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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),