Internet Seals of Approval: Effects on Online Privacy Policies and Consumer Perceptions

Abstract

The use of Internet seal of approval programs has been touted recently as an alternative to potential legislation concerning consumer-related online privacy practices. Questions have been raised, however, regarding the effectiveness of such programs with respect to maintaining privacy standards and aiding online consumers. The authors examine these issues in a series of four studies, the first of which examines Internet seal of approval logo usage in the current marketplace. The next study applies Federal Trade Commission privacy standards to various online privacy policies in an effort to determine the ability of seal of approval program participation to act as a valid cue to a firm's state privacy practices. The last two studies are experiments designed to ascertain how online firm participation in Internet seal of approval programs affect consumers. Implications for policy and industry are also discussed.

Keywords: Privacy, Internet, Web, Marketing, Seal, Seal of Approval, TrustE, BBB, Federal Trade Commission, FTC, Experiment, Consumer