Policy Analysis No. 295

Privacy as Censorship: A Skeptical View of Proposals to Regulate Privacy in the Private Sector

By Solveig Singleton
January 22, 1998

Executive Summary

Some privacy advocates urge the adoption of a new legal regime for the transfer of information about consumers among private-sector databases. This “mandatory opt-in” regime would require private businesses to ask for a consumer’s permission before trading information about that consumer, such as his buying habits or hobbies, to third parties. This would, in effect, create new privacy rights.

These new rights would conflict with our tradition of free speech. From light conversation, to journalism, to consumer credit reporting, we rely on being able to freely communicate details of one another’s lives. Proposals to forbid businesses to communicate with one another about real events fly in the face of that tradition.

New restrictions on speech about consumers could disproportionately hurt small businesses, new businesses, and nonprofits. Older, larger companies have less need for lists of potential customers, as they have already established a customer base.

We have no good reason to create new privacy rights. Most private-sector firms that collect information about consumers do so only in order to sell more merchandise. That hardly constitutes a sinister motive. There is little reason to fear the growth of private-sector databases.

What we should fear is the growth of government databases. Governments seek not merely to sell merchandise but to exercise police and defense functions. Because governments claim these unique and dangerous powers, we restrict governments’ access to information in order to prevent abuses. Privacy advocates miss the target when they focus on the growth of private-sector databases.

Read the Full Policy Analysis

Solveig Singleton (formerly Solveig Bernstein) is director of information studies at the Cato Institute.