Category: Privacy

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When Love’s Promises Are Fulfilled By the U.S. Supreme Court

Today, in a 5-4 decision, the United States Supreme recognized the fundamental nature of love’s promises. In Obergefell et al. v. Hodges, the Court held,  “the Fourteenth Amendment requires a State to license a marriage between two people of the same sex and to recognize a marriage between two people of the same sex when their marriage was lawfully licensed and performed out-of-State.”  Referring to marriage as a “keystone” of the U.S.’s “social order,” Justice Kennedy declared same-sex marriage bans unconstitutional. Importantly, the case makes clear that forcing gay couples to go across state lines to marry only to deny them the franchise after returning home undermines fundamental principles of liberty.

It’s no surprise that Professor Martha Ertman’s powerful book: Love’s Promises: How Formal and Informal Contracts Shape All Kinds of Families on which she copiously and beautifully toiled while rearing her son debuts the summer that equality in marriage becomes a fundamental right for gay men and women. Nor should anyone be surprised if the book, along with the decision itself, becomes a central text at universities and beyond. In what David Corn calls a “love letter to marriage,” from the pen of Justice Kennedy, the Court reasoned:

“No union is more profound than marriage, for it embodies the highest ideals of love, fidelity, devotion, sacrifice, and family. In forming a marital union, two people become something greater than once they were. As some of the petitioners in these cases demonstrate, marriage embodies a love that may endure even past death. It would misunderstand these men and women to say they disrespect the idea of marriage. Their plea is that they do respect it, respect it so deeply that they seek to find its fulfillment for themselves. Their hope is not to be condemned to live in loneliness, excluded from one of civilization’s oldest institutions. They ask for equal dignity in the eyes of the law. The Constitution grants them that right.“

With that, the Supreme Court overruled the prior judgement of the Court of Appeals for the Sixth Circuit and set in gear the reversal of centuries’ worth of stigma, shame and inequality, which may not erase overnight, but overtime will ease. Professor Ertman might also suggest that by the decision, the Court resituates contracts too. That is to say, if viewed from the lens of contracts, which serves as the core, theoretical foundation of Love’s Promises, this decision recognizes a fundamental right in contract for gay men and women. Further, the case expands the “contract” franchise to include gay women and men.

Some scholars approach gay marriage primarily from the constitutional liberties encapsulated in the 14th Amendment, upholding equal protection for U.S. citizens regardless of their status, others approach the issue as a matter of privacy. For Professor Ertman, contracts offer an additional lens and much to deliberate about on matters of marriage, parenting, and familial intimacy. Professor Ertman’s writings on contract (The Business of Intimacy,  What’s Wrong With a Parenthood Market?, and Reconstructing Marriage to name a few) precede the book, and presaged its birth.

Here for example, in a passage from Chapter Eight, she explains that “[i]t takes two more trips to the lawyer’s office to hammer out terms that satisfy Karen, Victor, the attorney, and me, from lawyerly technicalities to the emotional terms we call “mush.” From what started out as an addendum to Victor’s and my coparenting agreement has blossomed into a bouquet of wills and powers of attorney, alongside the amended parenting agreement.” She tells readers, “On the way downstairs, clutching documents still warm from the copying machine, Karen squeezes my hand, as if she too feels that signing all those dotted lines brought a family into being every bit as much as vows of forever that we plan to recite…” As she explains, “if you scratch the surface of marriage—straight or gay—you’ll find contracts there, too.”

Professor Ertman urges us to remember time and again that what builds relationships and sustains them are the formal and informal contracting that take place daily in marriage; they establish the foundation for marriage and what comes after. She works diligently in the book to demonstrate love too undergirds contracts. That is to say, she wants readers to reimagine contracts—not as the products of cold, calculated bargaining or business arrangements—though one must acknowledge contracts can be that too—even in marriage.  Often marriage is the product of love, intimacy, and warm innocence.  At other times, it is the product of business arrangements.  It was that too in the U.S. chattel system: contracts that gave legal sufficiency to the buying, selling, bartering, and even destroying of slaves, including children (among them the Black biological offspring of slave owners). In light of that history yet to be fully explored and appreciated in law, it is a formidable task to resituate or reintroduce contract in the space of families and intimacy. However, Professor Ertman rises to that challenge.

