TRUSTe is out to woo marketers and media companies to use the Internet equivalent of the Good Housekeeping Seal of Approval.
Sites that pay between $500 and $5,000 to participate (based on annual revenues) can display TRUSTe labels that describe how they treat personal data collected via registration forms.
However, some concerns remain among privacy pundits and advertisers about the extent to which consumer information is really protected.
TRUSTe, formerly known as eTRUST and formed last October by CommerceNet and the Electronic Frontier Foundation, has a mandate to promote electronic commerce by addressing privacy concerns among the online public.
"Privacy is one of the biggest impediments to electronic commerce, right behind security on most surveys," said Ira Machefsky, VP of Giga Information Group. "I think the eTRUST initiative is an important one because issues of what happens to information [online] is of growing concern to individuals."
In fact, a recent study by Boston Consulting Group shows consumers hold businesses on the Net to a higher standard of privacy than real-world businesses.
"I think this has to do with the fact that the Internet is mostly a visual, one-way medium," said Susan Scott, executive director of TRUSTe. "When you go into a store, you are subconsciously using all of your senses to determine whether you trust the place ... On the Net, basically a small, one-person business and a big, well-known company look exactly the same to the consumer."
TRUSTe would evaluate sites' privacy policies based on data sites volunteer as well as through personal interviews with Web sites.
The sites would then be assigned to one of three categories: "no exchange," where no personal user data is collected; "1to1 exchange," where the sites collect user data for their own purposes but do not share them with third parties; and "3rd party exchange," where sites share the information with others.
"1to1 exchange" sites would be permitted to share user data--such as credit card numbers, names and addresses--with business partners in order to complete transactions as long as the business partners agreed not to collect the user data themselves, Ms. Scott said.
Participating sites will also be subjected to random audits.
At launch, about 50 companies are participating in the program, including Excite, Four11 and America Online. Nine have signed on as "premier partner" sponsors, contributing $100,000 each, including AT&T Corp. and Netscape Communications Corp. Some, however, question the organization's category definitions.
John Nardone, managing director of Modem Media, New York, said he understood the "no exchange" label to mean sites could not employ cookies to collect data from users' clickstream behavior, such as observing what pages in the site they visit, even if no personal data about the visitor are known.
Ms. Scott said such anonymous cookies would indeed be acceptable under the "no exchange" label, "as long as no personal information, such as the user's name, was collected." She added eTRUST was currently updating its definitions.
Copyright June 1997, Crain Communications Inc.