search bars or login
forms) to access or manipulate the database.

Impact: Data leaks or unauthorized access to customer and payment info.

✅ 4. Denial of Service (DoS/DDoS) Attacks

 Overloads the e-commerce site with traffic, making it slow or completely unavailable.
 Often used to disrupt business during peak times (like sales events).

✅ 5. Cross-Site Scripting (XSS)

 Attackers inject malicious scripts into webpages viewed by other users.

 Can be used to steal session cookies or hijack accounts.

✅ 6. Credit Card and Payment Fraud

 Use of stolen card details to make purchases.

 Includes man-in-the-middle attacks during transaction processing.

✅ 7. Man-in-the-Middle (MitM) Attacks

 An attacker secretly intercepts and possibly alters communication between two parties
(e.g., customer and website) during payment or login.

✅ 8. Insider Threats

 Employees or contractors with access misuse their privileges to steal data or sabotage
systems.

✅ 9. Fake Websites or Marketplace Fraud

 Creation of fake online stores or listings to scam users and collect their information or
money.
✅ 10. Insecure APIs

 If an e-commerce platform uses APIs (e.g., for payments, inventory), poorly protected
APIs can be exploited by hackers to gain access.

Push vs. Pull Technology – Explained

Push and Pull technologies refer to how information or content is delivered to users over a
network, especially in contexts like web services, notifications, and data transfers.

🔄 1. Push Technology

In push technology, the server initiates the communication and sends (pushes) data or updates
to the client without the client specifically requesting it.

🔹 Examples:

 Email notifications
 Mobile app alerts (e.g., WhatsApp message)
 Stock market price updates
 Live sports scores or weather alerts

🔸 Characteristics:
Feature Description

Initiator Server

Data flow From server to client

Frequency Real-time or event-triggered

Bandwidth Usage More efficient; updates sent only when needed

User Role Passive (receives data)

🔁 2. Pull Technology
In pull technology, the client initiates the request and retrieves (or pulls) data from the server
when it chooses to.

🔹 Examples:

 Refreshing a webpage
 Downloading a file
 Searching on Google
 Checking emails manually

🔸 Characteristics:
Feature Description

Initiator Client

Data flow From client request to server response

Frequency User-controlled (on-demand)

Bandwidth Usage Can be higher if repeated polling

User Role Active (requests data)

🔍 Push vs Pull – Comparison Table

Feature Push Technology Pull Technology

Initiated by Server Client

Data Sent When Event occurs Client requests

Real-time Support Yes No (unless continuously polled)

User Involvement Passive Active

Example Push notifications, news alerts Browsing websites, search engines

🚫 What are Denial of Service (DoS) Attacks?

A Denial of Service (DoS) attack is a cyberattack aimed at making a website, server, or
network unavailable to users by overwhelming it with traffic or malicious requests. The goal
is to disrupt normal operations, causing downtime, lost revenue, and reputational damage.

🔹 Types of DoS Attacks:

1. DoS (Denial of Service)

 A single machine or attacker sends excessive requests to overload a system.

 Easier to block but still disruptive.

2. DDoS (Distributed Denial of Service)

 Involves multiple computers or devices (botnet) attacking at once.

 Much harder to defend due to traffic coming from many sources.

Infrastructure of E-Commerce – Explained

The infrastructure of e-commerce refers to the technology, hardware, software, networks,

and services required to enable and support buying, selling, and online transactions over the
internet.

🔹 1. Hardware Infrastructure

Includes the physical components that form the base of any e-commerce system.

 Servers (web, application, and database servers)

 Data centers
 Client devices (PCs, smartphones, tablets)
 Networking devices (routers, switches, firewalls)

🔹 2. Software Infrastructure

Essential software and platforms that run and support e-commerce operations.
  Web servers (e.g., Apache, Nginx)
 E-commerce platforms (e.g., Shopify, WooCommerce, Magento)
 Databases (e.g., MySQL, Oracle)
 Payment gateways (e.g., PayPal, Stripe, Razorpay)
 Inventory management systems
 ERP and CRM systems

🔹 3. Network Infrastructure

Facilitates the communication and data transfer between users and systems.

