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Home > Privacy and Business > Online Privacy > "Consumer Confidence" Regulation as Corporate Welfare

"Consumer Confidence" Regulation as Corporate Welfare

One of the most common refrains heard from advocates of government privacy regulation is that such regulations will promote consumer confidence in the Internet and e-commerce. This is certainly an attractive refrain; most everyone is in favor of consumer confidence. How we get these things, however, is another question.

There are several multi-billion dollar companies, and thousands of up-and-comers that have powerful economic interests in consumer confidence. As more consumers feel safe with the Internet, these companies will have more and more visitors and customers. They will have millions and millions more dollars in profits, and billions and billions more dollars in market capitalization.

With all this corporate wealth depending on consumer confidence, why would it be the job of government to spend taxpayer dollars on fostering consumer confidence? Of all the wonders of the Internet, this may be the greatest.

There is a clear unity of interest between online businesses and their potential customers. Businesses want to provide a safe and pleasant online experience; consumers want to have one. It is odd that government should be asked to step in and make consumer confidence happen. With the Internet economy growing at a high rate, it is a wonder that there needs to be government action to increase the rate of growth even further.

Having governments set privacy policies in order to foster consumer confidence hearkens to the days of centralized, national industrial policies. Internet businesses are well-equipped to foster consumer confidence and, more importantly, it is their responsibility. Hard-working American taxpayers should not be asked to pay taxes to support regulations and government programs that grow the profits of some of the biggest corporations. The consumer confidence justification for online privacy regulation is little more than a search for New-Economy corporate welfare.


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[updated 9/4/00]

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