Threats To Privacy Highest In History As Data Collection Proliferates

NCPA Study Shows Unwise Regulation Would Harm Consumers

WASHINGTON (April 27, 2001) — Threats to individual privacy have never been greater due to the spread of electronic databases in government, medicine, business and the workplace. However, unwise legislation could destroy many benefits of information sharing for private individuals, according to a new study issued today by the National Center for Policy Analysis (NCPA).

"If we continue to address privacy through vague emotional impulses, we will end up with regulatory overkill. All information technology will be regulated with the same brush that has been used to paint the picture of a privacy crisis," said Solveig Singleton, senior analyst-Competitive Enterprise Institute and author of the study. For example, use of new electronic surveillance technology by law enforcement officers raises questions about privacy limits and Constitutional protections against search and seizure. Without stepping on your property, government agents can:

  • Detect heat from a possible marijuana crop in your basement or activity in your bedroom.
  • Use electronic emissions readers to "read" a computer screen in your home.
  • Use laser beams trained on a windowpane to "listen" to a conversation inside your home.

Another alarming trend is toward larger, more regulatory government at the federal and state level that leads to mass collection of personal information.

  • The federal government alone has hundreds of databases containing information about private citizens, some of which have been criticized for inadequate security.
  • Between 1987 and 1995, the government collected over 77 million bank records, weighing 62 tons.
  • Although collection was to enforce money-laundering laws, only 580 "small fry" were convicted.
  • More than 100,000 reports on innocent citizens were collected for every conviction.

"Government collects information about individuals from tax returns, employers, and bankers," said Singleton. "Since businesses have no Fourth Amendment protection, regulators can go on a fishing expedition looking for illegal activity."

Information gathering also creates the potential for "rogue" government employees to use data for personal ends. More than 500 IRS agents were caught illegally snooping through tax records of thousands of Americans in 1995. Five were fired. After enacting new privacy measures, hundreds more agents were caught in 1997.

Even though risks to privacy are higher from government, Americans typically are more concerned by loss of privacy in the private sector.

  • One survey shows 57 percent of Americans want federal privacy laws for the Internet
  • Another survey reports that 86 percent of those surveyed thought that Internet companies should ask permission before sharing personal information with third parties.
  • 54 percent viewed "cookies" as an invasion of privacy; and only 27 percent agreed that tracking consumers online help improve content and service.

These survey results do not reveal a crisis demanding new laws, however. A survey in 2000 found that 91 percent said they trust companies to follow posted privacy policies much of the time. And Internet users who think the Internet is secure enough for online financial transactions have risen from 34 percent to 45 percent since summer of 2000. In fact, 55 percent of Americans bought something online this holiday season.