Putting Consumers First: A Functionality-Based Approach to Online Privacy

36 Pages Posted: 6 Feb 2013

See all articles by Howard Beales

Howard Beales

George Washington University - School of Business

Jeffrey A. Eisenach

NERA Economic Consulting; American Enterprise Institute

Date Written: January 1, 2013

Abstract

U.S. privacy policy has long embraced a functionality-based approach which calibrates privacy protections to the types of information collected and the uses to which it is put. The functionality-based approach targets attention to areas where harm to consumers is most likely to occur, and hence where the potential benefits from oversight are greatest. In its March 2012 report, Protecting Consumer Privacy in an Era of Rapid Change, the Federal Trade Commission expressed concerns about the comprehensiveness of data collected by some online service providers (i.e., “large platform providers,” including internet service providers (ISPs)) and also about whether there is sufficient competition or choice to protect consumers’ interests with respect to privacy practices. Based on those concerns, the Commission discussed the possibility of subjecting some types of business models or technologies to heightened scrutiny or a distinct framework. In this report, we assess the issues raised by the Commission and conclude that they do not justify a departure from a functionality-based framework.

Suggested Citation

Beales, Howard and Eisenach, Jeffrey A., Putting Consumers First: A Functionality-Based Approach to Online Privacy (January 1, 2013). Available at SSRN: https://ssrn.com/abstract=2211540 or http://dx.doi.org/10.2139/ssrn.2211540

Howard Beales

George Washington University - School of Business ( email )

Washington, DC 20052
United States

Jeffrey A. Eisenach (Contact Author)

NERA Economic Consulting

1255 23rd Street, NW, Suite 600
Washington, DC 20037
United States
202-448-9029 (Phone)
202-466-3605 (Fax)

HOME PAGE: http://www.nera.com

American Enterprise Institute ( email )

1150 17th Street, N.W.
Washington, DC 20036
United States

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