If such a proposal were adopted, collections of data about consumers’ behavior would become more scarce. That would retard competition: Small businesses that could have used that information to target potential customers and compete with larger and better‐established firms would be locked out. Ultimately, that would hurt consumers.
Credit‐reporting agencies burdened with red tape would find it harder to collect data on people’s buying habits and payment practices. That would again hurt consumers, making more of us bear the costs of others’ fraud and making credit harder to get and more expensive.
Indeed, if the privacy restrictions were already law, consumer‐credit reporting might never have developed. We still would be stuck in the days when you could get credit only from a local storekeeper in your home town, and poor people could not get credit at all. New Information‐processing technologies will produce many unforeseen benefits for consumers– business offerings tailored to the needs of diverse customers that no one knew existed before. New privacy restrictions would mean that most of those new ventures would never get off the ground.
Under new privacy restrictions, firms that could afford to send direct mail would no longer be able to target it effectively. That would lead to fewer, more expensive options for those who shop at home because their mobility is restricted– the elderly, the disabled, rural residents and anyone without a car.