Internet Giants as Quasi-Governmental Actors and the Limits of Contractual Consent

Abstract

Although the government’s data-mining program relied heavily on information and technology that the government received from private companies, relatively little of the public outrage generated by Edward Snowden’s revelations was directed at those private companies. We argue that the mystique of the Internet giants and the myth of contractual consent combine to mute criticisms that otherwise might be directed at the real data-mining masterminds. As a result, consumers are deemed to have consented to the use of their private information in ways that they would not agree to had they known the purposes to which their information would be put and the entities (including the federal government) with whom their information would be shared. We also call into question the distinction between governmental actors and private actors in this realm, as the Internet giants increasingly exploit contractual mechanisms to operate with quasi-governmental powers in their relations with consumers. As regulators and policymakers focus on how to better protect consumer data, we propose that solutions that rely upon consumer permission adopt a more exacting and limited concept of the consent required before private entities may collect or make use of consumer’s information where such uses touch upon privacy interests.

Keywords: privacy, contract, wrap contracts, consent, Internet, cyberlaw, consumer

JEL Classification: K10, K12, K19