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    NCC's Privacy Group Cautions Against Hasty Pledges That May Harm Consumers

    02/11/2001
    on 2/11/01.

    Several members of the National Consumer Coalition's (NCC) Privacy Group today expressed concern at the rush to endorse the Federal Trade Commission's so-called "Fair Information Practice Principles" ("FIPPs"). Lawmakers who pledge fidelity to this agenda are essentially promising to limit consumer choice and the free flow of information and to regulate the burgeoning Internet economy, passing costs on to consumers.
    The FIPPs, as well as a call for federal information regulation is encompassed in a "Privacy Pledge" distributed today by groups calling themselves The Privacy Coalition. The NCC members believe signing this pledge would be a mistake, and cite some of the problems with the "Fair Information Practices" concepts:
    "Notice": Requiring Web sites to post a privacy policy concerning how information is collected and used is, at best, unnecessary. Consumers concerned about their privacy can and do already choose to avoid sites that don't post this information. Producing the required legalese, meanwhile, would impose high costs on online vendors, which would either pass costs on to consumers, or in the case of smaller businesses, price them out of the market, thereby reducing consumer choice.
    "Consent": Decreeing that customers must be able to "opt-out" or must affirmatively "opt-in" to information collection practices also places cost burdens which are passed on to consumers in the form of higher prices and fewer choices. Consumers already can and should choose with whom they want to share personal information online.
    "Access" and "Security": Forcing commercial sites to allow customers access to the information collected about them and the opportunity to change, correct or delete that information would be complicated and costly to merchants and consumers alike. Just as troubling is that access and a fourth principle, security, are at odds. Requiring companies to keep accessible personal information about consumers online leaves the information that much more susceptible to dissemination via both error and hacker.
    The federal government can best protect individual and consumer privacy by keeping a tight rein on its own extensive surveillance and information-swapping practices, and by forsaking the temptation to mandate further collection of consumer information by a national Internet sales-tax scheme or other means.
    Consumers particularly concerned about privacy can and should make use of free and pay services to anonymize their online activities and stay abreast of the policies of Web sites with which they choose to do business (the P3P standards set to go online later this year should make this even easier). The National Consumer Coalition trusts consumers, not Congress, to decide for themselves which privacy practices best serve their individualized needs. The only thing federal dictats can do for consumers is raise costs and limit choice.
    Citizen, consumer, and policy groups of the NCC Privacy Group:
    -- Citizens Against Government Waste (www.cagw.org)
    -- Citizens for a Sound Economy (www.cse.org)
    -- Competitive Enterprise Institute (www.cei.org)
    -- Consumer Alert (www.consumeralert.org)