We’ve seen TV shows about ghost hunters and Bigfoot hunters, where they eschew science and fact in favor of fears and fantasy.   That’s understandable, since it’s impossible to have real conversations when some talk about what might exist and others are talking about what does exist.  The same is true for sweeping privacy legislation coming out of the Obama White House. 

This week the White House released its Privacy Bill of Rights -- sweeping privacy legislation based mostly on anecdotes and fears instead of evidence and cost-benefit analysis.  By arming the Federal Trade Commission (FTC) with incredible new punitive powers, this bill strings CAUTION tape in front of American businesses developing new technologies and business models.


This White House move would have been more compelling had there been adequate justification for this hamstringing of online business.  But the rationale for this bill is based on White House and FTC reports on ‘big data’ that failed to identify any real harms to consumer privacy.  Instead, the reports relied on anecdotal evidence and a parade of horribles to justify new limitations on innovation.  

Legislative proponents also failed to justify this new bill by identifying gaps in existing privacy laws.  Between Gramm-Leach-Bliley, HIPPA, VPPA, COPPA, FCRA, and the FTC Act, it seems that all commercial activity is already covered.  But if gaps do exist, the burden should fall on advocates of this legislation to show us the gaps.  Without evidence of harms that escape existing law, or an impact assessment of new legislation, laws like this will result in more problems, not solutions.

Consumer protections and privacy are important to anyone trying to build an online business with a sustainable business model.  Protecting consumer privacy has evolved from an overhead expense to a business necessity and a competitive advantage.  For example, look at the granular privacy controls Facebook gives its users, and  the “incognito mode” in the Chrome and Safari browsers. Moreover, a company’s ability to protect customers is expected , so any breach of that confidence kills brands, torpedoes sales, and crushes the bottom line.  In short, businesses that protect customers protect their businesses. 

Let’s have a conversation about what is and then go from there.  Until then, Congress should not embrace White House legislative proposals that chase after privacy ghosts. 

Szabo, policy counsel for NetChoice, analyzes tech-related legislative and regulatory initiatives relevant to online companies.