Like it or not, contracts pervade marriage and suffuse premarital agreements. Sometimes contracting in this regard attempts to resituate power and status expost marriage, providing the economically weaker spouse economic stability after the breakup. Martha highlights cases from that of Catherine Simeone who received a “raw deal,” to those of celebrities, including Michael Douglas and Beyonce. Who knew that Beyonce would receive $5 million for “each of their children,” if she and Shawn Carter (otherwise known as Jay-Z) divorced? Professor Ertman might argue that despite the businesslike nature of contracts, these legal arrangements and agreements make most matters clearer for everybody. Professor Ertman explains that contracts and even verbal agreements provide information, they can provide context, and they offer choice.

In Ertman’s life, it was a contract that bestowed her wife, Karen, parenthood of their child—not something biological, legislative, or derived from courts. And she offers multiple reasons for readers to consider the salience of contracts in intimacy, including voluntariness, reciprocal promises, and equal status. She offers an additional reason: love’s promises.

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5 Great Novels About Privacy and Security

I am a lover of literature (I teach a class in law and literature), and I also love privacy and security, so I thought I’d list some of my favorite novels about privacy and security.

I’m also trying to compile a more comprehensive list of literary works about privacy and security, and I welcome your suggestions.

Without further ado, my list:

Franz Kafka, The Trial

Kafka’s The Trial begins with a man being arrested but not told why. In typical Kafka fashion, the novel begins badly for the protagonist . . . and then it gets worse! A clandestine court system has compiled a dossier about him and officials are making decisions about him, but he is left in the dark. This is akin to how Big Data can operate today. The Trial captures the sense of helplessness, frustration, and powerlessness when large institutions with inscrutable purposes use personal data and deny people the right to participate. I wrote more extensively about how Kafka is an apt metaphor for privacy in our times in a book called The Digital Person about 10 years ago.

Franz Kafka The Trial

 

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Why empowering consumers won’t (by itself) stop privacy breaches

Thanks to CoOp for inviting me to guest blog once again. As with my other academic contributions, the views expressed here are my own and don’t necessarily reflect those of my employers past or present.

buyer-bewareWho bears the costs of privacy breaches? It’s challenging enough to articulate the nature of privacy harms, let alone determine how the resulting costs should be allocated. Yet the question of “who pays” is an important, unavoidable, and in my view undertheorized one. The current default seems to be something akin to caveat emptor: consumers of services — both individually as data subjects and collectively as taxpayers — bear most of the risks, costs, and burdens of privacy breaches. This default is reflected, for example, in legal rules that place high burdens on consumers seeking legal redress in the wake of enterprise data breaches and liability caps for violations of privacy rules.

Ironically, the “consumer pays” default may also (unwittingly) be reinforced in well-meaning attempts to empower consumers. This has been one of the unintended consequences of decades of advocacy aiming to strengthen notice and consent requirements. These efforts take it for granted that data subjects are best-positioned to make effective data privacy and security decisions, and thus reinforce the idea that data subjects should bear the ultimate costs of failures to do so. (After all, they consented to the use!). And while notice and consent are still the centerpiece of every regulator’s data privacy toolbox, there’s reason to doubt that empowering consumers to make more informed and granular privacy decisions will reduce the incidence or the costs of privacy breaches.

Read More

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Does Scholarship Really Have an Impact? The Article that Revolutionized Privacy Law

Does scholarship really have an impact? For a long time, naysayers have attacked scholarship, especially scholarship about law. U.S. Supreme Court Chief Justice Roberts once remarked: “Pick up a copy of any law review that you see, and the first article is likely to be, you know, the influence of Immanuel Kant on evidentiary approaches in 18th Century Bulgaria, or something.” He noted that when the academy addresses legal issues at “a particularly abstract, philosophical level . . . they shouldn’t expect that it would be of any particular help or even interest to the members of the practice of the bar or judges.” Judge Harry Edwards also has attacked legal scholarship as largely irrelevant.

