Business Law and the Legal Environment
Standard Edition 7th Edition by Beatty and Samuelson ISBN 1285860381 9781285860381
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1. The Internet was started in the 1960s as a project to link military contractors and universities. The World Wide Web was created as a subnetwork of the Internet.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom's: Knowledge
2. Spam is illegal per se.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom's: Knowledge
3. Jorgeson Co., on its website, promised the company would not give a customer's personal information to third parties without the customer’s consent, but then gave out such information anyway. This practice violates Section 5 of the FTC Act.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Moderate
KEYWORDS: Bloom's: Comprehension
4. The federal government has preempted the field of online privacy, so states may not pass their own online privacy statutes.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
KEYWORDS: Bloom's: Comprehension
5. When you surf the Internet, tracking tools collect information about you, often without your knowledge.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom's: Knowledge
6. Rachel works for the Internal Revenue Service, and keeps some personal information on her computer at work. There has been suspicion that Rachel has not been keeping tax return information confidential. The Fourth Amendment to the Constitution, prohibiting unreasonable searches and seizures, protects Rachel from having the government review the personal information she has on her computer.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
KEYWORDS: Bloom's: Application
7. The principle of net neutrality asserts that all information contained on the Internet should be regulated equally among each of the fifty states.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom's: Knowledge
8. Social media postings, wikis, customer reviews, and blogs are all examples of user-generated content.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom's: Knowledge
9. After Jan's boyfriend broke up with her, she posted unflattering pictures of him on her Facebook page and wrote about how he was a terrible boyfriend, calling him a liar and a cheater. Jan's actions are protected by the First Amendment to the Constitution.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Moderate
KEYWORDS: Bloom's: Application
10. The Electronic Communications Privacy Act of 1986 is a federal statute that regulates email.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom's: Knowledge
11. At its inception, the Communications Decency Act of 1996, created broad immunity for Internet service providers (ISPs) and websites.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom's: Knowledge
12. Section 5 of the FTC Act requires all websites to have a privacy policy.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom's: Knowledge
13. The European Union does not view privacy as a fundamental right of its citizens and the EU's policies toward privacy are limited.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Moderate
KEYWORDS: Bloom's: Comprehension
14. Under the ECPA, any intended recipient has the right to disclose the content of an email.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom's: Knowledge
15. At issue in Verizon v. Federal Communications Commission was the Open Internet Order and the treatment of ISPs as common carriers.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom's: Knowledge
16. Burns Medicine Shop developed a website where customers could ask the pharmacists questions and could refill prescriptions online. What statute requires Burns to have and disclose a privacy policy to anyone using the website?
a. The FTC Act
b. The Electronic Communications Privacy Act
c. The Fair Information Practices Act
d. No statutes presently require websites to have or disclose a privacy policy.
ANSWER: d
POINTS: 1
DIFFICULTY: Moderate
KEYWORDS: Bloom's: Comprehension
17. You make an online purchase of a hooded sweatshirt with the logo of the Dallas Cowboys. The next time you log on, your screen has a banner ad for Dallas Cowboy hats and shirts. This banner ad is most likely the result of
a. tracking software.
b. a coincidence.
c. the Internet crime of theft of private information.
d. encryption software.
ANSWER: a
POINTS: 1
DIFFICULTY: Moderate
KEYWORDS: Bloom's: Application
18. Which of the following is a true statement regarding the European Union’s Privacy Directive?
a. It requires an "opt-out" system under which tracking tools can be used unless the consumer specifically "optsout" of the program.
b. The directive establishes data protection for Europeans' commercial transactions that take place in EU member countries only.
c. It requires an "opt-in" system under which tracking tools cannot be used unless the consumer specifically grants permission for their use.
d. The directive does not recognize that privacy can exist in public places.
