The commodification of information and the control of expression

The author suggests that the tendency of legal systems to treat information as property is creating threats to expression, particularly in the areas of copyright and privacy. Article by Professor Fred H. Cate (Professor of law and Ira C. Batman Faculty Fellow at the Indiana University School of Law – Bloomington) based on his lecture given at the IALS on 15 May 2002. Published in Amicus Curiae - Journal of the Institute of Advanced Legal Studies and its Society for Advanced Legal Studies. The Journal is produced by the Society for Advanced Legal Studies at the Institute of Advanced Legal Studies, University of London

The Impact of Opt-In Privacy Rules on Retail Credit Markets: A Case Study of MBNA

U. S. privacy laws are increasingly moving from a presumption that consumers must object to ( opt out of) uses of personal data they wish to prohibit to a requirement that they must explicitly consent ( opt in ) to uses they wish to permit. Despite the growing reliance on opt-in rules, there has been little empirical research on their costs. This Article examines the impact of opt-in on MBNA Corporation, a diversified, multinational financial institution. The authors demonstrate that opt-in would raise account acquisition costs and lower profits, reduce the supply of credit and raise credit card prices, generate more offers to uninterested or unqualified consumers, raise the number of missed opportunities for qualified consumers, and impair efforts to prevent fraud. These costs would be incurred despite the fact that as of the end of 2000, only about two percent of MBNA\u27s customers had taken advantage of existing voluntary opportunities to opt out of receiving MBNA\u27s direct mail marketing offers. If Congress were to adopt opt-in laws applicable to financial information, the impact across the economy on consumers and businesses would be significant

The Changing Face of Privacy Protection in the European Union and the United States

Among the wide variety of national and multinational legal regimes for protecting privacy, two dominant models have emerged, reflecting two very different approaches to the control of information. The European Union has enacted a sweeping data protection directive that imposes significant restrictions on most data collection, processing, dissemination, and storage activities, not only within Europe, but throughout the world if the data originates in a member state. The United States has taken a very different approach that extensively regulates government processing of data, while facilitating private, market-based initiatives to address private sector data processing. Under the EU data protection directive, information privacy is a basic human right; the failure of the U.S. legal system to treat it as such offends European values and has led the EU to threaten to suspend information flows to the United States. This threat is understandable in light of the directive\u27s treatment of privacy as a human right, and necessary if the privacy of European nationals is to be protected effectively in a global information economy. In the United States, however, the government is constitutionally prohibited under the First Amendment from interfering with the flow of information, except in the most compelling circumstances. The EU data protection directive is plainly contrary to that constitutional maxim, and the suggestion that the directive should be extended to the United States exacerbates that conflict, as well as threatens U.S. leadership in information technologies and services. This Article examines the expanding conflict and emerging compromises between the European Union and the United States over data protection. After describing each of the legal regimes and the principles that undergird them, the article concludes by addressing the conflict between those principles, current political efforts to minimize that conflict, and the inadequacies of both systems in the context of the Internet

The Technological Transformation of Copyright Law

Both statutory and case law clearly recognize the constitutional interest in promoting, not restricting, expression. Digital technologies, however, are rapidly changing the application of copyright law to prohibit access, protect ideas and facts, and dramatically expand the monopoly granted to copyright holders. Whether on a disk or network, digital expression cannot be accessed without being copied into computer memory, as well as onto a hard drive, floppy disk, or magnetic tape if it is to be retained after the computer is switched off. This necessarily violates the exclusive right to reproduce that copyright law grants to copyright holders. Moreover, to read or otherwise view digital expression on a computer screen, or to listen to it through computer speakers, the digital work must be displayed or performed, within the meaning of copyright law. If that digital expression was downloaded from a computer network, the display or performance is public and violates the copyright holder\u27s exclusive rights to publicly display and perform her copyrighted work. In short, the very nature of the new technological environment causes current copyright law to protect facts and ideas, not merely expression. The law restricts subsequent use of those facts and ideas without the copyright holder\u27s permission by forbidding access altogether. The technology is turning the law on its head. Rather than acting to counteract this technological transformation, federal regulators are seeking to codify it into law. This article examines the technological transformation of copyright law and recommends a renewed focus on the constitutional mandate to tailor the monopoly conveyed by copyright law to the incentive necessary for creation and dissemination. In the digital information context, this would require amending or interpreting the law to prevent its use as a barrier to public access to information and to return it to its constitutional origins

Principles of Internet Privacy

The definition of privacy developed by Brandeis and Warren and Prosser, and effectively codified by Alan Westin in 1967 - the claim of individuals, groups, or institutions to determine for themselves when, how, and to what extent information about them is communicated to others - worked well in a world in which most privacy concerns involved physical intrusions (usually by the government) or public disclosures (usually by the media), which, by their very nature, were comparatively rare and usually discovered. But that definition\u27s exclusive focus on individual control has grown incomplete in a world in which most privacy concerns involve data which we inevitably generate in torrents as go through our lives in an increasingly computerized, networked environment, and which can be collected and used by virtually anyone, usually without us knowing anything about it. Few of us have the awareness and expertise to consider trying to control all of the data we generate, few of us have the time or, frankly, even the incentive to attempt to do so, and the sheer volume of data, variety of sites where they are collected and used, and economic incentive for doing so would make the attempt laughably futile. This is not to suggest that individual control should not be part of our understanding of privacy, but rather that it can no longer reasonably be considered the only part. This article identifies principles that should undergird the government\u27s efforts to protect privacy and craft privacy norms, and then contrast the application of those principles in particular settings identified by Professor Paul Schwartz in his article Internet Privacy and the State