Critics are quick to point out that much legal scholarship is not cited much — and many articles are never even cited by anyone other than the authors themselves in subsequent works.

But I think that a lot can be learned from the story of one of the most influential law articles of all. That article was Samuel D. Warren & Louis D. Brandeis, The Right to Privacy, 4 Harvard Law Review 193 (1890).

Brandeis Right to Privacy 02

Warren and Brandeis discussed how journalism was becoming more sensationalistic: “Gossip is no longer the resource of the idle and of the vicious, but has become a trade, which is pursued with industry as well as effrontery.” And they expressed concern about a new technology they called “instantaneous photograph[y.]” — the new smaller and cheaper cameras being marketed by the Eastman Kodak Company that made it possible for candid photos to be taken.

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FAN 53 (First Amendment News) Justice Sotomayor joins in discussion of Burt Neuborne’s New Book (“Madison’s Music”)

[My colleague Anthony Kennedy’s] approach to [the First Amendment], unlike some of my other colleagues,  is born on a very, very, almost fanatical belief that . . . the essence of democracy is no regulation of speech. Justice Sonia Sotomayor (March 13, 2015)

How could the pie get much sweeter? I mean, who among us is so fortunate as to have a sitting Supreme Court Justice travel to discuss a book we have just published?

Answer: Professor Burt Neuborne.

It is as rare as it is true — on March 13, 2015 Justice Sonia Sotomayor ventured to New York University Law School to join with Dean Trevor Morrison to discuss (for one hour or so) Neuborne’s Madison’s Music: On Reading the First Amendment (The New Press, 2015).  

Burt Neuborne, left, Sonia Sotomayor, & Trevor Morrison

Professor Burt Neuborne, left, Justice Sonia Sotomayor, & Dean Trevor Morrison

As it turned out, the pie did get sweeter when Justice Sotomayor first praised and then commented  on  Madison’s Music: “It’s a fun book for someone who’s not immersed in the law,” she said. “It’s so well written that I heard Burt’s voice in my head as I was reading it. I consider that the highest of compliments to an author.”

Later she asked: “You say that the focus of the First Amendment is democracy. You invite your thesis as a different way of interpreting the Constitution. So who decides what promotes democracy? People disagree about it all the time. How do you define democracy? Is it something like one person, one vote? What are its structures?”

Neuborne: “I’m sort of shocked that you asked that, because it’s clear that I define it,” he said jokingly, to audience laughter. “But Sotomayor prevailed with the wry rejoinder, ‘No, no, no, you forget, I do,’ “prompting an eruption of mirth and applause.”

“I don’t know what will be the final denouement of a judicial discussion about whether unlimited campaign spending is the best way to have a good democracy or a bad democracy,” Neuborne added. “But I would rather have judges asking that question among themselves than pretending to decide the case by deciding what seven words mean — ‘Congress shall make no law abridging speech’ — and having it be sort of automatic, without even thinking about the consequences for democracy.”

When Neuborne took issue with the Roberts Court’s campaign finance line of cases, Justice Sotomayor asked: “How does a Madisonian judge strike on balance [when it comes to those] laws?” To which Neuborne replied: “Great question.” He then proceeded to discuss cases going back to Buckley v. Valeo (1976) and up to the Court’s latest rulings in this area. He took pointed exception to the Court’s “narrow, bribery, quid quo pro definition of corruption.”

Speaking in a very animated way, Neuborne was equally critical of the Court’s notion (one that “I genuinely . . . don’t understand”) that “contributions can create a risk of corruption because you give the money directly to a candidate, but the unlimited spending of money, without coordination with the candidate, doesn’t create a risk of corruption . . . .” He thought that citizens and judges alike need to ask themselves: “What kind of democracy are we trying to protect here?”

Returning more directly to his answer to Justice Sotomayor’s question, Neuborne remarked: “Everybody’s political power should be equal in a democracy, and money shouldn’t corrupt that idea. . . . I think if they adopted a Madisonian reading of the First Amendment  we would change campaign financing regulation overnight.”

