February 22, 2011

Public Interest Comment on Protecting Consumer Privacy in an Era of Rapid Change

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This publication is a public interest comment on the Federal Trade Commission report, Protecting Consumer Privacy in an Era of Rapid Change.

It goes without saying that privacy is a highly subjective[1] and ever-changing condition.[2] Unsurprisingly, therefore, attitudes about targeted online advertising are evolving and in various filings to the Commission as well as countless news stories, we hear both regulatory advocates and average consumers alike stress the “creepiness” factor associated with online data collection and targeted advertising.

“But creating new privacy rights cannot be justified simply because people feel vague unease,” notes Solveig Singleton, formerly of the Cato Institute.[3] If harm is reduced to “creepiness” or even “annoyance” and “unwanted solicitations” as some advocate, it raises the question whether the commercial Internet as we know it can continue to exist. Such an amorphous standard leaves much to the imagination and opens the door to creative theories of harm that are sure to be exploited. In such a regime, harm becomes highly conjectural instead of concrete. This makes credible cost-benefit analysis virtually impossible since the debate becomes purely about emotion instead of anything empirical. It does not help that most modern theories of privacy are not grounded in any substantive theory of rights.

Importantly, nothing in the Federal Trade Commission’s proceeding has thus far demonstrated that online data collection and “tracking” represent a clear harm to consumers per se, or that any “market failure” exists here. Such a showing would be difficult since using data to deliver more tailored advertising to consumers can provide important benefits to the public, as will be noted below.

In sum, the Commission should avoid calls to untether privacy regulation from a harms-based analysis, which tests whether concrete, tangible harms exist and then weighs the benefits of regulation against its costs. It is unlikely the vast majority of online advertising and data collection activity would meet this test. 


[1]      “Properly defined, privacy is the subjective condition people experience when they have power to control information about themselves.” Jim Harper, “Understanding Privacy—and the Real Threats to It,” Policy Analysis 520 (Washington, DC: Cato Institute, August 4, 2004), www.cato.org/pub_display.php?pub_id=1652. “When it comes to privacy, there are many inductive rules, but very few universally accepted axioms.” David Brin, The Transparent Society (New York: Basic Books, 1998), 77. “On the social Web, privacy is a global and entirely subjective quality—we each perceive different threats to it.” Betsy Masiello, “Deconstructing the Privacy Experience,” IEEE Security & Privacy, July/August 2009, 70. “Privacy is a matter of taste and individual choice.” Michael Fertik, Comments of Reputation.com, Inc. to the U.S. Department of Commerce, January 28, 2011, 13, http://www.reputation.com/blog/2011/01/31/reputation-com-comments-commerce-department-privacy-green-paper. “In most conversations, no one knows what anyone else means by ‘privacy,’ or what information is included in the terms ‘personally-identifiable information…” Larry Downes, “A Market Approach to Privacy Policy,” in Berin Szoka and Adam Marcus, eds., The Next Digital Decade: Essays on the Future of the Internet (Washington, DC: TechFreedom, 2011), 514, http://nextdigitaldecade.com/ndd_book.pdf#page=510.

[2]      “The meaning of privacy has changed, and we do not have a good way of describing it. It is not the right to be left alone, because not even the most extreme measures will disconnect our digital selves from the rest of the world. It is not the right to keep our private information to ourselves, because the billions of atomic factoids don’t any more lend themselves into binary classification, private or public.” Abelson, Ledeen, and Lewis, Blown to Bits, 68.

[3]      Solveig Singleton, “Privacy as Censorship: A Skeptical View of Proposals to Regulate Privacy in the Private Sector,” Policy Analysis 295 (Washington, DC: Cato Institute, January 22, 1998), 8, http://www.cato.org/publications/policy-analysis/privacy-censorship-skeptical-view-proposals-regulate-privacy-private-sector