May 222015
 May 22, 2015  Business, Misc

Babak Siavoshy writes:

Who bears the costs of privacy breaches? It’s challenging enough to articulate the nature of privacy harms, let alone determine how the resulting costs should be allocated. Yet the question of “who pays” is an important, unavoidable, and in my view undertheorized one. The current default seems to be something akin to caveat emptor: consumers of services — both individually as data subjects and collectively as taxpayers — bear most of the risks, costs, and burdens of privacy breaches. This default is reflected, for example, in legal rules that place high burdens on consumers seeking legal redress in the wake of enterprise data breaches and liability caps for violations of privacy rules.

Ironically, the “consumer pays” default may also (unwittingly) be reinforced in well-meaning attempts to empower consumers. This has been one of the unintended consequences of decades of advocacy aiming to strengthen notice and consent requirements.

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