Neuborne on Justice Anthony Kennedy

[Justice Kennedy is] the most important First Amendment Judge that has ever sat on the Supreme Court. . . . 

Federal Judges Get Free Book

At the outset of his remarks Professor Neuborne thanked his publisher, The New Press, “a non-profit press that remembers the responsibility of a truly free press in placing new and challenging ideas before the public, and who has helped in making the book available both to every federal judge and in donating the books outside [here today] for you.” 

There is much more, about democracy, free speech, substantive due process, the Second, Third, and Ninth Amendments, media corporations, partisan gerrymandering, and the rule of unelected judges. See video of the event here.

I will be doing a Q&A with Professor Neuborne concerning his new book, the First Amendment, and other things that matter to those in the First Amendment community (divided as it is).

On Corporations: Point – Counterpoint 

 Adam Liptak, “First Amendment, ‘Patron Saint’ of Protesters, Is Embraced by Corporations,” NYT, March 23, 2015

Damon Root, “The New York Times, a Corporation, Worries That the First Amendment Is Now ‘Embraced by Corporations,'” Reason.com, March 24, 2015

Amanda Shanor

Amanda Shanor

“Adam Smith’s First Amendment” — DC Circuit Comes Under Fire

That is the title of a new essay by Robert Post and Amanda Shanor, one that appears in the Harvard Law Review Forum. What troubles the authors is the “recent and aggressive expansion of commercial speech doctrine,” one that they argue has resulted in a “striking turn in our constitutional order.”

The essay was prompted by a decision by the Court of Appeals for the District of Columbia in a case named Edwards v. District of Columbia (2014). (Ms Shanor, a Yale PhD in law candidate and a Yale Law School graduate, is a former law clerk to Judges Judith Rogers (2012-2013) and to Cornelia T.L. Pillard (2013-2014) of the Court of Appeals for the D.C. Circuit.) Read More

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The Complete Posner on Posner Series

The Posner on Posner series began on November 24, 2014 and ended with the Afterword on January 5, 2015. Below is a hyperlinked list of all the posts.

 Table of Contents

  1. The Maverick – A Biographical Sketch of Judge Richard Posner: Part I
  1. The Maverick – A Biographical Sketch of Judge Richard Posner: Part II, The Will to Greatness
  1. The Man Behind the Robes — A Q & A with Richard Posner
  1. The Judge & Company – Questions for Judge Posner from Judges, Law Professors & a Journalist
  1. On Legal Education & Legal Scholarship — More questions for Judge Posner
  1. On Free Expression & the First Amendment — More questions for Judge Posner
  1. On Privacy, Free Speech, & Related Matters – Richard Posner vs David Cole & Others
  1. On Judicial Reputation: More questions for Judge Posner
  1. Posner on Same-Sex Marriage – Then & Now
  1. Posner on Case Workloads & Making Judges Work Harder
  1. The Promethean Posner – An Interview with the Judge’s Biographer
  1. Afterword: Posner at 75 – “It’s My Job”

→ Forthcoming: Richard Posner (Oxford University Press, Spring, 2015) by William Domnarski.

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On Privacy, Free Speech, & Related Matters – Richard Posner vs David Cole & Others

I’m exaggerating a little, but I think privacy is primarily wanted by people because they want to conceal information to fool others. Richard Posner

Privacy is overratedRichard Posner (2013)

 Much of what passes for the name of privacy is really just trying to conceal the disreputable parts of your conduct. Privacy is mainly about trying to improve your social and business opportunities by concealing the sorts of bad activities that would cause other people not to want to deal with you.Richard Posner (2014)

This is the seventh installment in the “Posner on Posner” series of posts on Seventh Circuit Judge Richard Posner. The first installment can be found here, the second here, the third here, the fourth here, the fifth here, and the sixth one here.

Privacy has been on Richard Posner’s mind for more than three-and-a-half decades. His views, as evidenced by the epigraph quotes above, have sparked debate in a variety of quarters, both academic and policy. In some ways those views seem oddly consistent with his persona – on the one hand, he is a very public man as revealed by his many writings, while on the other hand, he is a very private man about whom we know little of his life outside of the law save for a New Yorker piece on him thirteen years ago.

