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Via a Twitter post this morning, privacy lawyer Stephen Kline (@steph3n) brings to my attention this new California bill that “would require the privacy policy [of a commercial Web site or online service] to be no more than 100 words, be written in clear and concise language, be written at no greater than an 8th grade reading level, and to include a statement indicating whether the personally identifiable information may be sold or shared with others, and if so, how and with whom the information may be shared.”

I’ve always been interested in efforts — both on the online safety and digital privacy fronts — to push for “simplified” disclosure policies and empowerment tools. Generally speaking, increased notice and simplified transparency in these and others contexts is a good norm that companies should be following. However, as I point out in a forthcoming law review article in the Harvard Journal of Law & Public Policy, we need to ask ourselves whether the highly litigious nature of America’s legal culture will allow for truly “simplified” privacy policies. As I note in the article, by its very nature, “simplification” likely entails less specificity about the legal duties and obligations of either party. Consequently, some companies will rightly fear that a move toward more simplified privacy policies could open them up to greater legal liability. If policymakers persist in the effort to force the simplification of privacy policies, therefore, they may need to extend some sort of safe harbor provision to site operators for a clearly worded privacy policy that is later subject to litigation because of its lack of specificity. If not, site operators will find themselves in a “damned if you do, damned if you don’t” position: Satisfying regulators’ desire for simplicity will open them up to attacks by those eager to exploit the lack of specificity inherent in a simplified privacy policy.

Another issue to consider comes down to simple bureaucratic sloth: Continue reading →

There’s a movement afoot in Congress to advance legislation that would eviscerate the Commerce Clause of the Constitution, empower a state-based tax cartel, and potentially decimate the Internet economy in the process.  Business Week has the details:

In the next week, legislators are expected to introduce bills in the House and Senate promising to do away with the “physical presence” requirement. If a bill passes — and that’s a big “if” — it would require all online retailers, except for the tiniest companies, to collect sales taxes in the 23 states that are part of the Streamlined Sales Tax Project. The states would compensate the retailers for the trouble, while promising not to sue them for tax collection mistakes that are made.

The Streamlined Sales Tax Project, or “SSTP”, sounds good in theory but would be disastrous in practice.   Michael Graham of the Boston Herald penned an editorial about the SSTP today and he does a nice job pointing out why, when it comes to “tax simplification,” the devil is always in the details and those details are typically anything but “simple” (or taxpayer-friendly for that matter).

The real danger of the SSTP, however, is what it means for the Constitution and tax competition among the states.  In this 2003 paper I penned with Veronique de Rugy for the Cato Institute, we showed why the SSTP would not only fail to simplify the sales tax code, but would actually cede dangerous taxing powers to state and local governments over the interstate marketplace.  In the process, Veronique and I argued, a multi-state sales tax cartel would be spawned: Continue reading →