July 1999 Issue

WEBTRUST: A PROGRESS REPORT

A little more than a year after its introduction, the AICPA's WebTrust is losing the numbers game with other competing services in the rush to provide consumer assurance on the web, though none of the programs has yet risen to the level of de facto standard. A recent New York Times article compared WebTrust with its two major perceived competitors, Trust-e and BBB Online Privacy.

Trust-e was founded in 1996 by the Electronic Frontier Foundation and CommerceNet as a nonprofit initiative with the purpose of building users' trust in the Internet through its seal of approval program. To date, more than 500 sites display its seal, or trustmark, which links to the site's privacy policy. The site's privacy policy must disclose its information collection and use practices and data security measures. Trust-e also offers consumer resolution mechanisms in the event a complaint is filed against a program participant. Trust-e can count many major online presences, such as Microsoft, Intel, eBay, the New York Times, and Yahoo, among its participants.

BBB Online Privacy was launched in March of this year by the Better Business Bureau. To date, several hundred sites have applied for BBB Online Privacy and several dozen have been approved. Its requirements and services are similar to the Trust-e program. Over 2,700 sites belong to the less extensive BBB Online Reliability program, which is an extension of traditional Better Business Bureau membership.

The AICPA's WebTrust program, which was launched in 1997, is distinguished from its competitors by virtue of its more rigorous and therefore more expensive requirements.
A participant must not only meet the WebTrust principles and criteria but also receive an unqualified report from a CPA with WebTrust training. To maintain the seal, a site must be reaudited at least every 90 days. About 20 sites have entered the WebTrust program.

It should be noted that none of the programs force licensees to adhere to a particular program of information disclosure, but more generally require participants to make their disclosure policies apparent to the user. Trust-e, for example, requires that a site's privacy policy be easily accessible, but does not go so far as to specify what that privacy must entail. Such statements can vary widely from site to site (even within different sections of a site) and can still be vague and labyrinthine documents. While this is certainly an improvement over complete nondisclosure, it should not be misinterpreted as a guarantee that any information given to that site will not be used internally or sold.

Arguably, WebTrust's assurances of effective internal controls and proper processing of orders and transactions goes further in providing the user with a sense of security in financial transactions than the competing systems. Why, then, has this advantage not to date been borne out in the marketplace? It may well be that this level of assurance is not cost-effective for the many sites that are more concerned with gathering user data for list or advertiser purposes rather than commerce transactions.

Certainly, no one can tell what the future holds for a medium that has been practically defined by its defiance of precedent. Though the U.S. Federal government has promised not to intervene in the web's development, the role that politics and regulation will play in the future is far from certain. Whether privately or publicly sponsored, it seems reasonable that there is room for a hierarchy of assurance services on the web, each filing a particular niche of the marketplace. CPAs may be involved in varying degrees in each of those services, given their noted objectivity and consumer trust. As part of the AICPA's ongoing evaluation of WebTrust services, it will of course be reviewing its niche in the marketplace and opportunities to broaden its appeal. *



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