Are Privacy Policies Informational or Ideological?
33 Pages Posted: 23 Aug 2017
Date Written: August 17, 2017
Consumer privacy is predominantly regulated through disclosure. The Federal Trade Commission (FTC) strongly urges American businesses to notify consumers about their privacy practices, and the agency is considering requiring “just-in-time” disclosure that would make these notices more salient and aggressive. American law contains many mandated disclosure rules, and they fall along a spectrum. Some disclosures are indisputably good policy because they alert consumers about material risks that all would agree are bad, such as product warnings about latent dangers of physical harm. These long-accepted “informational” disclosures are compatible with the compelled speech doctrine of the First Amendment. Other mandated disclosures are arguably poor policy because they mislead consumers and cause foreseeable overreactions. For example, mandated disclosures about the presence of mercury in vaccines, about the foreign origins of products, or about raw correlations between depression and abortion technically consist of factual statements. Nevertheless, they should be treated as “ideological” disclosures running afoul of the compelled speech doctrine.
Much less is known about mandated disclosures that fall in the middle of the range, between clearly informational and clearly ideological disclosures. Mandatory privacy disclosures seem to fall in this middle range. These disclosures do not have the virtue of alerting consumers to risks because they concern attributes that consumers do not consistently see as positive or negative. Some disclosures are useful for preference matching where consumers value a product more after learning about an attribute, while others value it less. Some disclosures are useless, meaning that consumers informed about the attribute do not change their valuation at all. These middle range disclosures may be wasteful, but they are not fraudulent or distortive. How should the First Amendment treat the laws that mandate disclosure about these attributes? This essay presents a theory and practical instrument for distinguishing between informational and ideological mandated disclosures, and shows that at least some of the privacy policies required by law are constitutionally suspect.
Keywords: First Amendment, torts, privacy, internet law
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