Wall Street Journal, December 2, 1998
On Monday the White House announced a series of initiatives intended to promote the Internet and electronic commerce. While the administration generally recognizes that online businesses should be free from government regulation, its actions belie its words in the key area of privacy. Vice President Al Gore has been calling for an “electronic bill of rights,” joining the chorus of regulators who claim that World Wide Web sites force users to divulge personal information, which can then be abused. But while privacy concerns are real, the “privacy crisis” is not. Web users can already protect their information. Government intervention would harm the Internet.
Sites collect information in two ways: They ask visitors to fill out registration forms or they feed them “cookies.” Stored on your hard drive, cookies are files that tell sites information about you. They are planted after a site asks your browser for permission to create them. Cookies alone cannot divulge your name or address, but they can reveal how long you stay at a page, which products you like, and which sites you visit.
Sites use the information they gather in several ways. They monitor what attracts visitors and tailor themselves to various interests. If you give it to them, they sometimes sell your name to third parties, often to direct marketers who launch e-mail solicitations. Washington wants to end these practices.
Regulators want to impose a uniform privacy policy on commercial Web sites, starting with those that cater to children. Seven privacy bills have been proposed in Congress, all of which reflect Mr. Gore’s declaration that Web users “should have the right to choose whether… personal information is disclosed” and “to know how, when, and how much of that information is being used.”
But individuals already have these rights. Each time they visit a site, Web users control what information they relinquish and how it is used. To begin with, users do not have to use Web sites in the first place. Commercial Web sites, after all, are the property of businesses, which have a right to charge for their use. The access fee is often measured in information: Users trade information for access to a site.
Contrary to regulators’ claims, this exchange is a voluntary, informed and negotiated transaction. Every movement on the Web is processed as a request for information: You type in a site address and your computer asks the site for permission to view its information. Sometimes access is free and the information transfers immediately. Other times the site asks if it can plant a cookie or requests that the user complete a registration form.
Web users aren’t forced to grant these requests. They don’t have to complete a form, and browsers that automatically accept cookies can be easily modified to seek the user’s permission first.
If a site demands information in return for access, visitors can check to see if a privacy policy is posted. This policy announces how visitors’ information is used. If the site’s policy is unacceptable or hidden, users can leave before their information is transferred. But if they relinquish their information, a contract is forged.
In return for granting access the site receives permission to use the visitor’s information. At this point, the user gives up direct control of his information. If the site has a posted policy, it must abide by that contract or face legal consequences. If its policy isn’t posted, the site may use visitors’ information as it sees fit.
The U.S. Supreme Court validated this idea in 1976. In U.S v. Miller, the justices ruled that information voluntarily conveyed as a negotiable instrument is surrendered to the flow of commerce. The principle applies to information on the Web.
New privacy regulations would be at best redundant. At worst, they would raise the start-up costs of Web-based businesses and impose compliance costs on the businesses that don’t need privacy policies. And they would create a new reliance on government solutions to online “problems,” eroding the cornerstones of individual freedom, responsibility and accountability that form the foundation of Internet culture.
Justin Matlick is a Chicago-based senior fellow in information studies for the Pacific Research Institute in San Francisco. He can be reached via email at jmatlick@pacificresearch.org.