FTC Privacy Report: In Search of Data

By Tom Lenard
February 17th, 2011

I filed comments today on the FTC staff report on privacy, which sadly is another in a long line of privacy policy proposals without any supporting data or empirical analysis.  So much for data-driven policy.

Although the report asserts that “industry must do better,” it contains no systematic data on what industry is doing now.  So, how can we know that industry needs to do better?  Policymakers can’t make informed decisions without understanding what the baseline is – what’s going on now in the marketplace.  The last systematic study of privacy practices of commercial web sites appears to be a 2001 survey (one that I was involved with) undertaken by The Progress & Freedom Foundation and Ernst & Young.

The FTC staff proposal is based on “the major themes and concepts” developed through their roundtables.  Themes and concepts are interesting, but they are not a substitute for data and analysis.  Without an analysis of benefits and costs there is no way to know whether the proposal or any of its elements would improve consumer welfare.  The staff acknowledges the need to assess the costs and benefits of its most prominent proposal, a Do-Not-Track mechanism, but then endorses the proposal without having done such an assessment.  This 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.

The commercial use of information online is a critical part of the Internet, supporting a wide array of content and producing other benefits.  The FTC is the expert agency on privacy issues, yet its staff has proposed a major new regulatory framework for this sector without any data.  We need much more to inform the policy discussion.

3 Responses to “FTC Privacy Report: In Search of Data”

  1. Perhaps one reason online data collection backed organizations such as yours are fearful of the FTC’s staff proposed consumer privacy framework is that the commission–for the first time in years–has gained a serious understanding of how online marketing data collection practices seriously threaten privacy. The report is based on a focused analysis of the market by the staff. You ignore the commission’s expert roundtables, filings, and other work done to develop this new approach. But as a political arm of the data collection lobby, that’s what you are supposed to do!

  2. Tom Lenard says:

    I assume that Jeff has read both the FTC report and my filing, but it’s not apparent from this comment. In fact, contrary to what Jeff says, the FTC report provides neither a “serious understanding of online marketing data collection practices” nor of how they impact consumers. Most importantly, the FTC report fails to provide analysis showing its own proposals will provide the intended benefits to consumers. Such a cost-benefit analysis is vital as a basis for policymaking.

    Obviously Jeff is not the first to resort to name calling when he has a weak argument. It’s a fairly common Washington practice. In fact, none of our sponsors asked us to write these comments, and none of them saw the comments before they were filed. These comments are my own and reflect work that I have done on this subject for about a decade now.

    TPI does list its supporters on its web site in the interests of transparency. We are one of the very few think tanks that does so. I looked on the Center for Digital Democracy web site for a list of their donors, but was unable to find it.

  3. [...] concern that has been reiterated many times by TPI’s esteemed leader, Tom Lenard: “Where’s the data?“  Indeed, the influx of privacy bills and reports of late seem to be based much on feeling [...]

Leave a Reply