February 23, 2012

White House Privacy Plan May Bring Big Consequences for Consumers

Adam Thierer

Senior Research Fellow
Summary

This morning, the White House announced a plan to increase protections for consumers’ online privacy, but Mercatus Center scholar Adam Thierer worries consumers are not aware of the consequences increased regulation may bring.

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This morning, the White House announced a plan to increase protections for consumers’ online privacy, but Mercatus Center scholar Adam Thierer worries consumers are not aware of the consequences increased regulation may bring.

“No matter how well-intentioned, a privacy police force isn’t likely to work—at least not without continuous governmental interventions to try to put the digital genie back in its bottle. Such efforts will be costly, increasingly intrusive, and likely to open the door to many other forms of Internet regulation.

“One consequence of increased privacy regulation could be higher prices for sites and services that we currently enjoy largely free of charge thanks to online advertising and a certain amount of personal data collection. Most consumers gladly accept this deal that keeps the digital goodies flowing. But they won’t likely have as many online choices if a new regulatory regime steps in and slays the goose (advertising) that lays the Internet’s free golden eggs (‘free’ sites and services).

“The problem with following a European approach to privacy controls is that it could have serious costs for the competitiveness of America’s Internet sector.  Increased consumer education and awareness, industry self-regulation, and greater personal and corporate responsibility is the better approach to protecting online privacy.”