The Effectiveness of Privacy Policy Statements

Abstract

An expectation exists in the U.S.A. that operators of business-to-consumer (B2C) Web sites will provide public notice of their privacy and security practices in relation to the personal data that they hold. Such documents are referred to in this paper as Privacy Policy Statements (PPS). The use of PPS has become mainstream in many other countries as well. Privacy and security of personal data are important elements in consumer trust, and hence in a consumer‘s decision to make purchases using Internet commerce services. PPS could therefore be expected to play an important role in overcoming the impediments to consumer purchases online. This paper adds to the growing research literature on PPS by developing a research design involving comparison of an organisation’s PPS against a normative template developed on the basis of professional practice and laws, policies, practices, and public expectations around the world. A study of six B2C sites was undertaken, in order to assess the practicability of the design, and provide some initial substantive insight into the contributions that PPS currently make to consumer trust. It appears that many organisations’ PPS may be seriously inadequate, and hence may be more of an impediment to trust than an enabler of Web-commerce adoption.