Your Internet Privacy Should Be Up For Sale

[Commentary] Internet companies collect abundant information about people’s online activity. They use this information to determine people’s interests and shopping profiles, and then make money by selling personalized “behavioral” ads. The Federal Communications Commission is not too happy about this barter in people’s information.

It cannot regulate the likes of Google and Facebook (they are not communications companies), but it is proposing new rules that would apply to companies that come under its purview – Internet providers like Comcast, Verizon, and AT&T. One of the proposed regulations is entirely unobjectionable but also entirely useless. It would require better disclosure to consumers: the FCC wants every Internet company to clearly explain to people what information it collects and sells.

Disclosure is a great idea, but it has a fatal flaw. It doesn’t work. Do you know anyone who ever reads the fine print? Recognizing, perhaps, that disclosure is unlikely to budge the data collection meter, the FCC is setting its sights on more ambitious regulation. It wants to shut down a budding new market in which people pay for more privacy. Privacy, the FCC thinks, should not be for sale. There is something that rings hollow and paternalistic in the privacy-is-not-only-for-the-rich battle cry. Of all the things that wealthy people can buy, privacy and freedom from tailored ads are low on the wish list of low-income folks.

[Omri Ben-Shahar is Kearney Director of the Coase-Sandor Institute for Law and Economics at the University of Chicago Law School]