A Framework for Benefit-Cost Analysis in Digital Privacy Debates
51 Pages Posted: 16 Aug 2013
Date Written: August 14, 2013
This article argues that benefit-cost analysis ("BCA") is extremely challenging in online child safety and digital privacy debates, yet it remains essential that analysts and policymakers attempt to conduct such reviews. While we will never be able to perfectly determine either the benefits or costs of online safety or privacy controls, the very act of conducting a regulatory impact analysis ("RIA") will help us to better understand the trade-offs associated with various regulatory proposals.
However, precisely because those benefits and costs remain so remarkably subjective and contentious, the paper argues that we should look to employ less-restrictive solutions -- education and awareness efforts, empowerment tools, alternative enforcement mechanisms, etc. -- before resorting to potentially costly and cumbersome legal and regulatory regimes that could disrupt the digital economy and the efficient provision of services that consumers desire. This model has worked fairly effectively in the online safety context and can be applied to digital privacy concerns as well.
The article is organized as follows. Part I examines the use of BCA by federal agencies to assess the utility of government regulations. Part II considers how BCA can be applied to online privacy regulation and the challenges federal officials face when determining the potential benefits of regulation. Part III then elaborates on the cost considerations and other trade-offs that regulators face when evaluating the impact of privacy-related regulations. Part IV discusses alternative measures that can be taken by government regulators when attempting to address online safety and privacy concerns. This article concludes that policymakers must consider BCA when proposing new rules but also recognize the utility of alternative remedies such as education and awareness campaigns, to address consumer concerns about online safety and privacy.
Keywords: Regulation, data, analysis, BCA, benefit, cost, review, Privacy, law, rights, reputation, free, speech, Europe, data, protection, default, regulation, FTC, online, digital, tech, technology, aggregation, education, empowerment, enforcement, information, control, Commerce, do not track, deceptive
JEL Classification: M3, L86, L88, L5, L2, K13
Suggested Citation: Suggested Citation