 Internet connectivity
 LAN/WAN networks
 Cloud services and content delivery networks (CDNs)
 Secure protocols (e.g., HTTPS, SSL/TLS)

🔹 4. Payment Infrastructure

Supports secure and efficient processing of online payments.

 Digital wallets (e.g., Google Pay, Apple Pay)

 Credit/debit card processors
 Banking integration (UPI, NEFT, etc.)
 Security standards (e.g., PCI DSS compliance)

🔹 5. Security Infrastructure

Protects against cyber threats and ensures safe transactions.

 Firewalls & antivirus software

 SSL certificates
 Two-factor authentication
 Encryption tools
 Intrusion detection/prevention systems (IDS/IPS)

🔹 6. Logistics & Supply Chain Infrastructure

Manages order fulfillment and delivery processes.

 Warehouse management systems

 Courier integration
 Inventory tracking systems
 Reverse logistics (returns & refunds)

🔹 7. Support Services

Additional services that improve operations and user experience.

 Email and chat support

 Customer service tools
 Marketing tools (SEO, analytics, ads)
 Social media integration

🏅 First Mover Advantage in E-Commerce

The First Mover Advantage (FMA) refers to the competitive edge a company gains by being
the first to enter a market or industry with a new product or service. In the context of e-
commerce, it means being the first online retailer or service provider in a specific niche or
sector, allowing the company to build brand recognition, customer loyalty, and establish market
dominance before competitors arrive.

🔹 Key Components of First Mover Advantage:

1. Brand Recognition
o Being the first to market allows a business to establish itself as the go-to brand,
making it easier to build customer trust and loyalty.
o Example: Amazon as an early mover in the online retail market.
2. Customer Loyalty
o Early entrants can create a strong customer base that continues to buy from
them, even when competitors emerge.
o Example: Early users of Netflix or Spotify are often loyal to the platform, even if
newer competitors appear.
3. Technological Leadership
o First movers often develop innovative technology or services that give them an
advantage over competitors.
 o Example: eBay established itself as the first major online marketplace, developing
features and processes that competitors later adopted.
4. Network Effects
o As more users adopt a platform, the value of the service increases (i.e., a large
user base attracts even more users).
o Example: Facebook grew quickly due to the network effect, where the value of
the platform increased as more people joined.
5. Control Over Resources
o First movers can often secure key resources like prime domain names,
trademarks, patents, and distribution channels.
o Example: Google became the dominant search engine by capturing the largest
share of the internet's search queries.
6. Cost Advantages
o Early entrants can scale quickly and achieve economies of scale, which helps
them reduce costs and improve profitability.
o Example: Amazon used its early entry to create an efficient logistics and
fulfillment network, allowing it to offer lower prices and faster shipping.

🔸 Challenges and Risks of First Mover Advantage:

1. High Costs and Risk of Failure

o Being the first involves investing heavily in research, development, and
marketing with no guarantee of success.
o Example: Pets.com, an early online pet supply retailer, failed despite being an
early entrant in the e-commerce space.
2. Competitors Imitating Innovations
o While first movers may have an initial advantage, later competitors can learn
from their mistakes and improve upon the business model or technology.
o Example: Yahoo! was an early mover in search, but Google quickly surpassed it
by improving search algorithms and focusing on user experience.
3. Market Education
o First movers often have to spend significant time and resources educating the
market and building awareness about new products or services, which can be
costly.
o Example: Early e-commerce sites had to convince users that online shopping was
secure and convenient.
4. Changing Market Conditions
o First movers must adapt quickly to changes in technology, customer behavior, or
regulations.
o Example: Early online retailers had to shift to mobile platforms as smartphones
became more widely used, leading to new challenges and costs.
🌐 Difference Between E-Commerce and Internet Commerce

While E-Commerce and Internet Commerce are often used interchangeably, there are subtle
differences between the two, particularly in terms of scope and medium. Let's explore the
distinctions.

1. E-Commerce (Electronic Commerce)

E-commerce refers to any kind of business transaction conducted electronically, whether via
the internet, mobile networks, or other forms of electronic systems.

