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14 July 1999. TTA.

From: Laura Dykes <LDykes@pacificresearch.org
Date: Wed, 14 Jul 1999 15:57:26 -0700

Embargoed until: July 20, 1999
Contact:  Jennifer Berkowitz
703/237-8575

Market Forces, Not Government Regulations, Will Best Alleviate Internet Privacy Concerns

San Francisco, CA - Avoiding government regulations and instead harnessing the profit incentives driving businesses is the best Internet privacy policy, according to a new study by the Pacific Research Institute for Public Policy (PRI), a California-based think tank.

"A free-market approach to privacy helps consumers protect their privacy, protects the freedom and enterprise that underline the Internet's promising future, and ensures that the U.S. Constitution remains intact," says Justin Matlick, author of Governing Internet Privacy: A Free Market Primer and director of PRI's Center for Freedom and Technology.

The study shows that the most effective strategy to protect Internet privacy would:

* Protect consumer privacy by allowing economic forces to dominate.  Businesses are rapidly responding to alleviate concerns about Internet privacy by enacting privacy policies and by creating and distributing technologies - such as the "platform for privacy preferences" (P3P) - that allow Internet users and web sites to automatically communicate about privacy preferences and practices.

* Leave the legal framework that simultaneously allows for privacy and free speech intact.  A complicated mix of statutes, judicial decisions, constitutional provisions, and legal interpretations already exists to strike the necessary balance between competing constitutional interests while allowing individuals - including Internet users - to exercise varying degrees of control over their personal information. 

* Protect the economic forces driving the Information Age. Government-imposed consumer protection requirements over the Internet, including privacy regulations, would force web sites to bear the costs of implementing these requirements, the costs of complying with them, and the liability costs of noncompliance.  The costs would likely prevent many entrepreneurs from starting online small businesses, would be passed on to consumers in the form of price increases, and would limit the ever expanding choices available to consumers online.

"Until regulation advocates realize the pitfalls of new Internet privacy regulations, it seems likely we will continue marching forward with legislative proposals that will harm consumers, hinder electronic commerce, and set dangerous legal precedents," states Matlick.  "That's a dangerous path to follow, considering what an integral part electronic commerce, the Internet, and telecommunications will be playing in the future of our economy and society."

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The Pacific Research Institute for Public Policy is a non-profit organization dedicated to the promotion of  the principles of individual freedom and personal responsibility.  The Institute believes these principles are best encouraged through policies that emphasize a free economy, private initiative, and limited government.  By focusing on public policy issues such as technology, health care, welfare, education, and the environment, the Institute strives to foster a better understanding of the principles of a free society among leaders in government, academia, the media, and the business community.