An Information Society Approach to Privacy Legislation: How to Enhance Privacy While Maximizing Information Value

Abstract

As we advance in information society, more and more of the wealth created consists of information. Personal data are an important subset of information and are rapidly becoming a premium commodity. Industry and government collect and use these data for purposes such as marketing, statistics and law enforcement. Many believe that personal information is well on its way to becoming one of the most valuable forms of information in our society. The advent of the global communications network raises treatment of personal information to a level of acute significance. Technology provides tools that allow processing of unprecedented masses of information; terabytes of digital data can be stored in hundreds of thousands of databases around the world.They can be replicated instantaneously in unlimited numbers and transmitted worldwide at the press of a button. One of the principal areas of concern is that technology has facilitated aggregation of personal data, i.e. data collected by one source for a certain purpose can be combined with data collected by a different source for a different purpose. All of these developments pose a serious risk to personal privacy. Protection of personal data has emerged as a cutting-edge issue in the new millennium. Most developed countries have passed comprehensive, often quite stringent, legislation to protect privacy of personal data.

In the United States, however, no such legislation has been passed. The existing laws are limited to individual sectors of the economy. Consequently, some form of comprehensive legislation in the area of personal information is inevitable. This paper proposes a combined legal and technological solution to protect privacy in the context of increasing proliferation of personal information. By harnessing the technological capabilities which lie at the root of the problem, greater privacy protection is afforded to the individual, and the value of personal data is maximized for the benefit of both consumer and user.

JEL Classification: O34