The fact that governments collect information using the force of law
cannot be emphasized strongly enough. When a government agency or program
needs personal information to carry out its mission, that information will
be collected. Individuals have no choice in the matter. This is not the case
with businesses, who must bargain for the information they want.
An important upshot of this is that consumers are more often allowed to
remain anonymous or use fake names when dealing with
businesses. As long as one is not committing fraud, the penalty for lying about
one's identity to a business may be that a transaction is not completed.
When dealing with government, however, anonymity or pseudonymity is often
impossible, illegal, or, at the very least, suspicious.
Accountability in government gives rise to privacy problems not found in
the business world. The public can and should have access to information that
governments collect in order to keep government accountable and because the
information was collected using public funds. Open records, a hallmark of open
government, can often mean that information citizens have been compelled to disclose
becomes public. As a rule, databases held by businesses are not subject to becoming public
records. Market conditions apply to their sharing of data. This makes it easier
for customers to demand privacy measures and confidentiality procedures.
In lieu of a healthy system of incentives, governments respond
to a patchwork of privacy laws imposed on themselves. These
laws do not evolve and respond to change as contract
rights can, and as the privacy
torts can in common law courts. Government privacy practices
move in fits and starts, as new uses of information expose
loopholes in government privacy protections.
Also, because governments are only subject to the laws they make for
themselves, information held by governments — even if private "by law" — are
not as well protected as information held under similar restrictions by businesses.
Governments can change and ignore the laws that apply to information without suffering
adverse consequences. Businesses can not.