Differences in legal framework, payment and logistics solutions are important barriers to crossborder trade in Europe. At an FDIH conference last October  Susanne Czech, secretary general of the European Distance Selling Organisation EMOTA stated that it may take 10-20 years to completely harmonize the legal framework. An analysis shows that the lack of harmonization results in serious distrust in crossborder trade among citizens.

One way to overcome the slow convergence of the countries legal frameworks is to add a voluntary agreement layer to level out the national differences. You may think of it as the legal equivalent to the IT-professionals JAVA Virtual Machine. It was suggested that this approach could be marketed through the implementation of a European Trust Mark to supplement the national trustmarks already implemented in several countries.

While such trustmarks are valuable as marketing vehicles to promote the use of best practices, they are of little value in widespread markets where effective reputation systems are not in place. If a traditional local shop violates best practices it will soon be judged by its customers and face the need for a costly move to another location. Currently even national trustmarks fail to provide merchants with a similar incentive to abide by the rules associated with the trustmark.

The problem will remain as long as trustmarks are based on bilateral agreements between individual merchants and the organisation representing the trustmark. A recent ruling from the Danish National Court shows that a merchants use of trustmarks do not have any legal impact on the relation between the merchant and the customers visiting his website. In the actual case the merchants use of the trustmark was both unauthorized (no agreement signed) and expressly disapproved by the organisation owning the trustmark.

This is where the upcoming identity providers will play an important role. In a previous entry I have mentioned Vendor Relation Management, which aims at placing vendors and customers on an even playing field. The relationship starts when the customer registers with the IDP. By managing and documenting this agreement process, the IDP may ensure that the mutual agreement between vendor and customer contains appropriate obligations for both parties as well as clearly defined sanctions and procedures for dispute resolution. Therefore it is important for entrants in this field to establish relations to consumer and trade organisations and/or develop federation terms which are aligned with existing “best practices”.

In a dynamic marketplace vendors may change their terms from moment to moment. Hence, without instantly recording any page visited, it can be difficult for a customer to proove which particular version of the terms he was exposed to. The above ruling also shows that such logging is the responsibility of the site visitor rather than the merchant. Just as payment transaction companies like Paypal and DIBS now act as trusted intermediaries with respect to the payment transfer, we will see identity providers filling the need for third party management and documentation of the various elements of any purchase and other agreements entered between the two parties.

Documented agreements is also a prerequisite for serious reputation management. So there is definitely some catching up to do for Internet Identity Management while the efforts to establish an open interoperable reputation management framework take shape.

What could be a better occasion for starting a new blog on user centric identity than last weeks IIW 2007b unconference at the Computer History Museum in Mountain View?

150 participants representing companies of all sizes from prospective startups to Yahoo, Microsoft and Google witnessed the official release of new protocol specifications for XRI, OpenID and OAuth as well as the presentation of new ambitious projects within the realms of reputation and self-management of profile data.

It is amazing to see how self funded enthusiastic individuals and companies in the US have developed these technologies over the last couple of years.

As a european citizen it is equally sad to realize that the European Union has wasted millions of Euro on fancy projects, that will never get traction in the marketplace.

Yet, as a citizen of Denmark, I see several unique options for employing and combining multiple identity related technologies to the benefit of both individuals and visionary companies. So this blog will be a place to watch for thoughts on the nuts and bolts as well as the incentives to build innovative user centric services.

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