TPI President Tom Lenard filed comments with the Department of Commerce today regarding its proposed privacy framework. His take: the Green Paper contains little data or analysis to show whether its framework will improve or reduce consumer welfare. Moreover, the proposal “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.”
Lenard strongly urges the agency to:
- Collect current data on the privacy and data management practices of major web sites. It is impossible to make an informed policy decision without an accurate understanding of current privacy practices. The most recent available data appear to be from 2001.
- Produce evidence showing that current practices are harming consumers. The agency’s privacy framework will only produce benefits to the extent it alleviates identified harms.
- Review what we know about how consumers value privacy. In addition to referring to current studies, the agency should also perform additional studies as a basis for estimating the benefits of a new privacy framework.
- Estimate the costs of its privacy framework and alternative proposals. These estimates should include direct pecuniary costs to firms from devoting more resources to privacy and the indirect costs of having less information available.
- Produce sufficient evidence of a reasonable expectation that the benefits of its proposal are greater than the costs. Otherwise the proposal should not be adopted.
Tom’s brief comments can be found here.