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Capitol Comment

    Capitol Comment 271 - A First Step Into Privacy: Finding a Free Market Perspective in the Constitution

    03/17/2000

    The hottest technology issues in the last Congress revolved around the relationship between the federal government and electronic commerce. Delving a little bit deeper into this relationship, elected officials and regulators alike are concluding that privacy is the next big issue.

    If the sheer volume of initiatives introduced is a measure of interest, state policymakers may have a lead over their federal counterparts. However, if experience is a guide, federal policymakers and candidates will not be left out of the debate. A new congressional caucus; proposed rules from the Federal Trade Commission; and a wary eye from banking, tax, and communications regulators promise to keep the issue – and its many facets – at the center of public debate.

    What is the privacy debate all about? In dissent of the famous 1965 Griswold v. Connecticut case, Supreme Court Justice Hugo Black wrote, "'privacy' is a broad, abstract and ambiguous concept." This is hardly solid ground upon which a myriad of policies can be developed. Privacy might be better understood as the control we have over information about ourselves. From this definition, it is possible to begin an analysis of how privacy works in a market environment and, subsequently, the intersection of individual liberty and public policy.

    There are two fundamental principles about privacy that must be understood at the outset in order to make sense of our laws and a healthy free-market economy:

    Privacy is a condition of the individual. Therefore, it necessarily follows that protection of privacy should rely on the individual’s actions as much as possible. Fortunately, the World Wide Web, encryption, and other advances in information technology promote user-defined technology. In other words, the consumer can be in charge of the look, make, feel, and capabilities of a product or technology, including aspects that affect privacy.
    Privacy can be attained in a marketplace free of coercive mandates. The commonsense application of this principle is that a very different relationship exists between one individual and another individual than between an individual and a government that can use force to implement its will. As such, to the extent that new laws and regulations are developed to provide privacy protections, the focus should be on the relationship between consumers and the government. It is in this area that consumers have the fewest options available to protect themselves.
    The Constitution provides a starting point for privacy policy in a consumer’s life. Most often privacy is associated with the Fourth Amendment protection against unreasonable searches. However, the Constitution also makes a single mention of the term in the Fifth Amendment. Specifically, it reads, “private property may not be taken for public use without just compensation.” But the overall lack of clear and explicit guidance from the Constitution requires privacy analysts to review case law as well.

    Writing for the Supreme Court in Griswold, Justice William Douglas noted that the "various guarantees" found in the Constitution were to "create zones of privacy." If that is so, we must ask: Is banking or medical information in the right "zone?" Likewise, do Internet browsing habits or tax information rise to the level of a "zone of privacy?" Douglas artfully found privacy somewhere in the "penumbras and emanations" of the first ten amendments. Other jurists have looked to the plain contextual meaning of the Ninth Amendment – Justice Arthur Goldberg claimed privacy as an unenumerated right – or 10th Amendment.

    Despite all of the attention and headlines attributed to consumer fears about privacy, it appears that the shaky definition of Justice Black – privacy is broad, abstract and ambiguous – does not help consumers in the electronic, or any other, marketplace. Nevertheless, this vague understanding dominates the debate today.

    Although Justice Black may have been trying to define privacy for individuals, keep in mind that Black also is known for having said,

    "I like my privacy as well as the next one, but I am nevertheless compelled to admit that government has a right to invade it unless prohibited by some specific Constitutional provision."
    This is precisely the type of logic that puts government bureaucrats in charge of sensitive personal information instead of consumers. Government only has as much power as we grant it. The Constitution is a document listing the manner in which we are protected from government, not the other way around. It is also worth noting that it provides little direction about how consumers should relate to one another outside of the public sphere.

    Two points should be remembered when evaluating any new privacy proposal:

    Consumers have a greater incentive than government bureaucrats to develop, maintain, and uphold privacy protections in an open market free from government mandates.
    Because the government holds coercive power over citizens, there must be explicit safeguards as to how, if ever, any personal information collected by government agencies is distributed and used. Market safeguards, such as boycotts and choice among competing organizations, are ineffective against the monopoly powers of government.
    These basic principles and initial questions can keep policymakers on track toward privacy initiatives that promote greater control for individuals over personal information. Simultaneously, these guidelines should provide a stern warning against a grant of unnecessary control over private information to public administrators.