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Home > Privacy and Business > Privacy Law Governing the Private Sector > State or Federal?


State or Federal?

The question of whether privacy law governing the private sector should be state or federal seems arcane, but it is very important.

State laws have guarded privacy for more than 100 years. Both contract law and the law of torts, which are the primary sources of privacy protection, are made at the state level. We benefit from the federal system, and the Constitution limits the powers of the federal government for this reason, among others. Different states may experiment with different approaches to public policy questions like privacy; all states may benefit by learning from the experience of others.

As communications and transportation have improved, markets have increasingly become national. This has more and more put states in the position of appearing to regulate national commerce for the benefit of their own businesses and citizens. The Constitution's Interstate Commerce Clause gives Congress the power to regulate commerce among the States to prevent this very occurrence. The Supreme Court has sometimes found state laws to violate the "dormant Commerce Clause" when they impose themselves on national markets.

The burden of complying with many states' laws can be great, and companies doing business nationally sometimes seek uniform national standards in order to ease this burden. Doing this in the area of privacy, however, would take too much power from states, which, again, have been the chief protectors of privacy standards as they have evolved for more than 100 years. For privacy policy, it would end the badly needed experimentation that is such a clear benefit of our federal system.

Instead of preempting state authority and imposing a single national standard, Congress should make a law striking down state and local privacy mandates that adversely affect interstate commerce, discriminate against out-of-state interests, or conflict with federal law. Otherwise, states should retain the powers they already have to regulate privacy.


Links:

A State Recipe for Cookies: State Regulation of Consumer Marketing Information [pdf], by Bruce H. Kobayashi & Larry E. Ribstein, George Mason University School of Law (January 16, 2001)

Federalism Reform: Seven Options for Congress by Adam Thierer, The Heritage Foundation (January 27, 1999)

Cases & Materials on American Federalism Web page, Professor Douglas G. Amber, Purdue University Calumet

Issues: Federalism / States' Rights, Project Vote Smart (1999)

U.S. Federalism Site by Kala Ladenheim (1999)

Federalism Flowchart and accompanying text by Professor Karl Manheim, Loyola Law School (Spring, 1998)

Comments? comments@privacilla.org (Subject: Preemption)

[updated 05/10/02]



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