Study: Trustmarks Provision in Europe

Luca Alessandro RemottiIntrasoft International

The Trustmarks Study• Elaborate the issue of confidence towards cross-border e-commerce:

which are the tools available to overcome trust barriers?• Survey trustmark providers in Europe, US and other relevant

markets• Online and off-line trustmarks classification. Operational, technical

and regulatory features and verification/certification policies• Assessment of the impact of trustmarks on the consumers and on

merchants: the effect on cross-border eCommerce• Provide input to EU policy making on

– EU-wide trustmarks schemes– the Stakeholder platform for EU online trustmarks.

The Trustmarks Study is carried out by a Consortium led by TNO (NL) and involving Intrasoft International (Lux).

Trustmarks in the Digital Agenda for Europe: Action 17

• The DAE:– Trustmarks play a key role in informing customers on the rules,

procedures and warranties of online merchants– They guarantee the quality and security of the online

transaction and boost consumer confidence– Become one of the factors for the development of cross-border

eCommerce in the EU– The European Commission elaborates different policy options

for EU online trustmarks, and– Works out the alternatives for cooperation platforms for the

governance of EU trustmarks systems

Our empirical analysis

• Extensive research on an initial set of 75 trustmarks in– Europe (EU 27)– North America (US)– Asia (Japan, Philippines, Singapore, Thailand, Vietnam)

• Desk research on 48 trustmarks, many of them only theoretical or not active, or deactivated

• 16 in-depth interviews with the more “mature” trustmarks, as a basis for a best practice approach, also considering the geographical dimension.

What are Trustmarks?• A trustmark is a label issued by a body which is

verifying/certifying certain parts of the online trading process:– SSL certification– Regulatory basis for the online shop– Transparency of information– Privacy assurance– Dispute resolution system– Money back guarantee– Consumer rating– Publishing revocation– Third party accreditation

Where are mature Trustmarks?

One trustmark

Two trustmarks

Four trustmarks

Three trustmarks

Typical certification steps• SSL certification• Validity of webshop• Administrative check• Legal check of sales regulation• Check of sales procedures

– Transparency– Privacy– Redress procedures– Test order/Mystery shopping, simulated purchase

• Auditing– Periodical review of characteristics– Physical on-site visit

• Third party certification

Trustmarks

A service from the market to the market

The Trustmarks Landscape• There are trustmarks all over Europe and all over the world• Their geographical distribution is uneven• Their size and level of “maturity” is extremely variable• There seems to be a correlation between the maturity of

trustmarks and the maturity of online trade• Their features and verification/certification patterns are

very heterogeneous• Many of them do not carry out marketing activities towards

consumers and have a limited marketing activity toward their subscribers

Cross-border nature of trustmarks

Trustmarks subscribers

• From less than 50 (boutique-trustmarks)• To over 5000

Barriers trustmarks can address

Buyer’s perspective Merchant’s perspective

Complaints resolution, redress Deliver a trust brand

Confidence and trust Improve market presence and scope

Payment security (SSL and process)

Payment security assurance

Delivery (Stock management) Guidelines and best practices for eCommerce

Personal data protection Risk of fraud and non-payment

Transparency of information and pricing, extra charges

Merchant Location and identification

Awareness of regulations and rights

Barriers for which Trustmarks have a limited

scopeBuyer’s perspective Merchant’s perspective

Legal protection of consumers outside the DSS

Cross-border payments

Delivery (Logistics part) Legal and regulatory issues (only related to consumer protection)

Frauds/Scams

Cross-border delivery

Barriers outside the scope of trustmarks

Buyer’s perspective Merchant’s perspective

Language barriers Language barriers

Delivery times external to the merchant

Cross-border regulatory issues on VAT, consumer protection and eCommerce, regulations on copyright

Environmental issues Cross-border logistics

Enforcement of hard regulations

Potential Market Failures

• Awareness of consumers and merchants• Heterogeneous setup of trustmarks

features: certification, ADR, ODR, regulation

• Focusing of trustmark capabilities in respect to barriers

• Certification schemes and supervisors• Lack of (cross-border) marketing

Preliminary Conclusions for policy making options

• The trustmarks platform– Minimum features– Connect trade, buyers and trustmarks providers– Identify market failures– Identify and disseminate best practices

• Set up a third party verification entity• Launch and promote cross-border awareness actions• Integrate ADRs and ODRs into trustmarks schemes• Issue cross-border “hard” regulations on online trade