Online privacy is an issue of increasing national importance, and voluntary privacy seals provided by third-party organizations such as TRUSTe and BBBOnline have been proposed as a means of assuring consumer privacy. Few studies have examined privacy seal effects. This study presents results of an online experiment that evaluated consumer response to privacy seals in a naturalistic exposure setting. Findings suggest that privacy seals enhance trust in the Web site and expectations that the site would inform the user of its information practices. While concern for privacy-threatening information practices had no influence, privacy self-efficacy, confidence in ability to protect one's privacy, moderated seal effects. Implications for the continued role of privacy seals are discussed.
Online consumer privacy has attracted the attention of state and federal regulators and poses a significant challenge to online marketers. Concerns for the confidentiality of personal information are widespread (Cole 2001; NTIA 2000; Pew Research 2000). However, 64% of adult consumers report never seeking out instructions on how to protect one's personal information on the Internet, and 40% report knowing almost nothing about how to prevent Web sites from collecting their information (Turow 2003).
Three-fourths of nonusers see the Internet as a privacy threat (Cole 2001), suggesting that online privacy invasion is a deterrent to potential Internet shoppers as well. Privacy threats may lower participation in commercial activities online and are of particular concern to new users and women (Pew Research 2000), thereby limiting the growth potential of online commerce. The debate is not merely academic since the release of consumer credit information can transform Internet users into victims of credit card and other financial fraud. A content analysis of leading e-commerce sites by the Federal Trade Commission (FTC) found that only 20% met the agency's standards for preserving consumer privacy (FTC 2000), and more recently, violations of online privacy policies have been unveiled.
To date, little research has examined consumer response to privacy seals. Notably, Miyazaki and Krishnamurthy (2002) examined the effects of privacy seal presence, in off-line conditions, with clearly stated privacy policies. Their findings suggest that seals may have the effects desired by online retailers but pose a problem for true consumer protection. Participants had more favorable perceptions of privacy policies at Web sites that displayed seals, and seals increased anticipated disclosures and patronage for individuals who viewed online shopping as risky. The results are discouraging for consumer protection since Miyazaki and Krishnamurthy (2002) also found no differences in the privacy policies of Web sites on the basis of seal display. More recently, LaRose and Rifon (forthcoming) found that sealed sites were significantly more invasive than the unsealed sites with respect to the amount of personal information requested.