Yet another hearing on privacy issues has been slated for this coming Wednesday, March 16th. This latest one is in the Senate Commerce Committee and it is entitled “The State of Online Consumer Privacy.” As I’m often asked by various House and Senate committee staffers to help think of good questions for witnesses, I’m listing a few here that I would love to hear answered by any Federal Trade Commission (FTC) or Dept. of Commerce (DoC) officials testifying. You will recall that both agencies released new privacy “frameworks” late last year and seem determined to move America toward a more “European-ized” conception of privacy regulation. [See our recent posts critiquing the reports here.] Here are a few questions that should be put to the FTC and DoC officials, or those who support the direction they are taking us. Please feel free to suggest others:
- Before implying that we are experiencing market failure, why hasn’t either the FTC or DoC conducted a thorough review of online privacy policies to evaluate how well organizational actions match up with promises made in those policies?
- To the extent any sort of internal cost-benefit analysis was done internally before the release of these reports, has an effort been made to quantify the potential size of the hidden “privacy tax” that new regulations like “Do Not Track” could impose on the market?
- Has the impact of new regulations on small competitors or new entrants in the field been considered? Has any attempt been made to quantify how much less entry / innovation would occur as a result of such regulation?
- Were any economists from the FTC’s Economics Bureau consulted before the new framework was released? Did the DoC consult any economists?
- Why do FTC and DoC officials believe that citing unscientific public opinions polls from regulatory advocacy organizations serves as a surrogate for serious cost-benefit analysis or an investigation into how well privacy policies actual work in the marketplace?
- If they refuse to conduct more comprehensive internal research, have the agencies considered contracting with external economists to build a body of research looking into these issues (as the Federal Communications Commission did in a decade ago in its media ownership proceeding)?
- Has either agency attempted to determine consumer’s “willingness to pay” for increased privacy regulation?
- More generally, where is the “harm” and aren’t there plenty of voluntary privacy-enhancing tools out there that privacy-sensitive users can tap to shield their digital footsteps, if they feel so inclined?
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