On the scholarly side of the privacy divide, his writings include:

  1. The Right of Privacy,” 12 Georgia Law Review 393 (1978)
  2. Privacy, Secrecy, and Reputation,” 28 Buffalo Law Review 1 (1979)
  3. The Uncertain Protection of Privacy by the Supreme Court,” 1979 Supreme Court Review 173
  4. The Economics of Privacy,” 71 The American Economic Review 405 (1981)
  5. Privacy,” Big Think (video clip, nd)
  6. Privacy is Overrated,” New York Daily News, April 28, 2014

For a sampling of Judge Posner’s opinion on privacy, go here (and search Privacy)

(Note: Some links will only open in Firefox or Chrome.)

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Privacy – “What’s the big deal?”

Privacy interests should really have very little weight when you’re talking about national security. The world is in an extremely turbulent state – very dangerous. — Richard Posner (2014)

Recently, Georgetown Law Center held a conference entitled “Cybercrime 2020: The Future of Online Crime and Investigations” (full C-SPAN video here). In the course of that event, Judge Posner joined with others in government, private industry, and in the legal academy to discuss privacy, the Fourth Amendment, and free speech, among other things. A portion of the exchange between Judge Posner and Georgetown law professor David Cole was captured on video.

Judge Richard Posner

Judge Richard Posner

Scene: The Judge sitting in his office, speaking into a video conference camera — As he rubbed his fingers across the page and looked down, Posner began: “I was thinking, listening to Professor Cole, what exactly is the information that he’s worried about?” Posner paused, as if to setup his next point: “I have a cell phone – iPhone 6 – so if someone drained my cell phone, they would find a picture of my cat [laughter], some phone numbers, some e-mail addresses, some e-mail texts – so what’s the big deal?”

He then glanced up from the text he appeared to be reading and spoke with a grin: “Other people must have really exciting stuff. [laughter] Could they narrate their adulteries or something like that?” [laughter] He then waved his hands in the air before posing a question to the Georgetown Professor.

“What is it that you’re worrying about?” Posner asked as if truly puzzled.

At that point, Cole leaned into his microphone and looked up at the video screen bearing the Judge’s image next to case reports on his left and the American flag on his right.

Cole: “That’s a great question, Judge Posner.”

Professor Cole continued, adding his own humor to the mix: “And I, like you, have only pictures of cats on my phone. [laughter] And I’m not worried about anything from myself, but I’m worried for others.”

On a more substantive note, Cole added: “Your question, which goes back to your original statement, . . . value[s] . . . privacy unless you have something to hide. That is a very, very shortsighted way of thinking about the value [of privacy]. I agree with Michael Dreeben: Privacy is critical to a democracy; it is critical to political freedom; [and] it is critical to intimacy.”

The sex video hypothetical

And then with a sparkle in his spectacled eye, Cole stated: “Your question brings to mind a cartoon that was in the New Yorker, just in the last couple of issues, where a couple is sitting in bed and they have video surveillance cameras over each one of them trained down on the bed [Cole holds his hands above his head to illustrate the peering cameras]. And the wife says to the husband: ‘What are you worried about if you’ve got nothing to hide, you’ve got nothing to fear.’”

Using the cartoon as his conceptual springboard, Cole moved on to his main point: “It seems to me that all of us, whether we are engaged in entirely cat-loving behavior, or whether we are going to psychiatrists, or abortion providers, or rape crises centers, or Alcoholics Anonymous, or have an affair – all of us have something to hide. Even if you don’t have anything to hide, if you live a life that could be entirely transparent to the rest of the world, I still think the value of that life would be significantly diminished if it had to be transparent.”

Without missing a beat, Cole circled back to his video theme: “Again you could say, ‘if you’ve got nothing to hide, and you’re not engaged in criminal activity, let’s put video cameras in every person’s bedroom. And let’s just record the video, 24/7, in their bedroom. And we won’t look at it until we have reason to look at it. You shouldn’t be concerned because . . .’”