ANSWER: c
POINTS: 1
DIFFICULTY: Moderate
KEYWORDS: Bloom's: Evaluation
19. What is spam?
a. a form of tracking software
b. unsolicited commercial email
c. a federal statue regarding privacy
d. behavioral marketing regulations
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom's: Knowledge
20. The case of Carafano v. Metrosplash.com, Inc. held that
a. the Fourth Amendment applies to computers.
b. Congress, in enacting the Communications Decency Act, intended that ISPs should not be held liable for information provided by someone else.
c. Congress had weighed free speech interests with protection of the public from offensive or obscene materials and determined that protection of the public was more important in the Internet setting.
d. Matchmaker, because it had provided the questionnaires for collecting information from its users, must be considered an “information content provider” under the Communications Decency Act, and it is therefore liable under the Act.
ANSWER: b
POINTS: 1
DIFFICULTY: Moderate
KEYWORDS: Bloom's: Comprehension
21. The CAN-SPAM Act
a. applies to virtually all promotional e-mails, whether or not the sender has a pre-existing relationship with the recipient.
b. requires senders of promotional e-mails to offer an opt-in system to recipients.
c. requires recipients of unsolicited, pornographic e-mails to notify the Justice Department.
d. requires senders of promotional e-mails to provide a valid return address, which may be a post office box or a specific physical location.
ANSWER: a
POINTS: 1
DIFFICULTY: Moderate
KEYWORDS: Bloom's: Comprehension
22. The Children's Online Privacy Protection Act prohibits Internet operators from collecting information from children under what age without parental permission?
a. 18
b. 16
c. 13
d. 10
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom's: Knowledge
23. Sherry, a 12-year-old, visited a website that wanted to know her family size, her parents' educational level, and her weekly allowance. The site also asked Sherry's name, mailing and e-mail addresses, and age.
a. Under COPPA, the website must disclose how it will use the information it acquires from Sherry.
b. COPPA prohibits the Internet operator from collecting such information under any circumstances.
c. COPPA does not apply to Sherry's situation since she is over the age limit for those protected by the statute.
d. Under COPPA, the website may only collect information about Sherry's name and e-mail address.
ANSWER: a
POINTS: 1
DIFFICULTY: Moderate
KEYWORDS: Bloom's: Evaluation
24. The Children's Online Privacy Protection Act
a. deals only with the collection of data that will be disclosed to children.
b. restricts the use of social media sites by children.
c. regulates the activities of Internet operators with regard to collecting information from children.
d. is enforced by the EEOC.
ANSWER: c
POINTS: 1
DIFFICULTY: Moderate
KEYWORDS: Bloom's: Comprehension
25.
Which of the following statues requires that commercial email not have deceptive headings and clearly indicate if the email is an advertisement?
a. the FCC's Open Internet Order
b. CDA of 1996
c. Section 5 the FTC Act.
d. CAN-SPAM
ANSWER: d
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom's: Knowledge
26. The public disclosure tort requires the plaintiff to show all of the following EXCEPT
a. the defendant divulged secret information to a number of people, not just one person.
b. the disclosed facts had been private.
c. the disclosed facts were a legitimate concern to the public.
d. the disclosure is highly offensive to a reasonable person.
ANSWER: c
POINTS: 1
DIFFICULTY: Moderate
KEYWORDS: Bloom's: Comprehension
27. What is net neutrality?
a. the notion that federal government remain a neutral party in deciding privacy law cases regarding the Internet
b. the principle that Internet service providers (ISPs) should not remain neutral in determining how information should flow on the Internet
c. the notion that the First and Fourth Amendments should not be used in determining citizens' privacy rights regarding the Internet.
d. the principle that all information which flows on the Internet must receive equal treatment.