🔹 Key Features of E-Commerce:

 Broad Scope: Covers all types of online transactions, including business-to-business

(B2B), business-to-consumer (B2C), consumer-to-consumer (C2C), and consumer-to-
business (C2B).
 Platforms Used: Includes websites, mobile apps, social media, and even SMS (text
message) based commerce.
 Payment Methods: Payment through credit cards, digital wallets, or even offline
methods like bank transfers.
 Delivery: Can include digital products (e-books, software), physical goods (retail), or
services (online subscriptions, consultations).

🔹 Examples of E-Commerce:

 Amazon: Online shopping and marketplace platform.

 Alibaba: B2B and C2C e-commerce platform.
 eBay: Auction and retail platform for C2C and B2C transactions.

2. Internet Commerce

Internet Commerce, on the other hand, is a subset of e-commerce and specifically refers to
commerce conducted via the internet. It focuses on buying, selling, and trading goods and
services exclusively online through web-based platforms.

🔹 Key Features of Internet Commerce:

 Internet-Only: Only web-based transactions are involved, requiring an internet

connection.
 Limited Scope: Deals mainly with online buying and selling between businesses and
consumers, or C2C through internet websites.
  Platforms Used: Primarily websites and online portals.
 Payment Methods: Most transactions involve digital payments via credit/debit cards,
internet banking, or digital wallets.

🔹 Examples of Internet Commerce:

 Amazon.com: Online retail through the internet.

 Netflix: Streaming services via the internet.
 Booking.com: Travel bookings through an online platform.

� Key Differences Between E-Commerce and Internet Commerce

Feature E-Commerce Internet Commerce

Broad, includes all forms of electronic Narrower, restricted to transactions

Scope
transactions (not limited to the internet) conducted via the internet

Can include the internet, mobile networks, Exclusively uses the internet (websites,
Medium
SMS, and other platforms apps)

Websites, mobile apps, in-person systems (like Only web-based platforms and apps
Platform
point-of-sale) (via the internet)

Payment Online payments, digital wallets, bank Online payments like digital cards,
Methods transfers, etc. wallets, or internet banking

Amazon, B2B, mobile commerce, offline-to- Amazon.com, Netflix, Online travel

Examples
online (O2O) services agencies

🌐 What is Intranet Software?

Intranet software is a private network system used within an organization to facilitate

communication, collaboration, and access to company resources. Unlike the internet, which
is publicly accessible, an intranet is a secure internal network that is only accessible to the
organization’s employees or authorized users. Intranet software is used to manage and support
the functionalities of this internal network.

🔹 Key Features of Intranet Software:

 1. Internal Communication
o Provides tools for instant messaging, forums, discussion boards, and email to
enhance communication between employees and teams.
2. Document Sharing and Collaboration
o Facilitates the sharing and collaboration of documents, files, and resources
securely within the organization.
o Version control to ensure that the most up-to-date documents are available to
employees.
3. Employee Directory
o Offers an employee directory with contact information, organizational charts,
and profiles for easy employee lookup.
4. Access to Resources
o Centralized access to internal systems like HR databases, project management
tools, and knowledge bases.
o Self-service portals where employees can update personal information or access
HR-related resources.
5. Security Features
o Intranet software typically includes features such as role-based access control,
ensuring only authorized users can access sensitive data or systems.
o Use of firewalls, encryption, and authentication methods to protect the network.
6. Integration with Other Business Systems
o Intranet software can integrate with other systems used by the company, such as
CRM (Customer Relationship Management) or ERP (Enterprise Resource
Planning) systems, to streamline processes.
7. Search Capabilities
o Powerful search engines that allow employees to quickly find internal resources,
documents, and information.
8. Employee Engagement Tools
o Includes tools like surveys, polls, news updates, and social feeds to keep
employees informed and engaged with company activities and policies.

