Cookie and Why It Is Used in E-commerce - Essay Example

Contents Contents 1 Introduction 2 Cookie and why it is used in e-commerce 2 The current legal framework (both EU and UK) governing the use of cookies 5 Conclusion 9 Reference 10 Introduction The internet cookies are fairly simple and they have established a hold on the media with the debate still raging on the need of cookie and how to curb the use of cookie. The debate has been also raised on how the cookie has been affecting the internet privacy. It is on these backgrounds that the article is being written. This article will be covering the aspect of cookie, the usage in e-commerce, the regulation of 2003 in European Union and the proposed amendments to the 2003 regulation. Cookie and why it is used in e-commerce A cookie is supposed to be a tiny piece of information that is written on hard drive of the internet when the user visits the site that offers cookies. Cookie files are supposed to be small text files and that occupy not more than 255 characters and 4 k of disk space. The cookies are found to be having a variety of information and that can include the name of the web site visited, the site from which the user has visited the web site, the passwords, the user names that has been given for logging into the system and the filling of forms. The cookies are supposed to be retrievable only by sites that have issued them. The information gathered will be linked to unique id number and the information will be usually available from one session to another.( Alan R. Simon, Steven L. Shaffer,2001) The original idea behind the invention of cookies was to benefit the consumer. This will help the repeat customers to avoid the filling of forms every time they visit the site. This can be understood by a simple thing like when the e-mail is entered, a box will appear whether to save the password that we have used to log in or not. There has been an online search engine that has used the information that has been searched by the user and provides them with updates on the issue searched. The original design of cookies has been time saving and that has been meant for computer users and consumers. The example can be said as to avoid the sending of credit card many times, the online vendor can read a user cookie and match it to a stored profile that will contain the information. The cookies were used to track the web page usage and that was done in such a way that web designers can understand which page is the most effective and the reason for it. The information then could be used for future development and the efforts that have to be made for designing the web pages. The information will be used for updating the web page and maintaining of the pages inside the web site. Cookies were initially designed to match the profile of the user interests and browsing the habits of the user. There has been a natural tool for targeting the advertising for users and that has included the usage of banner ad This concept of banner ad has been generated by using the cookie to understand the preferences of the user. The other advantage is that cookies has helped that the consumers has not been fed by the same advertisement over and over again. The cookies have helped the marketers to understand the sale of specific goods. The example can be said as the consumer has enquired about the subject of fishing in internet and that means the consumer will be interested in the topics of fishing. The marketing can be effective of the consumer is offered the fishing tools, the travel options to places where there is fun in fishing and so on. The cookies are sent by the web server and stored in the client server. The example from the e-commerce site will be growing beyond the entering of information on personal and also the information that has to put in shopping cart and the user will prefer how the item will be shipped. There are some browsers that have the ability to refuse the information that allow cookies and they are not stored on the computer. The e-commerce applications will be providing the example of web based application and that can be said trying to purchase a book online. There would be opening of browser and the URL of the store is provided .The categories of the book are looked and the book is selected and checked out.The point of web based applications is that session will start when the user makes contact with the web site and the user will be finishing the transaction and the closing of browser and timing out of the browser. HTTP is a stateless protocol and it will not provide mechanism for a server to relate with the specific Http request to previous request from the same client. The Netscape has been the first browser to introduce the concept of cookies and cookies has been classified as session cookies and persistent cookies. The e-commerce applications can be associated with e-commerce in the form of shopping cart. The cookies that are not saved on the computer are called the session cookies and the other example of session cookies has been said as checking of the e-mail online. The problem with session cookie is that information gets deleted the moment it is signed of the computer. The identity or the preference of the user is understood more by using persistent cookies. The identity or the preference of the user is understood explicitly. The browser will be providing the identification information through the cookies. The server will be providing the cookies that has been provided by the browser and the information has been stored in the database and that has been looked up. The browser will be saving the cookie on the hard disk and these cookies are called the persistent cookies. The browser should be allowed to use cookies eve for temporary purpose for the e-commerce to work faster. The example of the persistent cookie is the opening of a website and that greets the user on his user name and displays the advertisement of the books that match your personal site. The Internet Explorer will be storing the cookies in a separate file under sub directory. Netscape will be storing the cookies in single text file. The attributes that has been associated with cookies are Domain and path. Opt-Out –cookies are cookies that will be used to prevent the cookies and this will help to block the installation of cookies in browser and that by advertiser or by browser. This is another method of saying that the user is not interested in participating for the targeted ad delivery. The problem with this method is that it will be blocking cookies only from a particular server and not from the cookies from any site you visit. For that there should be change in the browser settings. In simple terms the business has every right to send information till being asked to be stopped.