Studies show that consumers care about the perceived honesty and values of brands and companies. They want to trust that companies will do the right thing with any and all data collected on line. This raises a number of interesting and difficult problems. The panelists first examine what exactly we mean by trust, privacy, transparency, security and fraud. One thorny issue is the inherent asymmetry of information. Consumers can't always tell when they are revealing information to companies, and they can't always know how the companies may use that data. They often assume security laws protect them when they don't.
While consumers vary in the level of trust they will give on line, certain companies do seem to develop a good reputation. What are the secrets? And, what is this trust worth? The panelists review studies of on line behavior and note that there can be a gap between consumers' stated attitudes and their actual behavior. Still, security breaches, identity theft and privacy abuses can harm a brand's reputation.
Some new tools for managing trust are emerging on social networking and e-commerce sites. eBay seller ratings and friend-of-a-friend recommendations are examples. There's an arguement to be made for giving users maximal control over their own data. Still, this is not fool proof since often users don't take the time to read service agreements and tend to accept default settings. There are also generational, and perhaps maturational, differences in user expectations.
The panel closes with thoughts on how business, consumer advocates, the press and government might work together through legislation and consumer education to foster trust on line.
Lise Buyer is the founding Principal of the Class V Group, an organization providing public market strategy and logistical guidance to public companies and those contemplating initial public offerings. Immediately prior to Class V, she was the Vice President of Strategic Partnerships for Tellme Networks, a private company operating at the intersection of the Internet and the telecommunications industries. Prior to that, Ms. Buyer was the Director of Business Optimization for Google Inc. where she was one of the chief architects of the company’s innovative IPO. Previously, she was the Director of the Internet/New Media research practice for Credit Suisse First Boston. Ms. Buyer came to investment banking as an institutional investor from T. Rowe Price Associates, where she was responsible for the firm’s investments in desktop technology and a principle investor for the Science and Technology fund. She holds a BA from Wellesley College and an MBA from Vanderbilt University’s Owen School as an Owen School Scholar. She is a Chartered Financial Analyst, a past Fellow of the Davos World Economic Forum, a Director of Greenfield Online (Nasdaq: SRVY) and a Trustee of The Nichols School.
Fran Maier is the Executive Director and President of TRUSTe, the leading brand in online privacy. Ms. Maier brings 15+ years of experience building consumer brands and enhancing consumer trust. Since Ms. Maier joined TRUSTe in 2001, the independent, non-profit organization has evolved to expand consumer choice from websites to email and most recently consumer downloadable software. TRUSTe has strengthened its monitoring and dispute resolution activities while certifying more than 2000 websites including leading brands such as Yahoo!, MSN, eBay, AOL, Nestle, Symantec, the NFL, and intercontinental Hotel Group. TRUSTe has experienced consistent annual double-digit budget growth under her leadership. Ms. Maier speaks widely on the issues of privacy, security, and trust, has appeared before the Federal Trade Commission and the U.S. Department of Commerce, and has testified twice before the United States House of Representative’s Subcommittee on Commerce, Trade, and Consumer Protection.
Alessandro Acquisti is an Assistant Professor of Information Technology and Public Policy at the H. John Heinz III School of Public Policy and Management, Carnegie Mellon University, and a member of Carnegie Mellon Cylab. His work investigates the economic and social impact of IT, and in particular the interaction and interconnection of human and artificial agents in highly networked information economies. His current research focuses primarily on the economics of privacy and information security, but also on the economics of computers and AI, agents economics, computational economics, e-commerce, cryptography, anonymity, and electronic voting. Prior to joining the CMU faculty, Alessandro Acquisti researched at the Xerox PARC labs in Palo Alto, CA, and for two years at RIACS, NASA Ames Research Center, in Mountain View, CA. At RIACS, he worked on agent-based simulations of human-robot interaction onboard the International Space Station. In 2000, he co-founded PGuardian Technologies, Inc., an Internet provider.
Chris Jay Hoofnagle is senior staff attorney to the Samuelson Law, Technology & Public Policy Clinic and senior fellow with the Berkeley Center for Law & Technology. His focus is consumer privacy law. From 2000 to 2006, he was senior counsel to the Electronic Privacy Information Center (EPIC) and director of the organization’s West Coast office. At EPIC, he concentrated on financial services privacy, telemarketing regulation and consumer profiling. He was also a non-residential fellow with Stanford University’s Center for Internet and Society for the 2005 academic year. His most recent article is “Identity Theft: Making the Known Unknowns Known,” forthcoming in the Harvard Journal of Law and Technology. He is admitted to practice law in California and the District of Columbia.
This free podcast is from our Trust Online series.