On August 20, 2018, Free State Foundation President Randolph J. May and I submitted comments in connection with the FTC's "Hearings on
Competition and Consumer Protection in the 21st Century." These particular comments are submitted on the topic of "The Intersection Between Privacy,
Big Data, and Competition."
Here is an excerpt from our comments:
The exchange of non-sensitive consumer information
enables companies to sell targeted advertising, which covers the costs of
offering “free” content and services to consumers. Substantial evidence shows
that the overwhelming majority of consumers are willing to exchange personal
information for “free” content and services. However, it is important that firms
provide consumers with adequate disclosure regarding the collection and use of
their personally identifiable data. This way, as part of the bargain, consumers
are empowered to make informed choices that reflect their preferences.
Because the functioning of much of the Internet
ecosystem involves the exchange of non-sensitive consumer information, as a
default, "opt-out" rules, as opposed to "opt-in" rules,
spur the development of additional Internet content and services. This enables
the monetization of a greater pool of consumer information, while still
empowering consumers with a choice about if they want their data collected and
used. For certain clearly sensitive information, for example relating to health
or financial services, the default should be opt-in rather than opt-out.
Consumers expect the application of consistent privacy
rules throughout the entire United States. Therefore, privacy regulation in the
U.S. should reflect those expectations, whether consumers are doing business
with an Internet service provider (ISP) or an edge provider. Internet communications
do not stop or change at state borders and neither should privacy laws. To the
extent state-by-state privacy regulations differ, this creates a "patchwork
problem" for service providers that, at a minimum, imposes additional
costs but also is likely to stifle investment and innovation. The FTC should regulate
the privacy practices of both edge providers and ISPs in a consistent
manner, and to the extent that a "patchwork" of state laws and
regulations develop that impose more stringent requirements on service
providers than those imposed at the federal level, then those state laws and
regulations that conflict with federal policy should be preempted.
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