Database nation: the upside of "zero privacy"

Warren and Brandeis's article brings into sharp relief the tension between privacy and free speech. In the 114 years since the essay was published, privacy has become a remarkably wiggly and fluid notion, encompassing the right to an abortion or contraception, the right to be free of telemarketers and Internet cookies, and the right to keep government goons out of your home.

A cornerstone of the American approach to information flows in the private sector is that in general they strongly favor free speech over privacy. With a few exceptions, the default assumption for data exchanges is an "opt-out" standard, under which information you provide to a company is theirs to use unless you say otherwise. Under an "opt-in" standard, by contrast, the data are to be kept private unless you explicitly give your permission. Defaults are important: Research from the Columbia Business School suggests that people tend not to change the options they have been presented.

The European Union has adopted a general opt-in rule aimed at damming the flow of information. Known as the European Data Directive, the European rule says personal information generally may not be "processed" without the subject's unambiguous consent.

As you might expect, the European rule has run head on into the law of unintended consequences, and the results have hurt activists as well as consumers. Jacob Palme, a professor of computer science at Stockholm University, has documented how Sweden's implementation of the European directive has imperiled free speech. Swedish regulators prevented American Airlines from transferring customer information from Europe to its SABRE reservation system in the United States. Regulators prosecuted an animal rights activist who published a list of fur producers and a consumer activist who criticized a large bank on a Web page that named the bank's directors. "Looking at the way the law is used," Palme concludes, "one can see that unpopular or controversial opinions are suppressed."

Nevertheless, at the prodding of pro-regulation privacy activists, the U.S. has veered in the same direction in the last few years. "The question is, 'Is information being used in a way that has social utility?'" says Chris Hoofnagle, legislative counsel for the Electronic Privacy Information Center in Washington, D.C. "If it's simply done to profit-maximize, there are questions about whether consumers are really getting the benefit. We're searching for a framework of protections very similar to the E.U. privacy directive that regulates the collection and use of information across all contexts rather than the piecemeal approach we currently have."

By guaranteeing freedom of speech, the First Amendment to the U.S. Constitution poses an obstacle to laws that interfere with the free flow of information. The U.S. Supreme Court has struck down some ordinances that required opt-in consent, including a law enacted by the city of Struthers, Ohio, that banned uninvited door-to-door solicitations and a federal law that required affirmative consent from recipients of communist propaganda.