🔹 Types of Intranet Software:

1. On-premise Intranet Software

o Hosted on the organization’s own servers and managed by internal IT staff.
o Offers greater control but requires significant investment in hardware,
maintenance, and security.
2. Cloud-based Intranet Software
o Hosted on the cloud by a third-party provider.
o Provides greater flexibility, scalability, and cost savings with easy remote
access and less internal infrastructure management.
🔹 Benefits of Using Intranet Software:

1. Improved Communication
o Centralizes communication channels, making it easier for teams and departments
to collaborate efficiently.
o Helps break down silos within the organization.
2. Increased Productivity
o Employees have easy access to resources and tools needed to perform their jobs,
reducing time spent searching for information.
o Real-time updates and notifications keep employees informed and aligned.
3. Enhanced Security
o Sensitive company information is protected by internal security measures,
reducing the risk of data breaches.
o Helps ensure compliance with regulatory requirements like GDPR, HIPAA, etc.
4. Cost Savings
o Reduces the need for external communication tools and systems.
o Automates many internal processes, saving time and resources.
5. Knowledge Management
o Centralized repositories for documents, policies, and training materials help
preserve organizational knowledge and support onboarding of new employees.

💻 What is Biometric Identification?

Biometric identification refers to the use of unique biological or behavioral traits to verify
the identity of an individual. Unlike traditional methods of identification, such as passwords or
ID cards, biometric systems rely on physical characteristics or behavioral patterns that are
unique to each person.

Biometric identification is widely used for security purposes, ensuring that only authorized
individuals can access systems, devices, or physical locations.

🔹 Types of Biometric Identification:

1. Fingerprint Recognition
o Fingerprint scanners capture and analyze the unique patterns of ridges and
valleys in an individual’s fingertips.
o Common Use Cases: Smartphone unlocking, employee attendance systems, and
security checkpoints.
2. Facial Recognition
o This technology uses unique facial features, such as the distance between eyes,
nose shape, and jawline, to identify individuals.
 o Common Use Cases: Security surveillance, phone unlocking, and airports for
passenger identification.
3. Iris Recognition
o Uses the unique patterns in the iris (the colored part of the eye) for identification.
Iris scans are often more accurate than facial recognition.
o Common Use Cases: High-security areas, border control, and healthcare systems.
4. Voice Recognition
o Analyzes unique vocal traits, such as tone, pitch, and cadence, to verify an
individual’s identity.
o Common Use Cases: Voice assistants (e.g., Siri, Alexa), phone banking, and
customer service systems.
5. Retina Scanning
o Examines the unique patterns of the blood vessels in the retina at the back of the
eye.
o Common Use Cases: Secure government buildings, military facilities, and high-
security areas.
6. Palm Print Recognition
o Uses the unique pattern of lines and ridges found in the palm of the hand for
identification.
o Common Use Cases: Access control in sensitive areas, identification for
healthcare applications.
7. Hand Geometry
o Measures the shape and size of the hand, including length, width, and thickness
of the fingers.
o Common Use Cases: Access control, time and attendance systems in workplaces.
8. DNA Recognition
o Analyzes an individual’s DNA sequence to identify them uniquely.
o Common Use Cases: Criminal investigations, forensic science, and paternity
testing (though not widely used for daily access control due to its complexity and
cost).

🌐 What is a Network of Networks?

A network of networks refers to a system of interconnected networks that work together to

facilitate communication and data exchange between different devices, systems, or locations. In
simpler terms, it's the concept of multiple independent networks being linked to form a larger,
global network.

The most common example of a network of networks is the Internet, where multiple private,
public, academic, business, and government networks are connected to create one vast
network that spans the globe.
🔹 Key Characteristics of a Network of Networks:

1. Interconnectivity
o Different networks (such as local area networks, wide area networks, or private
networks) are connected together, allowing seamless data exchange between
them.
2. Layered Structure
o A network of networks typically operates on multiple layers, from the local level
(LANs) to wide-scale connections (WANs), and internetworking protocols
(such as TCP/IP) are used to enable communication between these different
layers.
3. Scalability
o The network can scale, meaning that as new networks (or devices) are added, the
overall network continues to function without major disruption. New networks or
systems can be plugged in or integrated easily.
4. Routing and Switching
o To ensure smooth communication between different networks, routers and
switches direct the traffic appropriately. These devices determine the pathway
through which data will flow across networks.

