News Releases
news coverage
News Media
PFF Highlights
News Release
January 24, 2002
CONTACT: David Fish
(202) 289-8928

Study Says "Opt-In" Legislation will Cost Californians Billions
Columbia Experts Release Findings at Privacy Conference

WASHINGTON, D.C. - A new study by two Columbia University experts is warning Californians they will pay significantly more for mortgages, consumer credit, and other goods and services if restrictive “opt-in” privacy legislation under consideration in Sacramento becomes law. Charities and the state treasury will also experience losses, the study concludes.

The study, The Hidden Costs of Privacy: The Potential Economic Impact of “Opt-In” Data Privacy Laws in California, was released today by its lead author, Peter A. Johnson, Ph.D., at a San Francisco conference on privacy co-sponsored by the Pacific Research Institute (PRI) and the Progress & Freedom Foundation (PFF). The study focuses on the financial services, charitable, and non-store retailing sectors of the California economy. The conference keynote speaker was J. Howard Beales, Director of the Federal Trade Commission’s Bureau of Consumer Protection.

“Opt-in restrictions on third-party data sharing would likely cost California consumers, employees, and taxpayers several billion dollars,” Johnson said. “In addition, such restrictions would cost California charities $1.57 billion in revenue lost to programs.

“The California tax base would likely be reduced by $2.1 billion within several years, as mortgage interest payments under a restrictive information regime would be several billion dollars higher than they would be under a less restrictive one,” he added. “Employment in the construction industry alone would be reduced by thousands of jobs as new home sales were lost.”

Because these costs reflect only the specific sectors included in his study, Johnson says the total impact of restrictive privacy regulations on the California economy would be even larger.

Other studies showcased at the conference included The Impact of Data Restrictions on Charitable Institutions, by Michael A. Turner, Ph.D., Executive Director, Information Services Executive Council (ISEC), and Consumer Privacy: A Free Choice Approach, by Sonia Arrison, Director of the Center for Technology Studies at the Pacific Research Institute.

The Pacific Research Institute is a public policy think tank in San Francisco that has published a number of articles on consumer privacy. The Progress & Freedom Foundation studies the impact of the digital revolution and its implications for public policy, and has conducted extensive research on issues relating to privacy and the regulation of commercial information. Both are non-profit, non-partisan, 501(c)(3) organizations.



The Progress & Freedom Foundation