( James Potter,2008) Opt-in cookies The meaning of this is that the user will have to sign up in order to receive targeted ads. The opt in cookies will be giving importance to the privacy factor and the consumers feeling has to be respected. (James Potter,2008) The current legal framework (both EU and UK) governing the use of cookies It has been in the year 2003 that the Privacy and Electronic Communications (EC directive) 2003 was implemented. The exact date of implementation was the December 11; 2003.This has been designed to regulate electronic communication networks and services across European Union. The designing of the regulations has been done in such a way that it has been more of technology neutral. The regulation has been meant to replace the telecommunication regulation of the year 1999.The new legislation frame work has been more on focusing on the telecommunication and new technologies like e-mail and sms.The regulation has been done in such a way that future technologies that involve the processing of personal data will be covered. The 2003 regulation has been meant to cover the Communications data protection directive and this has been builded up from the electronic commerce regulations of the year 2002.There has been strict guideline that company can give information about marketing and that has to be done even when collecting information about mobile phone. The information can be given in the web site where the information will be used.( Rana Tassabehji, 2005) The e-commerce regulations and the 2003 regulations has been instrumental and the other codes that has been meant to check the methods of marketing are the Code of Practice of the Advertising Standard Authority and Code of Practices of the Direct Marketing Association. The marketers should understand the regulation that has to be meant in the industry and that means law firms will be taking into account the law society rules. There has been pressure from the Federation of European Direct Marketing (FEDMA), and the legislation was drafted in such a manner that it is enough to make the user aware that there is cookie and the function of the cookie. Regulation 6 also stipulates that the user should be informed about how to remove the cookies and how to reject the cookies. There should be clear information to the user that comprehensive information about the purposes of the storage of, access of the cookie should be used.( Steve Hedley,2005) The 2003 regulations have been drafted in such a way that the user has not been given the provision of refusing the cookie in any manner. (Mauricio Arregoces, Maurizio Portolani,2004)The method is not attached any importance and mechanism must be uncomplicated and easy to understand and easily accessible to all. The regulation 6 is drafted very broadly and that will be referring the use of an electronic communication network and that will be used to store the information. The stored information will be retrieved and that will be retrieved from the equipment of user. The definition and application of regulation 6 has been meant for cookies but in future it will extend beyond that. Germany has strict regulations on the provision of digital signatures and that has been used or meant for security over internet. France has regulated the use of cookies and that has been allowed only when consent has been received. The attempt to collect data merely for advertisement purpose will not be facing too much penalties in the legislation. The target of information gathering must be told and what is going on and what has to be opted out. There has been allowing of exceptions in the form of storage or access that has been necessary for the purpose of transmitting message over the network and that is strictly necessary for the provision of an information service that has been requested .The directive has been incorporated into the United Kingdom law and the Irish law. The regulations have been 30 and 31 besides 6 in the regulation 2003.( Jonathan Reuvid,2003) The issue of cookie has to be addressed from the point of personal data and there is every chance that personal computer has to be addressed than answering particular person. The example can be said as the home computer that can be used by many persons inside the house and UK information commissioner has suggested that cookies has been as personal identifiers and within the legislation.( Ryan Russell, Syngress Media, Inc, Teri Bidwell, L. Brent Huston, Oliver Steudler, Robin Walshaw, 2004) The other issue in the cookie is that will it be applicable to cookie set on client machine within the European Union by server that has been set from outside? The article 29 working party has suggested that storing of the cookie has been within the European Union and data protection law has stated that data protection law will be protecting all clients where ever the server is located. There is no specific legislation that will be protecting the children’s financial interest online and no data can be sent back if the server is situated outside and that have the problem. Changes to the current legal framework are proposed as part of the Telecoms Package, the likely effect of those changes in practice, other steps have been advocated could be taken to minimize the negative impact of the use of cookies on online consumers. The European Union has been planning for sweeping changes in the internet regulation for cookie and the new regulation proposed will be more for curbing the spam and cookie system. There will be regulation for online abusing the consumer privacy and there has been report that many Europeans are not feeling safe making online transactions. It is based on this background that there has been proposal for making sweeping changes to the regulation. The consumers are not feeling safe of the spam messaging and that has been normally triggered by the cookie system. The spam has been bombarded mainly from the USA and China. Proposed cookie data laws have the power to affect the online marketers. The proposed amendments that have been planned for the regulation in the year 2002 will be making mandatory for web sites to display popup request and only then the tracking mechanism or cookies will come into place. The cookies that are necessary in filling the request