overview

This profile is under development. It provides a basic inventory of online privacy seals and other trustmarks, discussed in our Privacy and Consumers guides.

     marks in space

Who can you trust in cyberspace, where the facade presented by deft software does not necessarily equate to good performance, where many consumers feel that they are unequipped to use tools such as P3P and where the borderless nature of the net (or merely its newness) has encouraged bad practice by entrepreneurs or malicious individuals.

The discussion, in our Consumers guide, of trust suggests that businesses, governments, consumer advocacy organisations and individuals have some interest in online trustmarks. At its simplest, an online mark (sometimes characterised as a seal) is an indicator that the site operator has agreed to be bound by a code of practice. The mark is an advisory, rather than a guarantee of performance, since the binding is often weak and certification problematic.

The marks are issued by industry associations and consumer bodies (generally on a less-than-cost or cost recovery basis) or by commercial entities whose raison d'etre is to generate profits through conduct of a trustmark program and ancillary services such as legal compliance audits and training.

Given different jurisdictions with different markets, perceived needs and start-up funding there are a range of marks in Australia and elsewhere. Some are purely local. Others, such as the ICRA content label, are found across the world. Some have a narrow focus, for example on privacy. Others attempt to serve as an indication of business good practice (for example covering data collection, handling of disputes, fulfillment of commercial transactions). Varying levels of enforcement mean that some marks, at best, are statements of aspiration whereas others are perceived to be more meaningful because the issuer has the resources - and will - to effectively police the mark.

     responses

Responses to online marks - and particular seals - have been mixed. Some observers, for example, have criticised the process through which mark are acquired, in particular schemes based on self-assessment. Critics argue that self-assessment is inherently open to abuse by the unscrupulous or merely incompetent.

Some note the poor performance of certifying bodies, including prominent seal issuers such as TRUSTe, characterised as slow to respond to consumer concerns about abuses or lacking the resources to monitor compliance with their rules and ensure that the trustmark is removed from a site that breaches those rules. One example is Natalie Regoli's 2002 Indecent Exposures in an Electronic Regime paper (PDF).

Others question whether commercial trustmark schemes necessarily involve a conflict of interest or simply doubt a business model that requires significant investment for building a national/global brand and then maintaining it through ongoing promotion, compliance checks and litigation against entities that abuse the particular mark.

Still others note the plethora of competing trustmark bodies, ranging from those restricted to a particular jurisdiction to those with global ambitions, a presence in all major markets and compliance infrastructure to match.

     trusting the mark

A recurrent response by consumers (and by site operators) is that they are either not aware of particular marks or question their effectiveness. In essence, many people do not trust marks and instead rely on an assessment (informed or otherwise) of a site, recognition of an offline/online brand and decisions about what is at stake.

Users of online trustmarks must

• recognise the mark
• perceive that the mark has value
• understand what it means
• believe that the site operator will comply with obligations regarding that mark
• believe that the entity that issued the mark to the operator will act quickly, vigorously, equitably and effectively to address actual/alleged breaches of its rules, implicitly to serve consumers rather than an individual site and thereby ensure the mark's legitimacy.

Perceptions play a major role in trust. Perceptions that mark issuers have been slow to act, have tacitly ignored substantive breaches or have provided site operators with inappropriate wriggle-room (eg redefined the problem) accordingly mean that building trust in marks is difficult.

In the absence of showcase litigation and an investment of significant funds for marketing/compliance activity the longterm viability of several marks is poor, as they have not

• gained substantial endorsement by regulatory bodies
• secured a significant market share among retailers, service providers and other commercial entities
• established appropriate credibility among a sufficiently large number of consumers (whether individuals or businesses), either in differentiation from competitors or for trustmarks per se
• grown enough to enjoy economies of scale in marketing and administration

A perspective is provided in Web Seals: A Review of Online Privacy Programs, a 2000 report by the Office of the Information & Privacy Commissioner in Ontario and the Australian Federal Privacy Commissioner. For a vision, which we find unconvincing, that consumers will embrace trustmarks and then seek "lovemarks" see the interview with Saatchi & Saatchi's Kevin Roberts.

     the trustmark industry

The following page provides a very basic inventory of some trustmark initiatives.

Broadly they fall into two categories -

• marks under the auspices of industry or other associations
• marks that have a wholly commercial basis

Comprehensive statistics about the 'trustmark industry' in Australia and overseas are not available. It would appear that commercial trustmark businesses are increasingly emphasising the provision of ancillary services, such as privacy audits and training, rather than expecting to generate most of their revenue through fees for application of the mark. Several commercial mark services in the EU and North America shut up shop or failed to proceed after the 1990s dot com slump reduced the availability of risk finance and the market for their services.

It is unclear whether there will be a significant revival, although increased national and multilateral regulation of e-commerce (and progressive strengthening of privacy legislation) suggests that few entrants will secure the significant funding needed to market and maintain a new mark in an environment where consumers rely on government rather than for-profit trustmark schemes.



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