✅ Advantages of a Network of Networks:

1. Global Communication:
o Enables global connectivity, allowing people and organizations to communicate
and share data without boundaries.
2. Increased Efficiency:
o Facilitates better resource sharing, collaboration, and information exchange
between different networks or organizations.
3. Scalability:
o Easy to scale by adding more networks or devices without disrupting the overall
functioning of the system.
4. Redundancy and Reliability:
o Multiple networks can provide backup routes, ensuring that if one path fails, data
can still reach its destination through alternate routes.
E-Cash and Stored-Value Cash
E-Cash (Electronic Cash) refers to digital money that functions like cash but exists
electronically. It is a “digital representation of money” that users download or load onto devices,
then spend by deducting the value storedfincen.govfincen.gov. E-cash is typically prepaid with
conventional currency, and each purchase reduces the stored balancefincen.govfincen.gov. It
comes in two forms: smart‐card e-cash (stored on a chip card) and computer e-cash (stored in
software or on hard drives)fincen.gov. For example, cryptocurrencies (like Bitcoin or Ethereum)
and some digital wallet balances act as e-cash: they hold a monetary value that can be transferred
peer-to-peer and spent with merchants or individuals without involving traditional banks

Stored-Value Cash

Stored-value cash refers to prepaid money that is physically stored on a card or device. A
stored-value card (SVC) holds a certain monetary balance on its chip or memory, independent of
any bank accounten.wikipedia.orgjctindia.org. The key feature is that the value is tied to the card
itself, not linked externally. Users load funds onto the card in advance (by depositing cash,
transfer from a bank, payroll, etc.) and then spend from that stored balance whenever they pay
for goods or servicesfiscal.treasury.goven.wikipedia.org. For example, public transit fare cards
(shown below) store money for subway or bus rides; each tap deducts the fare from the card’s
memory.

Ethical and Public Policy Issues in E-Commerce

As e-commerce continues to grow and transform the global marketplace, several ethical and
public policy concerns arise. These issues are critical for both businesses and governments to
address to ensure fair, secure, and responsible practices in the digital space. Below is a detailed
explanation of the primary ethical and public policy issues in e-commerce.

1. Privacy and Data Protection

Ethical Concern:

E-commerce businesses collect vast amounts of personal data from their customers (such as
names, addresses, credit card details, and browsing behaviors). This raises concerns over data
privacy and whether businesses are adequately safeguarding this sensitive information.

 Risks: Unauthorized data access, misuse of personal information, and potential identity
theft.
  Ethical dilemma: How much personal information should be collected? How can
businesses ensure that data is used only for its intended purpose and not exploited for
profit?

Public Policy Issue:

Governments around the world have enacted regulations to address privacy concerns in e-
commerce:

 General Data Protection Regulation (GDPR) in the European Union mandates strict
guidelines on data usage, user consent, and rights to data erasure.
 California Consumer Privacy Act (CCPA) in the U.S. grants consumers the right to
request access to and deletion of their personal data.

Impact: These regulations set standards for businesses on how they collect, store, and share data
but also raise challenges for global businesses operating in various jurisdictions with different
data protection laws.

2. Cybersecurity and Fraud

Ethical Concern:

Cybersecurity is one of the most significant ethical concerns in e-commerce. Hackers may target
online stores and customers to steal payment information, intellectual property, or sensitive data.
Businesses have an ethical responsibility to implement strong security measures to protect their
customers.

 Risks: Data breaches, fraud, theft, and financial loss.

 Ethical dilemma: Should companies prioritize security at the cost of convenience? How
much investment should they make into cybersecurity?

Public Policy Issue:

Governments have implemented laws and regulations to prevent fraud and secure online
transactions:

 Payment Card Industry Data Security Standard (PCI DSS) outlines security
measures for companies handling card payments.
 Cybersecurity and Infrastructure Security Agency (CISA) works on securing U.S.
critical infrastructure, including e-commerce platforms.

Impact: E-commerce businesses are required to comply with national and international security
standards to avoid penalties and protect customer trust.
3. Consumer Protection

Ethical Concern:

Consumers are often at a disadvantage in e-commerce transactions because they can’t physically
examine products, and there’s a risk of receiving defective goods or being misled by false
advertising. Businesses must ensure that they adhere to ethical standards in product
representation, pricing, and quality.

