Privacy, Public Goods and the Tragedy of the Trust Commons: A Response to Professors Fairfield and Engel

Abstract

User trust is an essential resource for the information economy. Without it, people will share less of their personal information and the digital economy will falter.

Companies that use personal information do not protect this resource sufficiently. Instead, many take advantage of it for short-term gain. They act in ways that, over time, will damage user trust. In so doing, they harm individuals and undermine their own long-term interests.

Companies behave this way because they face a tragedy of the commons. When they abuse user trust they reap the full benefits of their action but share the costs with the other firms that rely on this resource. Each company, acting rationally, has an incentive to appropriate as much of the trust resource as it can. That is one reason why digital businesses show so little restraint in collecting, analyzing and monetizing personal information.

This behavior poses a longer term risk. User trust, like a fishery, is a partially rivalrous resource. It can withstand a certain level of exploitation and still renew itself. But too much exploitation can cause it to collapse. This Article explores commons-management theory for potential solutions to this impending tragedy of the trust commons.

Keywords: privacy, commons, tragedy of the commons, trust, privacy law, privacy governance, public good,

JEL Classification: A12, D62, D70, H41, K00, K20, K32, L51, O30, Q20