Omnibus Privacy Legislation not Necessary for Internet, Technology, Panelists Say
Regulators must exercise "regulatory humility" when addressing potential harms of big data and the IoT because it’s difficult to anticipate future business models and unintended consequences of regulatory action, FTC Commissioner Maureen Ohlhausen said Thursday during a Software & Information Industry Association (SIIA) event. Europeans say Americans have no privacy protections, but that’s not true, Ohlhausen said, citing the such laws as the Health Insurance Portability and Accountability Act , the Children’s Online Privacy Protection Act and the Gramm-Leach-Bliley Act.
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Privacy is a primary worry driving policy today, said George Mason University’s Mercatus Center Senior Research Fellow Adam Thierer. The European Union took a highly precautionary, heavy-handed, top-down approach, whereas the U.S. took the approach that encouraged innovation, Thierer said. America won the innovation wars, Thierer said, because it got the policy prerequisites right. The U.S. already has a good privacy protection framework in place, he said, saying the FTC has the “most stringent and perfect consumer protection approach.”
Big data and the IoT have the potential to improve lives, Ohlhausen said. Brookings Institution Senior Fellow Ben Wittes agreed. Privacy advocates assume someone has been keeping score of privacy increases and decreases, but that hasn’t happened, Wittes said. Technology increases privacy in some ways and decreases privacy in others, he said. For example, Woody Allen's character in the 1971 film Bananas attempts to buy porn at a newsstand, Wittes said, but when an older lady leers at him, he becomes self-conscious and grabs other “high-minded” magazines to buy as well. Once at the counter, the clerk shouts for a price check on the porn magazine, embarrassing Allen’s character. Today, kids can acquire and consume porn in the privacy of their own bedrooms, Wittes said.Technology has allowed a gay teen to explore questions about his sexuality by searching the Web, and, thanks to self-checkout, teens can buy condoms at CVS without having to buy them from a person, he said.
Theoretically someone could track an individual’s Internet traffic habits, as Google stores searches that can be made available to law enforcement in case they're related to illegal behavior, Wittes said.
The debate on online privacy is just a replay of the debate that occurred on online child safety, Thierer said. “We’re in a better world because we didn’t censor the Internet,” he said. Attention should be paid to revenge porn and cyberbullying, he said. Once serious problems are addressed, other issues can be addressed as they surface, he said.
The real menace for a traditional privacy activist is Amazon’s Kindle because it allows Amazon to know what books you’ve read, bought, what page you’re on and what passage you highlighted and found interesting, Wittes said. The 50 Shades of Grey e-book outsold the hardcover, Wittes said, because no one wants to be seen reading that book on the metro. “People care a great deal more about the privacy immediately around them,” like what their parents, loved ones, partners, etc., know about them than what a company knows, he said.
Before big data, marketers used approximate age, race, household income and religion to try to determine what people wanted, Ohlhausen said. Big data can be used to help companies see past superficial characteristics and find the true needs of consumers, she said. When polled, the average person would say big data is bad, because there's so much misinformation out there, said Joshua New, policy analyst at the Information Technology and Innovation Foundation’s Center for Data Innovation. Big data is an incredible opportunity, New said, but there's potential for a digital divide in which lower socioeconomic classes encounter data poverty. Some hospitals don’t collect data on newborns and some schools lag on using technology, New said.
Much of the promise with big data is finding something new and useful that wasn’t intended with the initial collection of the data, Ohlhausen said. This raises a few issues such as companies' inability to give notice and obtain consent on the new use of the data, and companies have a strong incentive to retain data, she said. Strictly limiting data use to a known purpose could “handicap data scientists’ ability to solve problems,” Ohlhausen said. Data driven decisions can be wrong, even if they seem right, Ohlhausen said. Improper use of consumer information also causes harm, she said. Resources should be put into protecting sensitive information like health, children, finances and real-time location, she said.