San Diego Union Tribune, December 15, 1999

“I’m from the government, and I’m here to help.” That old laugh line should be foremost in the minds of Americans today as the debate over the sharing of consumer information by businesses and institutions spawns louder calls for government intrusion.

Head-spinning advances in electronic collection, storage and transmission of data have created a turbo boost for America’s high-speed economy, which is creating more good jobs than can be filled.

With growing public concern that personal information is being collected, bought and sold by companies (and, ominously, by government), a reflexive turn to government as info-cop has occurred. Sweeping government restrictions on even the most reasonable information practices by businesses have been rushed forward in state legislatures and Congress, fueled by a rash of headlines, and not much else.

California lawmakers are poised to grab their share of media attention: The Assembly Consumer Protection Committee is holding a hearing in San Diego today featuring a cast of self-described “privacy advocates” and government officials.

But even as companies and entire industries swiftly embrace meaningful self-regulation policies governing personal information collection and sharing practices, the prospect of government intrusion into virtually every corner of American commerce becomes more troubling than the problem itself.

A dozen major federal laws that protect consumers from privacy abuses are already on the books. In California, more than a dozen statutes complement and extend those federal laws. In fact, the newsletter Privacy Journal recently named California first among the states for having the strongest privacy protection laws and policies.

But the real key to addressing consumers’ privacy concerns rests within the marketplace, not the government. Significantly, several private self-regulatory bodies have been established to address consumer privacy concerns.

Trust-e, an organization that certifies and polices site’s privacy policies, has certified all the Internet’s portal sites, and half of the top 100 sites. The Better Business Bureau’s BBB OnLine program has given its seal of approval to more than 2,700 companies that meet its online regimen, which includes disclosure of privacy policies and choices consumers can exercise to restrict access to personal data. The Online Privacy Alliance, a coalition of 85 global businesses and trade associations, commits its members to similar self-regulation measures and includes third-party enforcement procedures to ensure consumer protection.

There are many other self-regulatory bodies currently moving to address consumer concerns, and by all accounts their cumulative efforts work. Indeed, businesses that utilize the Internet are moving rapidly to provide consumers with greater privacy information. A recent Georgetown University survey of popular web sites found that 66% posted a privacy policy for consumers, up from only 14% in a federal study the year before.

Whenever government intrudes into the marketplace, noble purposes notwithstanding, businesses and the consumers who rely on business innovation are harmed. In California alone, direct marketing accounts for an estimated $184 billion in sales and 1.6 million jobs, with more than $14.3 billion in tax revenues to the state.

Beyond the economic benefits to all of us, responsible information-sharing serves some of society’s most critical needs. Reference services help credit card issuers and banks combat identity theft and account fraud, while insurance companies use data-sharing services to identify individuals running fraud schemes that drive up premium costs. Employers may use information databases to check the backgrounds of licensed professionals, such as childcare workers, for records of past trouble.

A rush of new government regulations and restrictions will jeopardize the many economic and social benefits that flow from responsible information sharing. There is a better way.

The greatest motivator for businesses and industries to address consumer privacy concerns in a meaningful way is the power wielded by consumers, not government regulators. Consumer-driven self-regulation is the best way to protect America’s prosperity in a global economy that brings dramatic change — through electronic data transmissions — literally by the minute.

Sonia Arrison is director of the Center for Freedom and Technology at the California-based Pacific Research Institute. She can be reached via email at sarrison@pacificresearch.org.