Study: Trustmarks Provision in Europe Luca Alessandro Remotti Intrasoft 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?

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 Buyers perspectiveMerchants perspective Complaints resolution, redressDeliver a trust brand Confidence and trustImprove market presence and scope Payment security (SSL and process)Payment security assurance Delivery (Stock management)Guidelines and best practices for eCommerce Personal data protectionRisk 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 scope Buyers perspectiveMerchants 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 Buyers perspectiveMerchants perspective Language barriers Delivery times external to the merchantCross-border regulatory issues on VAT, consumer protection and eCommerce, regulations on copyright Environmental issuesCross-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