NCPA - National Center for Policy Analysis

Cato Institute Study: Regulating Business Databases

January 22, 1998

In a recent study, a Cato Institute analyst expressed skepticism over proposals to require businesses to ask for a consumer's permission before trading information about that individual. Personal information often includes buying habits and hobbies.

Author Solveig Singleton recommends that privacy concerns center on government data collection, rather than private collection.

Here are some of the points made in the study:

  • Requiring permission of the consumer would work to the disadvantage of small, startup businesses, since larger, established firms already know who their customers are and the nature of their needs.
  • There is little reason to fear the growth of private-sector databases, since the information collected aims only to sell more merchandise.
  • Government databases, on the other hand, are inherently dangerous since they involve the exercise of police and defense functions.
  • Cordoning off information behind a wall of new privacy rights violates principles of free speech -- threatening to shrink the total domain of freely-flowing information.


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