 Risks: Fraudulent websites, deceptive advertising, misrepresentation of goods, or non-

delivery of goods.
 Ethical dilemma: How much responsibility does the seller have to ensure customer
satisfaction? Should companies be held accountable for third-party sellers' unethical
practices (e.g., on marketplaces like Amazon)?

Public Policy Issue:

Governments are increasingly involved in regulating e-commerce platforms to protect

consumers:

 Consumer Protection Act in many countries regulates the online selling practices,
requiring accurate product descriptions, clear return policies, and fair pricing.
 Online Dispute Resolution (ODR): Some countries promote mechanisms to resolve
consumer complaints without going to court.

Impact: Consumer protection laws are critical to ensuring that online shoppers are treated fairly
and have avenues for resolution in case of disputes. Businesses must provide transparent terms,
return policies, and address customer grievances promptly.

4. Intellectual Property (IP) Rights

Ethical Concern:

Intellectual property protection in e-commerce is a significant ethical issue. E-commerce

businesses must ensure that they are not infringing on the intellectual property rights of others,
such as copyright, trademarks, or patents.

 Risks: Counterfeiting, copyright infringement, and the sale of pirated goods.

 Ethical dilemma: How can e-commerce businesses prevent the sale of counterfeit or
pirated goods while balancing open marketplace models (like eBay or Amazon)?
Public Policy Issue:

Governments regulate intellectual property to safeguard creators and businesses:

 Digital Millennium Copyright Act (DMCA) in the U.S. outlines the legal framework
for digital content protection, especially concerning online platforms.
 Intellectual Property (IP) laws in the EU, U.S., and other regions mandate e-commerce
platforms to respond to takedown notices and prevent the sale of counterfeit goods.

Impact: E-commerce companies must take steps to prevent IP violations, such as implementing
proactive measures to stop counterfeit goods from being sold on their platforms.

5. Taxation and Cross-Border Sales

Ethical Concern:

As e-commerce enables the easy movement of goods across borders, taxation has become a
complex issue. Businesses may attempt to avoid taxes by operating in countries with lower tax
rates, or some may fail to collect sales tax on cross-border sales, putting local businesses at a
disadvantage.

 Risks: Loss of government revenue, unfair competition for local businesses, and tax
evasion.
 Ethical dilemma: Should e-commerce businesses be required to collect sales tax on
products sold internationally or just within their operating country?

Public Policy Issue:

Governments are focusing on how to tax e-commerce sales, especially cross-border transactions:

 Value-Added Tax (VAT) and Sales Tax: Many countries have expanded VAT or sales
tax to apply to online sales (e.g., the EU applies VAT on e-commerce purchases).
 OECD guidelines: The Organization for Economic Cooperation and Development
(OECD) has worked on providing recommendations to ensure fair and effective tax
policies for digital businesses.

Impact: Public policy is focused on regulating online tax collections, ensuring tax fairness, and
protecting government revenue. Companies need to understand and comply with global tax laws
when engaging in international e-commerce.

6. Social and Environmental Responsibility

Ethical Concern:

E-commerce businesses must consider their social and environmental impacts, from the sourcing
of products to packaging and delivery. Excessive packaging, carbon footprints from
transportation, and worker exploitation are critical concerns.

 Risks: Environmental degradation, unfair labor practices, and sustainability issues.

 Ethical dilemma: How much responsibility should companies bear for ensuring ethical
sourcing, fair labor, and sustainable practices?

Public Policy Issue:

Governments have started addressing sustainability and labor practices:

 Environmental laws: Countries are passing regulations requiring businesses to reduce

waste, recycle packaging, and offset carbon emissions.
 Fair Trade regulations: Governments are encouraging businesses to adhere to ethical
sourcing and worker welfare standards.

Impact: E-commerce businesses are under pressure to adopt sustainable practices, both to meet
regulatory requirements and to address consumer concerns about the environmental impact of
their operations.

