This is essential to the future of electronic commerce. People will not want to post their personal information on the Internet without adequate guarantees of confidentiality. The U.S. has a well-developed data privacy protection regime. First, we target laws at individual privacy problems such as financial information or data on children. Supplementing these laws are industry self-regulatory codes.
Individual companies pledge to adhere to the codes, and advertise their adherence.
Hundreds of U.S. companies engaged in electronic commerce have subscribed to one or more of these codes. The teeth behind these self-regulatory codes are tough set of fair trade laws administered by the Federal Trade Commission, and state consumer protection agencies. If a company subscribes to a self-regulatory code and violates it, the company can be deemed to be engaging in deceptive business practices and heavily sanctioned. And almost invariably, the accompanying publicity severely damages the reputations of violators, and thus their ability to do business. So laws, and market, create powerful incentives to subscribe, and adhere, to codes of conduct.