Another issue to consider comes down to simple bureaucratic sloth: Mandatory “simplification” efforts means a team of bureaucrats somewhere in this world — in this case in Sacramento, California, I guess — will have to become code cops. Websites and apps will suddenly become subject to a new regulatory regime and all that it entails. So, even if those enterprising trial lawyers don’t get online innovators first, the bureaucrats could make their lives miserable with reams of red tape over time (especially because it would be silly to think that this sort of meddling with end with “simplification” mandates.) That could mean a lot less “permissionless innovation” and many more “Mother May, I?” permissioned proceedings instead.
Further, do we really want such Internet mandates to spring from the state-level? As I noted in my recent essay on “The Perils of Parochial Privacy Policies,” such state-based Internet meddling — even when well-intentioned — could quickly become a confusing morass of over-lapping, contradictory rules. Fifty different state Internet Bureaus aren’t likely to help the digital economy or serve the long-term interests of consumers. It could also open the door to potential Net-meddling on other fronts (online free speech, copyright, cybersecurity, online authentication, etc.) If “simplified” policies can be mandated at the state level for privacy, why not everything else? So, some degree of preemption may be in order here. If the movement of digitized bits across the Net isn’t “interstate commerce,” then I don’t know what is.
Let me close by reiterating that increased notice and transparency in privacy and data collection/use policies is generally a good operational norm. But not every smart norm makes a smart law, and in this case there are some thorny unintended consequences that must be considered when policymakers propose “simplifying” privacy policies via state-based regulatory mandates.
[On a related note, my colleague Jerry Brito brought to my attention this interesting 2011 NPR piece on "Why Are Credit Card Agreements So Long?]