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News Release
March 20, 2002
CONTACT: David Fish
(202) 289-8928

FTC Official Counsels Against Severe Privacy Policy 
New Paper Based on Beales' Comments at California Conference

WASHINGTON, D.C. - In a speech at a recent conference co-hosted by the Progress & Freedom Foundation and the Pacific Research Institute, “Regulating Commercial Information: The Consequences for California,” the director of the Federal Trade Commission’s Bureau of Consumer Protection, Howard Beales, urged legislators not to rush toward severe privacy regulations such as the so-called ‘opt-in’ approach. Instead, he urged a more balanced approach, saying that the appropriate use of consumer information is good for “spurring competition, encouraging product improvements, and lower prices.”

His comments are contained in a new Progress on Point paper, “Privacy Notices and the Federal Trade Commissions 2002 Privacy Agenda.”

“The events of September 11 make it clear that privacy is not, and cannot be, an absolute right,” Beales said. “We are willing to make practical compromises between privacy and other desirable goals such as greater security. The same is true in the commercial arena.

“Sharing information offers tremendous benefits, ranging from instant credit approval, to the convenience of a consolidated financial statement, to lower costs of processing transactions,” he continued. “We should not sacrifice such benefits needlessly.”

Citing the questions still surrounding implementation of the annual privacy notice mailings required by the 2001 Gramm-Leach-Bliley Act, Beales said “there remains an enormous amount that we do not know” and that privacy policy “should be carefully crafted to control adverse consequences with the minimum possible impact on the benefits of the information age.”

The goal of privacy notices, Beales said, “should be to help consumers understand what information is collected about them and what is done with that information, not to simply scare consumers into opting out of information sharing.”

The above comments were made on January 24, 2002.

The Progress & Freedom Foundation is a market-oriented think tank that studies the digital revolution and its implications for public policy. It is a 501(c)(3) research & educational organization.



The Progress & Freedom Foundation