7. Access and Digital Divide

Ethical Concern:

The digital divide refers to the gap between those with access to modern information and
communication technologies and those without. Many individuals in rural areas or developing
countries have limited access to the internet, which means they are excluded from participating
in e-commerce.

 Risks: Exclusion from economic opportunities, inequalities in access to goods, services,

and opportunities.
 Ethical dilemma: Should e-commerce businesses invest in technology infrastructure to
ensure that underserved populations can also benefit from online commerce?

Public Policy Issue:

Governments are increasingly focused on addressing digital inequality:

 Broadband initiatives: Public policies aim to expand internet access to rural and
underserved areas.
  Digital literacy programs: Governments support education programs to enhance digital
skills.

Impact: Governments encourage policies that support digital inclusivity, enabling e-commerce
businesses to reach underserved populations, which expands market reach and reduces
inequalities.

Intellectual Property System in E-Commerce

The Intellectual Property (IP) system in e-commerce refers to the legal and regulatory
framework that protects the creations of the mind—such as inventions, brand names, logos,
artistic works, software, and digital content—that are used, distributed, or sold online. It ensures
that creators and businesses can control and profit from their innovations and content in the
digital marketplace.

🔑 Types of Intellectual Property in E-Commerce

1. Copyrights
o Protect original works like digital content, software, websites, music, videos, and
product descriptions.
o In e-commerce, copyright safeguards web design, graphics, marketing material,
and multimedia.
o Example: A business’s product photos or blog content cannot be legally reused
by another seller without permission.
2. Trademarks
o Protect brand identity, including names, logos, slogans, and symbols.
o Trademarks distinguish a seller’s goods/services from competitors.
o Example: The Nike swoosh logo or Amazon’s name is trademarked and legally
protected.
3. Patents
o Protect inventions and technical innovations.
o Useful in e-commerce when selling or promoting patented products or processes.
o Example: Amazon’s original “one-click ordering” method was a patented
process.
4. Trade Secrets
o Protect confidential business information like algorithms, customer lists,
marketing strategies, or recipes.
o Example: Google's search algorithm or Coca-Cola's recipe are considered trade
secrets.
📦 Importance of IP in E-Commerce

 Protects brand reputation and digital content.

 Prevents counterfeiting and piracy.
 Encourages innovation and creativity.
 Helps in legal enforcement against infringers.
 Builds trust among consumers by ensuring authenticity.

SET (Secure Electronic Transaction) in E-Commerce

SET (Secure Electronic Transaction) is a security protocol developed in the mid-1990s by

Visa, MasterCard, and technology companies like IBM and Microsoft to ensure safe and
secure credit card transactions over the internet.

It was designed to protect online payments by authenticating parties involved in a transaction,

ensuring data confidentiality, and preventing fraud, even before SSL (Secure Sockets Layer)
became widely adopted.

🔐 Purpose of SET

The main goal of SET was to:

 Secure online credit card payments

 Authenticate the buyer and the seller
 Protect the integrity and confidentiality of payment information
 Prevent unauthorized access or fraud during transactions

� How SET Works (Basic Steps)

1. Cardholder Registration
The customer (cardholder) gets a digital certificate from a Certificate Authority (CA),
which verifies their identity.
2. Merchant Registration
Similarly, the merchant also gets a digital certificate that authenticates their legitimacy.
3. Transaction Process
o The buyer places an order on the merchant's website.
 o The buyer’s system generates two messages:
 One to the merchant, containing the order details.
 One to the bank/payment gateway, containing credit card information.
o These messages are digitally signed and encrypted, ensuring security and non-
repudiation.
4. Payment Authorization
o The merchant sends the payment information to the bank for approval.
o If approved, the merchant is notified and proceeds with the order.
5. Transaction Completion
o The payment is processed securely.
o The order is shipped or delivered to the customer.

🔐 Security Features of SET

Feature Description
Authentication Uses digital certificates to verify both buyer and seller.
Confidentiality Credit card details are encrypted so the merchant never sees them.
Integrity Ensures that the transaction data is not altered during transmission.
Non-repudiation Digital signatures ensure neither party can deny a transaction.