FC: Why is government not held responsible for privacy woes?

[Declan McCullagh <declan@well.com>]

[From the Independence Institute in Colorado (not to be confused with the 
Independent Institute in California)... --Declan]


  OF PRACTICES BEHIND PROMISES...
   By Mike Krause

This month, the New York Attorney General’s office announced the settlement 
of a 30-month, 10 state investigation into the privacy practices of the 
online advertising company Double-Click. Besides paying the states nearly 
half a million dollars for investigative costs, and another nearly $2 
million in legal fees to settle a separate class action suit, the company 
is required, among other things, to disclose its online tracking activities 
in the privacy policies of web sites that profile their users and submit to 
an independent review of its practices and policies.

  All in all, the company paid a pretty steep price in time, money and 
reputation for engaging in predatory privacy shenanigans, that when they 
were disclosed, had citizens, privacy advocates and politicians howling for 
blood.

So, when are the various government agencies that routinely invade, 
intrude, demand and then trample on the privacy of Americans, going to be 
held to a similar standard?

In announcing the settlement, New York’s Attorney General stated, “It’s 
hard for consumers to trust e-commerce when they can’t see the practices 
behind the promises.”  A fair enough claim, yet shouldn’t the same standard 
apply to government privacy practices?

More so than banks and credit bureaus, or even online advertisers, 
government is simply the worst protector of privacy, or as Congressman Dick 
Armey (R-TX) puts it: “The most intrusive force in the lives of Americans.” 
Government is also, as Mr. Armey continues, “The biggest privacy offender.” 
For example, we routinely hand over every scrap of financial information 
about ourselves to the Internal Revenue Service.  Not out of choice, but 
rather as a matter of law.  A recent audit of the IRS by Treasury officials 
(kind of a fox guarding the other foxes sort of thing) found that the 
tax-collecting agency has lost or misplaced 2,332 desktop computers and 
servers containing taxpayer information over the last three 
years.  Moreover, the report found “a material weakness in inventory 
controls” every year since 
1983.  (http://www.wired.com/news/0,1294,49615,00.html)

Similarly, according to a scathing General Accounting Office (GAO) report 
released in May 2001 stated, “We demonstrated that unauthorized 
individuals, both internal and external to IRS, could have viewed and 
modified electronically filed taxpayer data on IRS computers. For example, 
we were able to access a key electronic filing system using a common 
handheld computer.”
DoubleClick’s problems arose several years ago when it was disclosed that 
they were planning to linkup-without any meaningful consent- web surfing 
and online buying habits with individual identifying information, in other 
words build a database of who you are, what you buy and what sites you 
peruse and use.  As a result, DoubleClick got deservedly slammed.  Their 
stock price tanked, editorial scribblers condemned the practice and clients 
quickly distanced themselves from the company.  DoubleClick themselves beat 
a hasty retreat.  In other words, long before the recent settlement, 
DoubleClick was swiftly punished by both the marketplace and consumer 
sentiment.

And what of the IRS?  Senator Charles Grassley (R-IA), the ranking 
Republican on the Senate Finance Committee threatened to hammer the IRS’ 
budget, “The IRS wouldn’t accept from a taxpayer the non-answer it has 
given regarding the 2,300 computers…just as a taxpayer would be held 
accountable for missing receipts, so must the IRS be held accountable…”

Well, don’t hold your breath.  It's one thing for the government to punish 
a private business, but quite another to actually do something about 
itself.  The fact is, as long as the lions' share of tax dollars comes from 
the income tax and as long as there are over a trillion and a half dollars 
to be collected and spent by politicians (such as Mr. Grassley), there will 
be an IRS, it will be predatory in nature and the congress will keep it so.
Businesses like DoubleClick want your data and invade your privacy because 
their clients desperately want to sell us their goods and services. As 
consumers in a land of amazing choices, we can either utilize that to our 
benefit or tell them to get stuffed.  And when they cross the line, both 
the market and the law may well punish them.

Government on the other hand collects your data and invades your privacy 
without benefit of choice.  If you don’t want to comply, men with guns will 
force you.  Since government is a growth industry, and since the first and 
foremost rule of any bureaucracy is to protect and expand itself, the 
priority of a bureaucrat is the collection of data on citizens, rather than 
to protect the privacy of the citizens to whom the data relate.

The net result is that in terms of making choices that affect their 
privacy, Americans are more empowered as consumers in the marketplace than 
as citizens of a country founded on liberty.

Quoted in "Dependent on D.C.", the must read book on how the government 
grows, Law Professor Paul Swartz makes the case “Americans no longer know 
how their personal information will be applied, who will gain access to it 
and what decisions will be made with it…Individuals whose personal data are 
shared, processed and stored by a mysterious bureaucracy will be more 
likely to act as the government wishes them to act.”




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