Abstract
The last two chapters demonstrated that markets for commercial information are responding to consumers concerns and preferences with respect to privacy. There appears to be no evidence of market failure, or even of harm to consumers. There are, nonetheless, proposals for regulation, most prominently from the Federal Trade Commission.128 The National Association of Attorneys General (NAAG) has also proposed greater government involvement.129 In this chapter, we consider alternative rationales for expanded regulation, which seem largely to be based on public opinion and other survey data.
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Federal Trade Commission, Privacy Online: Fair Information Practices in the Electronic Marketplace, May, 2000, available online at http://www.ftc.gov/os/2000/05/index.htm#22. The new FTC Chairman has indicated that he wants to review these recommendations.
Draft Memo, December 11, 2000, National Association of Attorney s General Avavliable online at http://www.pandab.org/E-Commercc%20Exec.%20Summary.html July, 2000; Pew /internet and American Life Project, “The Internet Life Report: Trust and Privacy Online: Why Americans want to rewrite the rules.” August, 2000. More informat ion available at www.pewinternet.org; The Wall Street Journal-Harris Interactive Poll, “Exposure in Cyberspace,” The Wall Street, March 21,2001.
Jerry Kang, “Information Privacy In Cyberspace Transactions” 50 Stanford Law Review 1193, April 1998, at 1198–1199, footnotes omitted. As of December 26, 2000, Westlaw indicate s that this article had been cited 100 times — a large number for a relatively new article. Moreover, it has been cited in many or most of the law review literature on privacy in cyberspace.
Jeff Sovern, “Opting In, Opting Out, Or No Option s At All: The Fight for Control of Personal Information,” 74 Washington Law Review 1033, October, 1999. at 1034, footnotes omitted.
From the Equifax survey, cited in Jeff Sovern, “Opting In, Opting Out, Or No Options At All: The Fight for Control of Personal Information,” 74 Washington Law Review 1033, October, 1999. p. 1061 and footnotes.
It is sometimes argued that the value of privacy is demonstrated by the willingness of many consumers to have unlisted phone numbers. But this is consistent with the argument here. A phone number is available to real people. It is quite consistent to value privacy with respect to what is known by humans more highly than privacy with respect to information held on computers. See Eli Noam, “Privacy and Self-Regulation: Markets for Electronic Privacy,” in Privacy and Self-Regulation in the Information Age, U. S. Department of Commerce, Washington, 1997, http://www.ntia.doc.gov/reports/privacy/selfreg1.htm.
The FTC did not report on federal government Web sites, which appear not to have made as much progress — by the FTC's criteri a — as private sites. See Government Accounting Office (GAO), “Information Security: Serious and Widespread Weakesses Persist at Federal Agencies; Government Accounting Office (GAO) (2000b), “Internet Privacy: Federal Agency Use of Cookies”. GAO-01-147R, October 20 2000. Recall that the FTC found that 88 percent of a random sample of Web sites and 100 percent of the most visited sites had privacy disclosures; for the federal government, the corresponding figures are 84 percent of the random sample and 75 percent of the “high impact” Web sites. Indeed, questions have been raised about the government’s sensitivity to several privacy issues. Two recent Government Accounting Office (GAO) reports have found that government Web sites routinely violate privacy principles. One of these studies finds that 12 of 65 government Web sites surveyed (18 percent) give cookies without notice; three of those give third-party cookies. See Government Accounting Office (GAO), “Internet Privacy: Federal Agency Use of Cookies,” GAO-01-147R, October 20, 2000. Moreover, eight of 32 “high impact agencies, which handle the majority of the government's contact with the public” are among the agencies that do not even provide notice. In a somewhat different area, but also related to privacy, substantial questions have been raised about the privacy implications of the FBI's new Internet monitoring technologies. See “Reno Says Review Is Under Way on Internet ‘Wiretapping’,” Associated Press/ New York Times, July 14,2000. Although a review has found that there are no difficulties with this program, others disagree: John Schwartz, “Review Released on Web Wiretap,” New York Times November 22, 2000.
We also note that the Supreme Court has rejected this argument in another context. In the case involving the Communications Decency Act (CDA) the government made the argument that the Internet would grow faster if there were regulation of pornography, an argument similar to that made with respect to protection of information. The opinion stated: In this court, though not in the District Court, the government asserts that — in addition to its interest in protecting children — its “equally significant” interest in fostering the growth of the Internet provides an independent basis for uphold ing the constitutionality of the CDA. The government apparently assumes that the unregulated availability of “indecent” and “patently offensive” material on the Internet is driving countless citizens away from the medium because of the risk of exposing themselves or their children to harmful material. We find this argument singularly unpersuasive. The dramatic expansion of this new marketplace of ideas contradicts the factual basis of this contention. The record demonstrates that the growth of the Internet has been and continues to be phenomenal. As a matter of constitutional tradition, in the absence of evidence to the contrary, we presume that governmental regulation of the content of speech is more likely to interfere with the free exchange of ideas than to encourage it. The interest in encouraging freedom of expression in a democratic society outweighs any theoretical but unproven benefit of censorship. See Janet Reno, Attorney General of the United States, et al., Appellants v. American Civil Liberties Union et al., No. 96–511, Supreme Court of the United States, decided March 19, 1997, at 15–16.
FTC Advisory Commission Report, separate statement of Stewart Baker, p. 40.
For additional discussion of this issue, see Solveig Singleton and Jim Harper, “With a Grain of Salt: What Consumer Privacy Surveys Don't Tell Us,” May 8, 2001, http://www.cei.org/PRReader.asp?ID=1469.
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Rubin, P.H., Lenard, T.M. (2002). Polls, Policy and the FTC. In: Privacy and the Commercial Use of Personal Information. Springer, Boston, MA. https://doi.org/10.1007/978-1-4615-1719-1_5
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DOI: https://doi.org/10.1007/978-1-4615-1719-1_5
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