Consumer Data Privacy Laws-Functional or Dangerous?

Companies and marketing functions seek access to as much data as possible and have scooped up large swaths of consumer information. Some have argued it has gone too far and others argue that government shouldn't get involved. The problem is that swinging the pendulum one way fails to protect our consumer information (national security risk) or the normal privacies people come to expect and if we swing it wildly the other way companies will likely be upset that its unfair government influence. At present we haven't solved the problem and our current laws are lagging behind technological development. 

An article in the Iowa Law Review entitled, 'Privacy Losses as Wrongful Gains' by Bernard Chao that highlights some of the risks consumers face and the difficulty they have recovering damages if information is lost, stolen or misused. What they indicate is....

"Companies often violate their own privacy policies by selling customer data or by using the information in ways that fall outside their policy. Yet even when there is indisputable misconduct, the law generally does not hold these companies accountable. That is because traditional legal claims are poorly suited for handling privacy losses." (Chao, 2020, para 1). 

We thus run into a problem of information being collected and sold without consumer knowledge and these large data banks often move across the globe with little to no account. That not only creates security risks but it also doesn't help consumers ensure that their information is actually private. It isn't difficult for foreign adversaries who have access to large swaths of data from major companies and government institutions (mostly from hacking) that creates telling profiles of consumers (likely sometimes key officials). 

Yet it is more than that isn't it? Consumers often don't have a clue what information is being collected on them and they also have no idea how its being used. Even when they take the time to understand the process their information may not be used appropriately and can cause them all types of headaches in terms of credit and theft. Having some levels of protection are important. 

Don't get me wrong I'm not against companies coming to understand their customers. However, I am against misleading information, selling that information without disclosures, large data banks, and little consequence if that information is misused and in turn damages either national security or consumers rights. There should be a way to handle this and I think there are a few things we should consider. 

A Couple of Things to Think About:

(Disclaimer: It takes many different opinions to sort of ferret out the most plausible solutions. I'm not the expert but these are just opinions for mental consumption.)

1. Smaller Data Banks: Help avoid theft from hacking.

2. Encryption and Block Chain: Makes it more difficult to collect and understand.

3. Upfront disclosures of Where, Who, When information is sold and options to decline while still receiving services. Helps to put the consumer in control without forcing them to provide information outside of normal security requirements (i.e. banking and account verification). 

4. Civil and legal penalties for misuse of information. When companies take advantage of consumer data there should be civil and legal penalties. The law may need to change.

5. Work with other countries to help protect data. Collecting and cracking down on countries that misuse data is important for protecting overall security of the global business environment.

6. Review of current legislation and update laws regularly in shorter intervals to keep up with technological adjustments. Technology changes much faster than government can understand it. Making sure laws are updated more often is helpful (That also includes removal of outdated laws). 

Chao, B. (2020, para 1). Privacy Losses as Wrongful Gains. Iowa Law Review.

106 Iowa L. Rev. 555. Retrieved 11-30-21 https://ilr.law.uiowa.edu/print/volume-106-issue-2/privacy-losses-as-wrongful-gains/