Privacy seal

Companies pay an annual fee (usually ranging from a few hundred to several thousand U.S. dollars) to have an image of the third party provider's seal pasted onto their homepage or privacy policy page.

[2] While all web assurance seal services follow the guidelines set by the Federal Trade Commission, some providers may have additional requirements.

American based privacy seal companies make a pivot toward the broader field of reliability assurance and complaint resolution in the European marketplace.

[6][4] Privacy seals also have a major presence in the accounting industry of Canada and in general e-commerce in Japan and South Korea.

[8] Except for Federal Trade Commission guidelines, first established in a 1999 report, privacy protection is mainly self-regulated in the United States.

[6] Self regulators argue that governmental intervention would harm e-commerce because its inflexibility does not allow for each company to experiment with their policies and disclosures.

They believe that legislative practices are too slow and bureaucratic to be effectual; this makes regulations more burdensome than helpful in e-commerce.

This relation between a consumer's perception of a company's website and their intention to purchase is the cornerstone of privacy seals.

[6] They note the conflict resolution and investigative aspect of privacy seal programs, but state that they have limited power to redress the situation.

[5] Even without governmental or financial threats, e-commerce companies still adopt policies and practices of privacy protection and disclosure.

This is despite no general federal or state law requiring them – there are slight overlaps in the case of protecting health information or children.

Studies in the past have looked at the effectiveness of privacy in general e-commerce, as well as in specific categories like loan providers, travel booking, and online bookstores.

[4] A study conducted by Mai et al. examined online stores that sold e-books, textbooks, and audiobooks found that websites with privacy seals are able to charge a price premium because customers are willing to pay more if the website is deemed "safer" (via privacy seals) by them.

[12] Kimery et al. found in their study that privacy seals only had a slightly positive impact on trust where unfamiliar e-commerce retailers were concerned.

[13] This means that well-known brick and mortar companies may after consideration decide that privacy seals are not worthwhile.

A brick and mortar store that has established trust with consumers would be unlikely to build a website that would jeopardize that relationship.

Sheng et al. used eye tracking in their experiments to determine what draws consumers' attentions and the amount of information retained.

Research by Miyazaki et al. has compared perceived risk in e-commerce to other forms of shopping, more specifically mail order and purchases made by telephone.

They found that consumers perceive online shopping as more dangerous than these other methods, but privacy seals are effective in mitigating concerns.

In the case of the WebTrust privacy seal program which is a joint venture between the U.S. and Canada, a study was done to determine the cause of its slow growth.

Similarly, websites pertaining to homework assistance, dating, and medication also received high rates of attention to privacy practices.

[6] Seal programs in Europe make their main focus reliability of a specific sector rather than privacy protection because the European Union (EU) already has regulations in place.

[6] U.S. company, ePublicEye, partnered with France's eBuyClub in 1999 to rate the reliability of shopping websites – they expanded in 2000 to include Germany and Spain.

[6] Prior to the European Union's passage of Directive 95/46/EC, data protection laws were enacted on an individual (country) basis.

[4] The European Union has strict regulations for privacy unlike the United States and also needs to ensure the compliance of multiple countries rather than just one.

[4] EuroPrise (started in 2003) is an EU funded project which serves as the main privacy seal service in Europe.

[21] The study's two surveys (one based in each country) revealed that privacy seals did not significantly influence South Korean shopper's intent to purchase or their concerns.

[4] Starting in April 1998, the Japan Information Processing Development Center (JIPDEC) has been managing the PrivacyMark program.

[4] Ten years prior, JIPDEC published their "Guidelines for personal data protection in the private sector".

[4] In 2008, JIPDEC created a mutual recognition program in China in partnership with Dalian Software Industry Association (DSIA).