I filed comments today on the FTC staff report on privacy, which sadly is another in a long line of privacy policy proposals without any supporting data or empirical analysis. So much for data-driven policy.
Although the report asserts that “industry must do better,” it contains no systematic data on what industry is doing now. So, how can we know that industry needs to do better? Policymakers can’t make informed decisions without understanding what the baseline is – what’s going on now in the marketplace. The last systematic study of privacy practices of commercial web sites appears to be a 2001 survey (one that I was involved with) undertaken by The Progress & Freedom Foundation and Ernst & Young.
The FTC staff proposal is based on “the major themes and concepts” developed through their roundtables. Themes and concepts are interesting, but they are not a substitute for data and analysis. Without an analysis of benefits and costs there is no way to know whether the proposal or any of its elements would improve consumer welfare. The staff acknowledges the need to assess the costs and benefits of its most prominent proposal, a Do-Not-Track mechanism, but then endorses the proposal without having done such an assessment. This violates the spirit, if not the letter of President Obama’s recent executive order on regulation, which stresses the need to evaluate both benefits and costs.
The commercial use of information online is a critical part of the Internet, supporting a wide array of content and producing other benefits. The FTC is the expert agency on privacy issues, yet its staff has proposed a major new regulatory framework for this sector without any data. We need much more to inform the policy discussion.
Thomas Lenard is Senior Fellow and President Emeritus at the Technology Policy Institute. Lenard is the author or coauthor of numerous books and articles on telecommunications, electricity, antitrust, privacy, e-commerce and other regulatory issues. His publications include Net Neutrality or Net Neutering: Should Broadband Internet Services Be Regulated?; The Digital Economy Fact Book; Privacy and the Commercial Use of Personal Information; Competition, Innovation and the Microsoft Monopoly: Antitrust in the Digital Marketplace; and Deregulating Electricity: The Federal Role.
Before joining the Technology Policy Institute, Lenard was acting president, senior vice president for research and senior fellow at The Progress & Freedom Foundation. He has served in senior economics positions at the Office of Management and Budget, the Federal Trade Commission and the Council on Wage and Price Stability, and was a member of the economics faculty at the University of California, Davis. He is a past president and chairman of the board of the National Economists Club.
Lenard is a graduate of the University of Wisconsin and holds a PhD in economics from Brown University. He can be reached at [email protected]
