Should We Trust the Government to Protect Our Online Privacy?

Privacy is logically a matter of individual conscience. It belongs to every individual to decide what he considers part of his private life and how much of it he is willing to expose to others.

When you invite a friend into your home, when you walk in the street, when you post something on the Internet, or when you make an economic transaction, you are releasing some information about you. In other words, social life necessarily involves a breach of privacy, and it is — or should be — up to each individual to decide which trade-off he is willing to make between the benefits of privacy and the benefits of social interaction.

Of course, there are costs to whatever one chooses. One can’t have both the benefits of total privacy and the benefits of total social immersion. Sacrificing some social life in favour of privacy involves a cost; sacrificing some privacy in order to have more of a social life does too. But ultimately, that is a matter for each one of us to decide.

As more and more of our social life seems to be going on in the virtual world of the Internet, this is the kind of fundamental principle that should inform the debate about privacy online. Unfortunately, this as on so many other issues, calls for the government to take this responsibility away and to decide on behalf of all of us have muddled the debate.

For example, there have been more and more attacks on the privacy practices of large IT companies such as Google and Facebook in recent years. Governments are investigating Google for inadvertently collecting data transmitted to its Street View vehicles by unprotected home computer networks. Facebook is also under investigation by the Irish privacy commissioner for the way it uses its customers’ information.

Now, in theory, nobody is forced to deal with Google or Facebook. If you stay inside your home or behind your garden walls, a Google Street View car will never see you. If you refuse to become friends with anyone on Facebook and you don’t post any pictures or information about yourself on the Internet, you will remain mostly invisible in that virtual world.

There may of course be a high cost in avoiding Google, eschewing Facebook, and living as a recluse, but there is also a cost (a privacy cost) in making the opposite choice and trying, for example, to have as many friends and social connections as possible.

Some people seem to think that individuals are not wise enough to make these choices, and that somebody has to decide for them and impose the same trade-off on everybody. I prefer to think that any individual, in matters concerning his own life, is wiser than anybody else. And that there is usually a way to solve these matters without recourse to government intervention.

For example, private companies do have incentives to be careful with their customers’ data. Indeed, they usually have elaborate privacy policies. Google blurs faces and licence plate numbers from its street views, and you can ask them to delete more. This would be the case even without the threat of government intervention. Facebook bowed to pressure from users and privacy advocates and made various changes to simplify its privacy settings and allow less information to be shared and searched on its pages.

Any private supplier can only use or request information from his customers up to the point where the marginal benefit for him stops outweighing the cost of bad publicity and the loss of unhappy customers. Free markets provide their own checks and balances, especially when hundreds of potential competitors are lurking.

It is simply not possible to have everything — both to force companies to guarantee total privacy, and to have efficient social networks and information to which advertisers and investors will continue to flock. If somebody disagrees with that assessment, he is quite free to go and create the next search engine or social network, and use none of his customers’ data. Good luck!

These views may seem unconventional in today’s debates, but they are not exactly far-fetched or original. I am simply proposing to rely mostly on private choices when dealing with privacy issue, something that should be obvious and logical. This is in opposition to the reigning ‘public,’ that is, government approach to this problem.

There is indeed a great paradox here. The very governments which have built large databases with information that they legally force individuals to provide, which have created ID papers and systems that make individuals continuously traceable — these very governments are now harassing private companies that offer benefits in exchange for voluntarily giving up some privacy (or giving up privacy that is impossible to protect in an advanced society). Who will watch the watchdog?

General legal rules are certainly necessary to facilitate life in society. But there is no place, in a free society, for bureaucrats and politicians to impose their uniform vision of privacy. Let every individual take care of his own privacy, and make the trade-offs he chooses. Let companies compete for offering consumers different mixes of privacy and other benefits. And let’s accept that, contrary to the public view of privacy, there is no panacea in politicians and government bureaucrats making such decisions for everybody.

Michel Kelly-Gagnon is President and CEO of the Montreal Economic Institute.