Information Privacy in Cyberspace Transactions

Abstract

Cyberspace is the rapidly growing network of computing and communication technologies that have profoundly altered our lives. We already carry out myriad social, economic, and political transactions through cyberspace, and, as the technology improves, so will their quality and quantity. But the very technology that enables these transactions also makes detailed, cumulative, invisible observation of our selves possible. The potential for wide-ranging surveillance of all our cyber-activities presents a serious threat to information privacy. To help readers grasp the nature of this threat, Professor Jerry Kang starts with a general primer on cyberspace privacy. He provides a clarifying structure of philosophical and technological terms, descriptions, and concepts that will help analyze any problem at the nexus of privacy and computing-communication technologies. In the second half of the article, he focuses sharply on the specific problem of personal data generated in cyberspace transactions. The private sector seeks to exploit this data commercially, primarily for database marketing, but many individuals resist. The dominant approach to solving this problem is to view personal information as a commodity that interested parties should contract for in the course of negotiating a cyberspace transaction. But this approach has so far failed to address a critical question: Which default rules should govern the flow of personal information when parties do not explicitly contract about privacy? On economic efficiency and human dignity grounds, Professor Kang argues in favor of a default rule that allows only "functionally necessary" processing of personal information unless the parties expressly agree otherwise. The article concludes with a proposed statute, entitled the Cyberspace Privacy Act, which translates academic theory into legislative practice.

Keywords: Cyberspace, privacy, information privacy, default rules, data mining