Cato Handbook for Congress: Policy Recommendations for the 106th Congress

By Edward H. Crane; David Boaz | Go to book overview

17.
Privacy and Private-Sector
Databases

Congress should leave well enough alone and allow the market to address people's privacy concerns.

Because anything new is frightening, the growth of new information technology like the Internet provides a powerful emotional impetus for the creation of new privacy rights. Proposals to regulate the use of consumer information by private-sector companies have proliferated in the states and in Congress.

This “crisis” approach is a mistake. Seeking information about others is natural behavior. From businesses and finance institutions to shopkeepers, neighbors, coworkers, and friends, the normal rule of human relationships is that people are free to learn about other people and talk about them. Web sites are deaf and blind without the aid of cookies. Some professions— medicine and law, for example—require the assurance of confidentiality to gain their clients' trust. But freedom of information has been the rule, with laws protecting privacy the exception.


Privacy Regulation: An Extreme Approach

Proposals for regulation to protect privacy are more radical than their advocates realize. Many proposals would make it difficult for businesses to communicate facts about real people and real events to one another without satisfying elaborate notice and consent provisions. That turns the normal rule of freedom of information on its head. This is an extremely radical idea with far-reaching consequences for consumers and the economy. It is the legal equivalent of a sudden and massive expansion of copyright law, with a tremendous impact on information now in the shared domain. Consumers and constituents are unaware of the full consequences of adopting such extreme proposals.

-187-

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