At this point, Posner interrupted: “Look, that’s a silly argument.”

Cole: “But it’s based on a New Yorker cartoon.”

The Judge was a tad miffed; he waved his right hand up and down in a dismissive way: “The sex video, that’s silly!Waving his index finger to emphasize his point, he added: “What you should be saying, [what] you should be worried about [are] the types of revelation[s] of private conduct [that] discourage people from doing constructive things. You mentioned Alcoholics Anonymous . . .”

Cole: “I find sex to be a constructive thing.”

Obviously frustrated, Posner raised his palms up high in protest: “Let me finish, will you please?”

Cole: “Sure.”

Posner: “Look, that was a good example, right? Because you can have a person who has an alcohol problem, and so he goes to Alcoholics Anonymous, but he doesn’t want this to be known. If he can’t protect that secret,” Posner continued while pointing, “then he’s not going to go to Alcoholics Anonymous. That’s gonna be bad. That’s the sort of thing you should be concerned about rather than with sex videos. . . . [The Alcoholics Anonymous example] is a good example of the kind of privacy that should be protected.”

David Cole

Professor David Cole

Privacy & Politics 

Meanwhile, the audience listened and watched on with its attention now fixed on the Georgetown professor.

Cole: “Well, let me give you an example of sex privacy. I think we all have an interest in keeping our sex lives private. That’s why we close doors into our bedroom, etc. I think that’s a legitimate interest, and it’s a legitimate concern. And it’s not because you have something wrong you want to hide, but because intimacy requires privacy, number one. And number two: think about the government’s use of sex information with respect to Dr. Martin Luther King. They investigated him, intruded on his privacy by bugging his hotel rooms to learn [about his] affair, and then sought to use that – and the threat of disclosing that affair – to change his behavior. Why? Because he was an active, political, dissident fighting for justice.”

“We have a history of that,” he added. “Our country has a history of that; most countries have a history of that; and that’s another reason the government will use information – that doesn’t necessarily concern [it] – to target people who [it is] concerned about . . . – not just because of their alcohol problem [or] not just because of their sexual proclivities – but because they have political views and political ideas that the government doesn’t approve of.”

At this point the moderator invited the Judge to respond.

Posner: “What happened to cell phones? Do you have sex photos on your cell phones?”

Cole: “I imagine if Dr. Martin Luther King was having an affair in 2014, as opposed to the 1960s, his cell phone, his smart phone, would have quite a bit of evidence that would lead the government to that affair. He’d have call logs; he might have texts; he might have e-mails – all of that would be on the phone.”

The discussion then moved onto the other panelists.

Afterwards, and writing on the Volokh Conspiracy blog, Professor Orin Kerr, who was one of the participants in the conference, summed up his views of the exchange this way:

“I score this Cole 1, Posner 0.”

The First Amendment — Enter Glenn Greenwald Read More

European Parliament Resolution on Google

The European Parliament voted 384 – 174 today in favor of a “resolution on Supporting Consumer Rights in the Digital Single Market.” The text of the resolution:

Stresses that all internet traffic should be treated equally, without discrimination, restriction or interference, independently of its sender, receiver, type, content, device, service or application;

Notes that the online search market is of particular importance in ensuring competitive conditions within the Digital Single Market, given the potential development of search engines into gatekeepers and their possibility of commercialising secondary exploitation of obtained information; therefore calls on the Commission to enforce EU competition rules decisively, based on input from all relevant stakeholders and taking into account the entire structure of the Digital Single Market in order to ensure remedies that truly benefit consumers, internet users and online businesses; furthermore calls on the Commission to consider proposals with the aim of unbundling search engines from other commercial services as one potential long-term solution to achieve the previously mentioned aims;

Stresses that when using search engines, the search process and results should be unbiased in order to keep internet search non-discriminatory, to ensure more competition and choice for users and consumers and to maintain the diversity of sources of information; therefore notes that indexation, evaluation, presentation and ranking by search engines must be unbiased and transparent, while for interlinked services, search engines must guarantee full transparency when showing search results; calls on Commission to prevent any abuse in the marketing of interlinked services by operators of search engines;