ANSWER: d
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom's: Knowledge
28. Which of the following protects e-mail messages from unauthorized interception?
a. CAN-SPAM
b. FIPS
c. ECPA
d. COPPA
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom's: Knowledge
29. Which of the following regulates deceptive practices regarding a company's privacy policy?
a. Section 5 of the FTC Act
b. the federal COPPA
c. the federal ECPA
d. the FCC's privacy directive
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom's: Knowledge
30. Emily, an 11-year-old girl, wants to sign-up for a fashion newsletter and sweepstakes. In order to do so, the website wants to know Emily's name, address, phone number, and e-mail address. Which of the following is correct?
a. Emily must have permission from her parents in order to furnish the information to the website.
b. Under the Children's Online Privacy Protection Act, the website cannot collect any of this information from Emily, even if her parents give her permission.
c. Under Section 5 of the FTC Act, the website is protected from disciplinary action if Emily provides the requested information.
d. The Electronic Communications Privacy Act will allow the website to collect Emily's information, but restricts the website from sharing the information with other firms.
ANSWER: a
POINTS: 1
DIFFICULTY: Moderate
KEYWORDS: Bloom's: Application
31. Under the Electronic Communications Privacy Act
a. violators are subject to both criminal and civil penalties.
b. violators may be subject to civil, but not criminal, penalties.
c. only the unauthorized disclosure of e-mail messages constitutes a violation.
d. only the unauthorized interception of e-mail messages by the government or an ISP constitutes a violation.
ANSWER: a
POINTS: 1
DIFFICULTY: Moderate
KEYWORDS: Bloom's: Comprehension
32. Which of the following is NOT true under the Electronic Communications Privacy Act?
a. An intended recipient of an e-mail has the right to disclose it to third persons.
b. ISPs are prohibited from disclosing the content of electronic messages to anyone other than the addressee, even if the disclosure is necessary for the performance of the ISP's service.
c. An employer has the right to monitor workers' e-mail if the monitoring occurs in the ordinary course of business.
d. An employer has the right to monitor workers' e-mail if the employer provides the computer system.
ANSWER: b
POINTS: 1
DIFFICULTY: Moderate
KEYWORDS: Bloom's: Comprehension
33. Which of the following statements regarding the Foreign Intelligence Surveillance Act (FISA) is true?
a. To spy on people located in the United States who are communicating abroad, the government needs a warrant.
b. FISA was enacted in 1978, but its provisions were greatly strengthened in the aftermath of the 9/11 terrorist attacks.
c. Under the FISA, the government does not need to notify defendants if the evidence being used against them in court was gathered in FISA surveillance.
d. To spy on people located in the United States who are communicating abroad, the government must obtain permission from a secret Foreign Intelligence Surveillance Court.
ANSWER: d
POINTS: 1
DIFFICULTY: Moderate
KEYWORDS: Bloom's: Comprehension
34. The practice of inferring needs and preferences from a consumer's online behavior and then targeting related advertisements to them is referred to as
a. data mining.
b. behavioral marketing.
c. Internet tracking.
d. targeted selling.
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom's: Knowledge
35. Which of the following is NOT a core principle of the Fair Information Practices (FIPS)?
a. Notice/Awareness
b. Choice/Consent
c. Privacy/Refusal
d. Access/Participation
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom's: Knowledge
36. Which statement regarding FIPS is true?
a. FIPS are only recommendations, not law.
b. FIPS originated from the Department of Justice.
c. FIPS has been ineffective in shaping privacy policies.
d. FIPS was established after the 9/11 terrorist attacks.
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom's: Comprehension
37. Under what circumstances is intrusion into someone's private life a tort?
a. under all circumstances based on the Fourth Amendment
b. if a reasonable person would find it offensive
c. only if it conflicts with the First Amendment
d. only if the intrusion had been made public
ANSWER: b
POINTS: 1
DIFFICULTY: Moderate
KEYWORDS: Bloom's: Comprehension
38. Unsolicited commercial e-mail (UCE) or unsolicited bulk e-mail (UBE) messages
a. are commonly known as "cookies."
b. constitute about 90 percent of all e-mail.
c. are estimated to be fraudulent either in content or packaging in approximately one-fourth of all cases.
d. although annoying, do lower the cost of connecting to the Internet.
