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WHAT ARE WEB SEALS?
Web seals are accreditation schemes established to promote good online practices and/or to target specific problems perceived to hinder consumer confidence in engaging in the online world. Not all web seals are designed to encourage fair online trading, for example "Bobby Approved" means that a site has identified and addressed significant barriers to access by individuals with disabilities.
Web seals are one of a range of self-regulatory mechanisms designed to enhance consumer confidence in the online world. Other mechanisms include the establishment of online marketplaces by well-known organisations such as Yahoo!, technological developments to ensure secure transactions and the development of fraud and delivery protection schemes. Some of these mechanisms are discussed further in Part 2 of this series of articles. Potentially, web seals can play a role in enhancing consumer confidence by raising awareness of, and encouraging compliance with consumer protection laws and best practice principles.
Web seals can signal to consumers that the online business adheres to certain standards of service and reliability. This may be particularly important in cross border transactions where consumers are not generally familiar with local laws or means of resolving disputes.
For businesses without an existing reputation or "brand", being a member of a web seal program arguably facilitates competition with better-known traders. This might also apply to established local web traders looking to expand into overseas markets. In practice, web seals vary tremendously in terms of purpose, governance and standards. Some seal schemes have been specifically developed for the online world, other schemes have had their origin in offline industry self-regulatory schemes and have subsequently migrated online.
Figure 1 exemplifies the variation in web seals. Some seals like TRUSTe and VeriSign are single purpose seals dealing with privacy and security issues respectively. Other seals such as BBBOnLine are more comprehensive covering business reliability, security and privacy issues. Some seals such as Which Web Trader were set up specifically as an online accreditation scheme while others such as the New Zealand Electronic Marketing Standards Authority "Trustmark" appear to be essentially existing industry based self-regulatory schemes which have migrated to the online world. In doing so, they have expanded existing codes of practice to adopt standards advocated in the OECD Guidelines for Consumer Protection in the Context of Electronic Commerce (December 1999).
Similarly, the Australian Direct Marketing Association have adopted within their Direct Marketing Code of Practice standards advocated within Building Consumer Sovereignty in Electronic Commerce: A Best Practice Model for Business (BPM). Just as the purpose and scope of seals varies, so too do their governance arrangements. Some seals are industry led, for example BBBOnLine; others are operated by consumers' organisations such as CaseTrust (Singapore); still others are co-regulatory such as the Austrian E-commerce Quality Mark and TrustUK.
Web seals also vary in their assessment, monitoring and preparedness to impose sanctions for breach of standards. For example, there have been several high profile breaches of TRUSTe standards by GeoCities, RealNetworks and Microsoft with no removal of the TRUSTe seal of approval. Critics have blamed this inaction on TRUSTe's funding structure: "If TRUSTe were to start suspending trustmarks, it would lose revenue; if it were to get a reputation for being too aggressive to clients, they might decide they are better off without a trustmark and attendant hassle" Which Web Trader, on the other hand, appeared to be more vigilant regarding its scrutiny of traders. Since its inception in 1999, of over 8,000 traders that applied for accreditation, only 2,700 were allowed to display the Which Logo on their websites.
Figure 1
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