The Problem with Privacy

Abstract

Problems with consumer trust and confidence in the Internet as a safe environment in which to shop, browse and associate are well documented, as are the correlations between this lack of consumer trust and fears about privacy and security online. This paper attempts first to show why existing legal and extra-legal modes for the protection of privacy online are failing to protect consumers and promote consumer trust. In particular it critiques the European regime of mandatory data protection laws as outdated and inappropriate to a world of multinational corporatism and ubiquitous transnational data flows via cyberspace. In the second part lessons are drawn from the crisis currently faced by intellectual property in cyberspace, particularly in reference to MP3s and peer-to-peer down- Q1 loading and useful parallels are drawn from the solution devised by William Fisher of the Berkman Centre, Harvard, in the form of an alternative payment scheme for copyright holders. Finally, the insights drawn from Fisher's work are combined with original proposals drawn from a comparison of the consumer-data collector relationship in cyberspace with the roles played by truster, trustee and beneficiary in the institution of common law trust. The resulting 'modest proposal' suggests that a 'privacy tax' be levied on the profits made by data collectors and data processors. This could fund no-fault compensation for identified 'privacy harms', improve public privacy enforcement resources, provide privacy-enhancing technologies to individuals, satisfy the desire of commerce for less data protection-related internal bureaucracy and possibly create the conditions for better promotion of consumer trust and confidence. The uptake of electronic commerce would thus be significantly enhanced.

Keywords: privacy, data protection, data tax, no fault compensation, privacy harms