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom's: Knowledge
39. Musical Productions has a privacy policy posted on its website but it does not follow the provisions contained within it. Musical Productions is in violation of
a. the CAN-SPAM Act.
b. the Communication Decency Act.
c. Section 5 of the FTC Act.
d. the Electronic Communications Privacy Act.
ANSWER: c
POINTS: 1
DIFFICULTY: Moderate
KEYWORDS: Bloom's: Application
40. As it pertains to the Electronic Communications Privacy Act, all of the following are considered electronic communication EXCEPT
a. websites
b. email
c. cell phones
d. social media
ANSWER: a
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom's: Knowledge
41. Stuart is vying for a promotion, but faces competition from a co-worker, Brenda. Without authorization, Stuart accesses stored company records and discovers an unfavorable e-mail message Brenda had written about the company. Stuart sends the message to his supervisor in hopes of keeping Brenda from getting the promotion. Discuss whether Stuart has violated any statute and, if so, what sanctions he may face.
ANSWER: Stuart violated the Electronic Communications Privacy Act. This is a federal statute prohibiting unauthorized interception or disclosure of wire and electronic communications or unauthorized access to stored communications. The Act applies to electronic communication from email, cell phones, and social media. Stuart may be subject to both criminal and civil penalties for violating the Act.
POINTS: 1
DIFFICULTY: Challenging
KEYWORDS: Bloom's: Analysis
42. Daniel went onto an Internet message board and found that his ex-wife, Faye, had posted a message calling him a fat, insensitive jerk who only cared about watching sports on TV. Does Daniel have any protection against Faye’s making such statements to a potentially large number of readers, some of whom may know Daniel and some of whom may not?
ANSWER: Faye’s postings have First Amendment protection of free speech, as long as Fay does not commit defamation. Courts have tended to find that such statements are opinion, not fact, and therefore are protected speech. The fact that a statement may be offensive is not reason enough to suppress it.
POINTS: 1
DIFFICULTY: Challenging
KEYWORDS: Bloom's: Analysis
43. Explain the core principles in the Code of Fair Information Practices.
ANSWER: There are four core principles of the FIPS. They are:
• Notice/Awareness. Notice should be given before any personal information is collected.
• Choice/Consent. People should be able to control the use and destination of their information.
• Access/Participation. People should have the ability to view, correct, or amend any personally identifiable record about them.
• Integrity/Security. Information collectors must take reasonable precautions to ensure that the data they collect are accurate and secure.
POINTS: 1
DIFFICULTY: Moderate
KEYWORDS: Bloom's: Comprehension
44. Explain data mining, how it takes place, and how it relates to behavioral marketing.
ANSWER: Websites install tracking tools on the computers of people who visit their sites. These tools not only collect data on all the websites someone visits, but they also record keystrokes to keep track of whatever information the consumer has entered online. These tools are placed on computers without notice or warning to the consumer. In a process called data mining, these websites utilize the information they collect to find out information about those customers. Data mining leads to behavioral marketing, also known as behavioral targeting. Behavioral marketing is a widespread practice that involves inferring needs and preferences from a consumer’s online behavior and then targeting related advertisements to them. The most troubling aspect of massive information collection is that consumers are often unaware of who has access to what personal information, how it is being used, and with what consequences.
POINTS: 1
DIFFICULTY: Challenging
KEYWORDS: Bloom's: Comprehension
45. What provisions is commercial email subjected to under the CAN-SPAM Act?
ANSWER: Under the CAN-SPAM Act, commercial email:
• May not have deceptive headings (From, To, Reply To, Subject)
• Must offer an opt-out system permitting the recipient to unsubscribe (and must honor those requests promptly)
• Must clearly indicate that the email is an advertisement
• Must provide a valid physical return address (not a post office box) and
• Must clearly indicate the nature of pornographic messages
POINTS: 1
DIFFICULTY: Moderate
KEYWORDS: Bloom's: Comprehension
