Last week, the Administration released its long-awaited privacy report. The new privacy framework includes a Consumer Privacy Bill of Rights and a Multistakeholder (MSH) process to develop “enforceable codes of conduct” that put those rights into practice.
The inclusion of this “Bill of Rights” raises some serious concerns. In adopting the language of “rights” the Administration is moving toward the European approach, which also discusses privacy in terms of rights. This sends the wrong signal. The U.S. has created an environment that is much more conducive to IT innovation, partly as a result of our less regulatory privacy regime. It is not an accident that the U.S. has spawned literally all the great IT companies of the last couple of decades. Google, Facebook, Amazon, Microsoft and others all depend on personal information in one way or another. So, why we would want to move in the direction of Europe is a bit of a mystery.
Adopting the language of rights also provides a rationale for not subjecting privacy proposals to any kind of regulatory analysis. Rights are absolute. Once we label something a right, we’re saying we’re beyond the point of considering its costs and benefits. But privacy regulation involves major tradeoffs that we would be better off to consider explicitly. The White House report does not do that and suggests there is no intention to do so in the future.
In the report, the Administration also voices its support for legislation. However, this seems somewhat inconsistent with the MSH approach described in the report. A key advantage of the MSH approach, if structured properly, should be greater flexibility relative to regulation that would typically result from legislation. This flexibility is vital for the tech sector, which is constantly changing. We should give the MSH process a chance to work before trying to adopt something more formal. Therefore, Congress should put efforts to enact privacy legislation on hold.
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]