Some in the US tech press has played this up as an incipient effort to “break up” Google, with predictable derision at “technopanic.” (Few tend to reflect on whether the 173 former firms listed here really need to be part of one big company.) But the resolution’s linking of net and search neutrality suggests other regulatory approaches (prefigured in my 2008 paper Internet Nondiscrimination Principles: Commercial Ethics for Carriers and Search Engines). I’ve developed these ideas over the years, and I hope my recently released book‘s chapters on search and digital regulation will be of some use to policymakers. Without some regulatory oversight and supervision, our black box society will only get more opaque.

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Should the FTC Be Regulating Privacy and Data Security?

This post was co-authored with Professor Woodrow Hartzog.

This past Tuesday the Federal Trade Commission (FTC) filed a complaint against AT&T for allegedly throttling the Internet of its customers even though they paid for unlimited data plans. This complaint was surprising for many, who thought the Federal Communications Commission (FCC) was the agency that handled such telecommunications issues. Is the FTC supposed to be involved here?

This is a question that has recently been posed in the privacy and data security arenas, where the FTC has been involved since the late 1990s. Today, the FTC is the most active federal agency enforcing privacy and data security, and it has the broadest reach. Its fingers seem to be everywhere, in all industries, even those regulated by other agencies, such as in the AT&T case. Is the FTC going too far? Is it even the FTC’s role to police privacy and data security?

The Fount of FTC Authority

The FTC’s source of authority for privacy and data security comes from some specific statutes that give the FTC regulatory power. Examples include the Children’s Online Privacy Protection Act (COPPA) where the FTC regulates online websites collecting data about children under 13 and the Gramm-Leach-Bliley Act (GLBA) which governs financial institutions.

But the biggest source of the FTC’s authority comes from Section 5 of the FTC Act, where the FTC can regulate “unfair or deceptive acts or practices in or affecting commerce.” This is how the FTC has achieved its dominant position.

Enter the Drama

Until recently, the FTC built its privacy and security platform with little pushback. All of the complaints brought by the FTC for unfair data security practices quickly settled. However, recently, two companies have put on their armor, drawn their swords, and raised the battle cry. Wyndham Hotels and LabMD have challenged the FTC’s authority to regulate data security. These are more than just case-specific challenges that the FTC got the facts wrong or that the FTC is wrong about certain data security practices. Instead, these challenges go to whether the FTC should be regulating data security under Section 5 in the first place. And the logic of these challenges could also potentially extend to privacy as well.

The first dispute involving Wyndham Hotels has already resulted in a district court opinion affirming the FTC’s data protection jurisprudence. The second dispute over FTC regulatory authority involving LabMD is awaiting trial.

In the LabMD case, LabMD is contending that the U.S. Department of Health and Human Services (HHS) — not the FTC — has the authority to regulate data security practices affecting patient data regulated by HIPAA.

With Wyndham, and especially LabMD, the drama surrounding the FTC’s activities in data protection has gone from 2 to 11. The LabMD case has involved the probable shuttering of business, a controversial commissioner recusal, a defamation lawsuit, a House Oversight committee investigation into the FTC’s actions, and an entire book written by the LabMD’s CEO chronicling his view of the conflict. And the case hasn’t even been tried yet!

The FTC Becomes a Centenarian

And so, it couldn’t be more appropriate that this year, the FTC celebrates its 100th birthday.

To commemorate the event, the George Washington Law Review is hosting a symposium titled “The FTC at 100: Centennial Commemorations and Proposals for Progress,” which will be held on Saturday, November 8, 2014, in Washington, DC.

The lineup for this event is really terrific, including U.S. Supreme Court Justice Steven Breyer, FTC Chairwoman Edith Ramirez, FTC Commissioner Joshua Wright, FTC Commissioner Maureen Ohlhausen, as well as many former FTC officials.

FTC 03 GW

Some of the participating professors include Richard Pierce, William Kovacic, David Vladeck, Howard Beales, Timothy Muris, and Tim Wu, just to name a few.

