Should the Snowden revelations about domestic and foreign electronic spying by the U.S. government change the debate about business collection of consumer data? In a July 26 speech, FTC Commissioner Julie Brill linked the news of NSA spying with concerns about consumer privacy. “Americans are now more aware than ever of how much their personal data is free-floating in cyberspace, ripe for any data miner – government or otherwise – to collect, use, package, and sell.”
Commissioner Brill went on to say that “ it took Snowden to make concrete” that “firms or governments or individuals, without our knowledge or consent, and often in surprising ways, may amass private information about us to use in a manner we don’t expect or understand and to which we have not explicitly agreed. “
Yet we must point out that despite the effort of Brill and others to link the two, the sort of data collection undertaken by Internet companies is very different than electronic spying by government agencies. The former is in most cases a market-based exchange, where personal data is voluntarily supplied by consumers in return for free services.
True, there are many aspects of the consumer data marketplace which could be handled much better, including more transparency by data brokers about how the data collected is being used. Moreover, as businesses continue to innovate in the data-driven economy, more issues will arise–including security and identify theft–that require rapid response by both companies and regulators.
Still, the process of data collection by businesses is fundamentally being driven by innovation and consumer choice. In a competitive market, the best way for companies to obtain data is to give consumers products and services that they want in exchange. We see the free flow of private data as fueling the rapid pace of innovation in the tech sector, both creating jobs and improving our lives in both the short-term and the long-term.
By comparison, most instances of data collection by the government—running from economic statistics to tax returns to electronic spying–are fundamentally nonvoluntary. Ideally all such activities have significant social and economic benefits—knowing the unemployment rate guides public and private decisions, the information on tax returns is key to the revenue system that funds government programs, and electronic spying has helped prevent terrorist attacks. Indeed, as progressives we note that the government has a central role in collecting and disseminating data, at a low cost, which is useful to everyone.
The real lesson of the Snowden revelations is not that big data is bad and therefore we should more intensively regulate businesses that use it. Rather, the increased ability of the government to track ordinary individuals, even for well-intentioned reasons, conjures up visions of 1984-type dystopias. If we are concerned with privacy, we should start by paying more attention to government data collection, where there are fewer checks and balances than in the private sector.
