Copyright 2000 Gannett Company, Inc.
USA TODAY
July 24, 2000, Monday, FINAL EDITION
SECTION: MONEY; Pg. 5B
LENGTH: 866 words
HEADLINE:
Online privacy still a hot-button issue Seal plans have advocates, critics
BYLINE: Michelle Kessler
BODY:
When Toysmart.com, a now-defunct online retailer, tried to sell
its
customer list and database in bankruptcy proceedings earlier
this year, only
one small privacy organization noticed.
TRUSTe objected because
Toysmart had displayed the TRUSTe seal
of approval on its site, promising
customers that it had a good
privacy policy and would abide by it. TRUSTe
tipped the Federal
Trade Commission, which filed a lawsuit against Toysmart
to stop
the sale of customer data. Friday, the FTC and Toysmart reached
a settlement, which a federal bankruptcy court is expected to
approve
Wednesday.
But TRUSTe's success in protecting Toysmart's customers
hasn't
prevented critics from arguing that its little green seal represents
corporate greed more than good privacy policies.
"Seal programs like
TRUSTe provide a false sense of security
for the online world," says Joel
Reidenberg, an online privacy
expert and Fordham University law professor.
In theory, sites that display a green TRUSTe seal are announcing
their intention to manage users' data responsibly. But several
interest
groups charge that the non-profit site's close ties to
the industry
(Microsoft and America Online are among its sponsors)
make the seals
meaningless. Others say that the organization has
no means to enforce its
policies. And several competing groups
are offering their own seal programs,
making it more difficult
for consumers to know what an approval stamp means.
TRUSTe's 19 employees, however, say they're too busy trying to
make a difference to pay much attention to the debate. "I think
what has
perhaps been overlooked is the good job that we've done,"
says Bob Lewin,
TRUSTe's CEO.
The staff speaks in broad terms about how they are
holding the
Net accountable for consumers' privacy. They spend their days
auditing Web sites' policies, helping them resolve problems and
handling
inquiries from users -- including the one that lead to
the Toysmart lawsuit.
When it began in 1997, TRUSTe would award a seal to any Web site
that posted a privacy policy and stuck to it. Today, sites that
bear the
seal must promise to give consumers notice about how
their information is to
be used, control of their information,
enough security to prevent leaks and
a forum to settle disputes.
They are allowed to sell information or share it
with third parties
as long as their intentions are spelled out in their
privacy policy.
"It underscores that the business has considered the
issue,"
says Chris Kelly, chief privacy officer for Excite At Home, a
TRUSTe member.
A study performed by Forrester Research last year
revealed that
67% of consumers are "extremely" or "very" concerned about
releasing personal information online, and almost half this group
refuses to make online purchases because of their reservations.
Last year, TRUSTe was attacked for its unwillingness to censure
members Microsoft and RealNetworks, which were gathering data
that could
be misused through their software.
In both cases, TRUSTe did not
revoke the seal because software
is not covered under its policy. The
organization is currently
reviewing its guidelines.
Some see the
Toysmart lawsuit as a chance for TRUSTe to redeem
itself. Privacy advocates,
however, argue that taking on a bankrupt
company is hardly a commendable
act. TRUSTe is too beholden to
its sponsors and 1,900 paying members, they
say, and point out
that TRUSTe has never revoked a seal -- its only recourse
against
offenders other than a breach of contract lawsuit -- for failure
to comply with its regulations.
"TRUSTe seems to us very
reluctant to pose penalties on its own
members," says Marc Rotenberg,
executive director of the Electronic
Privacy Information Center and vocal
TRUSTe critic.
Only 8% of Web sites randomly selected by a recent
Federal Trade
Commission study displayed a privacy seal.
Lawmakers are questioning whether industry self-regulation is
working, and many are proposing privacy legislation.
In the
meantime, TRUSTe and programs like it -- including the
Better Business
Bureaus' BBBOnLine, PricewaterhouseCoopers' BetterWeb
and the American
Institute of Certified Public Accountants' CPA
WebTrust -- are growing.
"There is enough work to go around for all of us," says Gary
Laden, director of BBBOnLine.
TRUSTe is in the process of
launching an aggressive initiative
to let more consumers know what its seal
means and distinguish
itself from competitors.
"I want to . . .
make sure that everyone understands what
we're trying to do here," says
Henry Alexander, TRUSTe's manager
of client operations. "TRUSTe is gonna
change the world."
Sites' privacy policies
Only
about 8% of Web sites randomly selected by the Federal Trade
Commission
carry a seal indicating their commitment to protect
consumer
privacy. Of sites that collect personal
identifying information,
the percent that:
64%
Post a privacy policy
55% State that they take
steps to ensure security of that information
50% Give consumers a
choice about how that information is used
43% Allow consumers to
review, correct or delete information
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LOAD-DATE: July 24, 2000