At the event, we will be presenting our forthcoming article:

The Scope and Potential of FTC Data Protection
83 George Washington Law Review (forthcoming 2015)

So Is the FTC Overreaching?

Short answer: No. In our paper, The Scope and Potential of FTC Data Protection, we argue that the FTC not only has the authority to regulate data protection to the extent it has been doing, but it also has the authority to expand its reach much more. Here are some of our key points:

* The FTC has a lot of power. Congress gave the FTC very broad and general regulatory authority by design to allow for a more nimble and evolutionary approach to the regulation of consumer protection.

* Overlap in agency authority is inevitable. The FTC’s regulation of data protection will inevitably overlap with other agencies and state law given the very broad jurisdiction in Section 5, which spans nearly all industries. If the FTC’s Section 5 power were to stop at any overlapping regulatory domain, the result would be a confusing, contentious, and unworkable regulatory system with boundaries constantly in dispute.

* The FTC’s use of a “reasonable” standard for data security is quite reasonable. Critics of the FTC have attacked its data security jurisprudence as being too vague and open-ended; the FTC should create a specific list of requirements. However, there is a benefit to mandating reasonable data security instead of a specific, itemized checklist. When determining what is reasonable, the FTC has often looked to industry standards. Such an approach allows for greater flexibility in the face of technological change than a set of rigid rules.

* The FTC performs an essential role in US data protection. The FTC’s current scope of data protection authority is essential to the United States data protection regime and should be fully embraced. The FTC’s regulation of data protection gives the U.S. system of privacy law needed legitimacy and heft. Without the FTC’s data protection enforcement authority, the E.U. Safe Harbor agreement and other arrangements that govern the international exchange of personal information would be in jeopardy. The FTC can also harmonize discordant privacy-related laws and obviate the need for new laws.

* Contrary to the critics, the FTC has used its powers very conservatively. Thus far, the FTC has been quite modest in its enforcement, focusing on the most egregious offenders and enforcing the most widespread industry norms. The FTC should push the development of the norms a little more (though not in an extreme or aggressive way).

* The FTC can and should expand its enforcement, and there are areas in need of improvement. The FTC now sits atop an impressive body of jurisprudence. We applaud its efforts and believe it can and should do even more. But as it grows into this role of being the data protection authority for the United States, some gaps in its power need to be addressed and it can improve its processes and transparency.

The FTC currently plays the role as the primary regulator of privacy and data security in the United States. It reached this position in part because Congress never enacted comprehensive privacy regulation and because some kind of regulator was greatly needed to fill the void. The FTC has done a lot so far, and we believe it can and should do more.

If you want more detail, please see our paper, The Scope and Potential of FTC Data Protection. And with all the drama about the FTC these days, please contact us if you want to option the movie rights.

Cross-posted on LinkedIn

Reining in the Data Brokers

I’ve been alarmed by data brokers’ ever-expanding troves of personal information for some time. My book outlines the problem, explaining how misuse of data undermines equal opportunity. I think extant legal approaches–focusing on notice and consent–put too much of a burden on consumers. This NYT opinion piece sketches an alternate approach:

[D]ata miners, brokers and resellers have now taken creepy classification to a whole new level. They have created lists of victims of sexual assault, and lists of people with sexually transmitted diseases. Lists of people who have Alzheimer’s, dementia and AIDS. Lists of the impotent and the depressed.

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Privacy protections in other areas of the law can and should be extended to cover consumer data. The Health Insurance Portability and Accountability Act, or Hipaa, obliges doctors and hospitals to give patients access to their records. The Fair Credit Reporting Act gives loan and job applicants, among others, a right to access, correct and annotate files maintained by credit reporting agencies.

It is time to modernize these laws by applying them to all companies that peddle sensitive personal information. If the laws cover only a narrow range of entities, they may as well be dead letters. For example, protections in Hipaa don’t govern the “health profiles” that are compiled and traded by data brokers, which can learn a great deal about our health even without access to medical records.

There’s more online, but given the space constraints, I couldn’t go into all the details that the book discloses. I hope everyone enjoys the opinion piece, and that it whets appetites for the book!