Reflections on the Nc Jolt Symposium: the Privacy Self-regulation Race to the Bottom

• Publication year: 2003

Reflections on the NC JOLT Symposium:⁰ The Privacy Self-Regulation Race to the Bottom
Chris Jay Hoofnagle¹

It is 1904. A raging debate is taking place between consumer advocates and manufacturers of foods and drugs.² Manufacturers were profiting from the sale of adulterated and mislabeled products, and, in particular, through the marketing of sometimes dangerous "patent medicines." Industry self-regulation resulted in a race to the bottom, where adulteration of food in order to increase yield was common. Honest companies could not compete with those who could cut costs by adulterating or misrepresenting the contents of food. This Wild West of food and drug safety sparked calls in support of a federal law requiring food and drugs to be safe and pure. Manufacturers opposed such legislation, arguing that self-regulation would produce safe and pure products; that federal legislation is paternalistic, as it controls interactions between buyers and sellers; that it would harm innovation; and that it would interfere with free enterprise rights.

We are in the Wild West of privacy and security today. As was the case with consumers of food and drugs one hundred years ago, today's consumers know little about the actual practices of companies that have their personal information. There is skyrocketing identity theft, stalking made possible through the sale of personal information, and a shift in power from individuals to business and government data collectors. There also are more subtle, cultural harms. Individuals feel more vulnerable to strangers and, as a result, are less likely to engage in social behaviors like exchanging phone numbers.³ There is an emerging field of activism that argues direct marketing pollutes the "mental environment"⁴ and that economists need to account for distraction as a harm or cost caused by privacy-invasive advertising.⁵

Consumer advocates have called for broad ranging privacy protections—ones that not only require accurate notice but also place a ban on certain uses of personal information. The industry, perhaps best represented at the North Carolina Journal of Law and Technology Symposium by Chris Mustain of IBM, counters these calls with the same language and arguments used to avoid accountability in the food and drug debate—that privacy law will infringe upon innovation and free enterprise rights.

With the hindsight of nearly one hundred years of food and drug regulation, we now know that the manufacturers' arguments against safety and purity laws were specious. Self-regulation encouraged fraudulent and unpalatable practices. Philip J. Hilts, in his recent book Protecting...