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Home > Privacy and Business > Opt-In, Opt-Out, or Something Else

Opt-In, Opt-Out, or Something Else

Privacy advocates and pundits are enamored with the current debate about "opt-in" and "opt-out" information practices.

In general business practice today, either party to a transaction is free to share information derived from the transaction (for lawful purposes, of course). "Opt-out" is when businesses give consumers an opportunity to refuse sharing of information about themselves. It is good customer service to offer consumers an opt-out, but it is difficult to opt out in some industries, possibly because consumer demand for opt-out has traditionally been low, and because the value of consumer information is high.

"Opt-in" is the idea that information-sharing should not occur unless consumers affirmatively allow it or request it. If opt-in is what consumers want, it is even better business than opt-out and consumers will refuse to deal with businesses that do not offer it.

There is no reason why the decision between "opt-in" and "opt-out" should be made by legislators or bureaucrats in Washington or anywhere else. The decision should be made based on actual consumer demand.

Though many industries appear monolithic in their opposition to "opt-in", every business in those industries would adopt opt-in if it would give them a leg up in the marketplace. They would use opt-in to win market share and savage their opt-out competitors. If consumers ever do really demand opt-in information practices, the companies that fail to anticipate that will lose dollars. We can be sure that many are looking carefully at the viability of that business model.

Privacy advocates who claim to represent the public interest when they demand "opt-in" are making awfully unfortunate career choices. They should go into business themselves, offer existing products and services plus "opt-in" information practices, and make fortunes for themselves while improving life for consumers.


Mandating Opt-In May Cause Consumers to Be Left Out, by James Plummer, Consumer Alert (May 2002)

Protecting Privacy in the New Millennium: The Fallacy of "Opt-in" by Fred H. Cate, Professor of Law, Harry T. Ice Faculty Fellow, and Director of the Information Law and Commerce Institute, Indiana University School of Law-Bloomington, and Michael E. Staten, Distinguished Professor and Director of the Credit Research Center, The Robert Emmett McDonough School of Business, Georgetown University.

Comments? (Subject: OptInOptOut)

[updated 05/20/03]

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