Would Regulation of Web Site Privacy Policy Statements Increase Consumer Trust?

Abstract

Proponents of e-commerce have known for some time that limited participation by consumers partially reflects their concern over the privacy of personal information. To address consumer concerns, web site operators have employed security mechanisms, including privacy policy statements to increase their perceived trustworthiness. While empirical evidence is limited, there is some question regarding the ability of privacy policy statements to engender significantly greater levels of trust. The limited effectiveness of such statements may reflect their voluntary implementation, self-enforcement, and\or significant variance (protection and enforcement) from one web site to another. One possible remedy would be the imposition of legally mandated statements. This study examined the efficacy of legally mandated privacy policies vis-a-vis both voluntary statements of varying degrees of protection and the absence of any such statement. The results were mixed, as legally mandated privacy policy statements were found to be comparable to strong voluntary statements, but superior to none, weak or moderate policies. Perhaps more important, the nature of the privacy policy statement interacted with type of information requested.