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

Abstract

The use of Internet seal of approval programs has been touted 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 three studies, the first of which is an exploratory application of 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 stated privacy practices. The second and third studies are experiments designed to ascertain how online firm participation in Internet seal of approval programs affects consumers. Implications for consumer policy are discussed.