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No. 295

January 22, 1998

Policy Analysis

PRIVACY AS CENSORSHIP

A Skeptical View of Proposals to

Regulate Privacy in the Private Sector

by Solveig Singleton

Solveig Singleton (formerly Solveig Bernstein) is director of

information studies at the Cato Institute.

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 con-

sumer 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 dispro-

portionately 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 databas-

es.  Governments seek not merely to sell merchandise but to

exercise police and defense functions.  Because governments

claim these unique and dangerous powers, we restrict govern-

ments' access to information in order to prevent abuses.

Privacy advocates miss the target when they focus on the