Christopher Savage is an alpha telecom attorney in DC whose name at times has been floated as a possible candidate for FCC Chairman. I've known Chris since the middle of the last decade, and have admired his creative, tough, good-humored, sensible and engaging approaches to pretty much everything.
Here's the abstract of Chris' paper:
Privacy interests arise from relationships of trust: people share information with those they trust and conceal things from those they don’t. Trust grows when it is respected and diminishes if it is betrayed. Firms in the online ecosystem need consumers to trust them, so the consumers keep coming online, being surveilled, viewing ads, and buying things. But those same entities make money by exploiting consumer trust—using the information they gain to develop individualized profiles that facilitate advertising that gets people to buy things they may not really want or need, at individualized rather than generally available prices. Trust and, thus, privacy, is therefore best viewed as a common-pool resource for the online ecosystem to manage, not as a commodity exchanged in a market between consumers and sellers. The common-pool resource model explains why online entities have incomprehensible privacy policies, why they accept regulation by the Federal Trade Commission, and why they recognize the seriousness of data breaches even as they reject any obligation to compensate consumers when a breach occurs. This model also clarifies the nature of the ongoing economic and political conflict between consumers and online entities about pervasive surveillance and the use of targeted ads. Market-based models, by contrast, do not fit these realities and, as a result, there is no reason to think that “market forces” will optimally equilibrate consumer and seller interests. Some modest regulatory correctives are therefore advisable.
And here's the Conclusion:
Market forces do not protect consumer privacy interests in the online economic ecosystem. Instead, this ecosystem is best conceived as a commons, in which consumer trust (from which privacy interests arise) is the managed common-pool resource—with online entities, aided by the FTC, acting as the commons managers. The choice of model matters. In the market model of privacy, whatever terms of engagement emerge between consumers and online entities regarding privacy and surveillance come with at least a weak presumption of optimality—that is, that they reflect a fair balancing of consumer and seller interests. In the commons model, however, there is no reason to think that the interests of consumers (whose level of trust is the common-pool resource) are being optimally balanced against those of sellers. Again, the economic objective of the commons managers is not to protect privacy; it is to surveil consumers, and use the data thus gleaned to make it easier to sell things—many of which, of course, consumers want, but others of which they would do better to do without. In this situation, there are some genuine and ongoing conflicts between consumers and the online ecosystem in which consumers increasingly spend time and money, conflicts that we cannot expect market forces to fairly equilibrate or optimize. In light of all this, we should consider some modest public education and regulatory efforts, outlined above. These proposals would begin both to address the information asymmetry problems and to empower consumers to enjoy online content, and transact business online, without having to sacrifice undue amounts of their privacy or their money.
The paper is 67 pages and 33,475 words long, so basically it's a book.
I look forward to reading and discussing it. If there is interest here, I can also invite Chris in to participate, or at least see if he's game.
Doc