June, 2016

The Perils of Privacy Regulation

  • Caleb Fuller

    Assistant Professor of Economics, Grove City College
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Find the article at SpringerLink.

Advocates of digital privacy law believe it is necessary to correct failures in the market for digital privacy. Though legislators allegedly craft digital privacy regulation to protect consumers, some advocates have understated the dangers that digital privacy law may engender. This paper provides evidence for Kirzner’s “perils of regulation” in the digital privacy arena. The regulatory process fails to simulate the market process, stifles entrepreneurial discovery, and creates opportunities for superfluous discovery. My research suggests that policy-makers should consider a more holistic accounting of the costs before imposing additional digital privacy regulation.