made by the visitor will be allowed and that means logging into the system. A large proportion of online marketing or digital marketing will be affected by the law. The other area that can be hit by the proposed new cookie law will be the affiliate marketing. There are some affiliate marketing sites that are being run by cookie free alternatives to the tracking technology and proposed cookie method by the European Union will be hitting right at the bottom of the affiliate marketing. The technical method of storing information and the technical method of accessing the information will be covered under the proposed new law. The storing of the data is necessary to credit the affiliate marketing and involvement in sale. The commission of the affiliate marketing has to be done by sharing the basket values and this will be done using the cookies and tracking devices. The new law states that the websites will be forced to make a statement to the visitors whether they are interested in accepting the cookie and that means there will be fall in the revenue. There will be drop in search engine management and cookie based system will not be there to help the web sites to understand how well search engine is functioning. There will be alternative in the form of opt-in-message and that would help the lack of cookie based system. That was also trying to manage the accuracy of tracking. There would be a great threat to the concept of web analytics by the proposal from the European Union and that will be big blow to the web analytics. The reason for this that web analytics will be depending on the cookies and session values will be breaching the code of regulation under the proposed law. There will not be any problem for weblog analytics and that means the analysis of data not stored on the visitor’s computers. There is every chance that the accepting of the proposal will trigger the use of session variables in the URL parameters. That would be not limited to United Kingdom but across Europe as whole. (Admin, 2009)The advantage of using sessions will be allowing more data to be stored and tracking to be done. That will help the visitor not to leave the data on the user terminals. The proposed regulation will affect the functioning of the search engines and sessions will be affecting the search engines. Sites deploying sessions will be difficult on the search engine of Google, Yahoo and Microsoft search engine Bing.There will be new experience for the visitors who will be visiting the commercial sites once the new proposal comes into play. The display of pop up message asking for the permission of tracking from the visitor and that means tracking will be bought down. The new regulation will also have to consider the fact of pop up being blocked by browsers and that means the visitor should be willing to at least allow the pop up to be displayed. The loss of transactions if the new proposed regulation is met will be high and that can affect the companies along with the cost of implementation of the proposed changes to the cookie system. The proposed new regulation will be affecting the online retailers, travelers and finance sites more. http://www.out-law.com/page-10021 states that Article 5(3) shall be replaced by the following: “Member States shall ensure that the storing of information, or the gaining of access to information already stored, in the terminal equipment of a subscriber or user is only allowed on condition that the subscriber or user concerned has given his/her consent, having been provided with clear and comprehensive information, in accordance with Directive 95/46/EC, inter alia about the purposes of the processing. This shall not prevent any technical storage or access for the sole purpose of carrying out the transmission of a communication over an electronic communications network, or as strictly necessary in order for the provider of an information society service explicitly requested by the subscriber or user to provide the service.”(From http://www.out-law.com/page-10021.) The proposed law has been stated to be ambiguous and unless the cookie is essential, it will not be allowed by the new proposed regulation to the regulation 2003.There would be stopping of Google analytics. The initial plan was for implementing minor changes and the European commission as it found the changes were not enough for handling cookies and parliament had opted for amendment in the form of opts in consent for the usage of cookies in the web site. There were concerns that the private parties may be affected and that has led to the opt out cookie system. There is always a view that the cookie system is not affecting the security and it is only enhancing the user experience. The new proposed changes will be implementing only after discussion in September. Conclusion The fight against spam and cookie will be continuing as the years advances. There has been many view points about the usage of cookies and that has created the confusion among the law makers to have a strong impact on the cookie regulation. There has been debate about opt-in and opt-out cookies and there has been a proposed change to the 2003 regulation in European Union. The proposed amendment will be discussed in September and the outcome on the cookie will be known on that time. The internet and web site is becoming more secure conscious as people are becoming more health conscious. Reference admin,2009,"proposed cookie data laws could threaten online marketers",viewed on July 16,2009,retrieved from http://blog.wdsinternet.com/2009/06/16/proposed-cookie-data-laws-could-%E2%80%98threaten-online-marketers%E2%80%99/ Alan R. Simon, Steven L. Shaffer,2001,"How can information be collected”, Data warehousing and business intelligence for e-commerce,215-251. James Potter, 2008,"opt in cookie and opt out cookie”, Media literacy,374 Jonathan Reuvid, 2003,”regulations”, Secure online business handbook e-commerce, IT functionality, & business,65. Mauricio Arregoces, Maurizio Portolani,2004,"how servers teach changes”, Data center fundamentals ,736 "Proposed change to cookie laws" ,viewed on July 16,2009,retrieved from http://www.out-law.com/page-10021. Ryan Russell, Syngress Media, Inc, Teri Bidwell, L. Brent Huston, Oliver Steudler, Robin Walshaw, 2004,"configuartion of e-commerce",Hack proofing your e-commerce site,133 Rana Tassabehji, 2005,"main cookie", Applying e-commerce in business,88 Steve Hedley,2005"Data protection law”, The Law of Electronic Commerce and the Internet in the UK and Ireland,228 Read More