A week ago I heard an NPR radio interview with an FTC representative on web and phone privacy. She said the FTC protects your privacy by making sure firms who collect info on our activities can only use it to sell us stuff, but not to decide on hiring, renting, lending, or insuring. I thought: why is this where we draw our line of “privacy”?
Looking up a recent FTC report (quotes below), I see it goes back to the 1972 Fair Credit Reporting Act (FCRA), which required firms that rate you or collect info on you for hiring, renting, lending, or insuring to show you everything your rating is based on, and let you challenge any part of it. And given how completely infeasible it would be to show you all internet info collected about you, or let you challenge any of it, this law basically says that hiring, renting, lending, and insuring decisions must not benefit from the vast increase in info that web/phone tech now creates.
Adverse selection, where the people you least want are mostly like to apply, can plague hiring, renting, lending, and insuring. This is a big problem, and many regulations are said to be designed to deal with it. Yet the FCRA clearly makes this hidden info problem worse, by greatly limiting the info on which such decisions can be based.
To see how far this can go wrong, imagine a Fair Date Reporting Act, requiring all dating decisions to be made on the basis of documented information that potential dates can inspect and challenge. You couldn’t reject someone for a date unless you could clearly document that they are unsuitable. You’d end up relying heavily on some very crude indicators, like weight, education, income, and hair color, and enjoy your dates a lot less. And then they’d probably pass laws prohibiting some indicators as unfair, such as weight.
So why are we more willing to mess up decisions about hiring, renting, lending, or insuring, relative to dating? Because we see those deciders as dominating, because they choose to accept or reject us, and we see big firms as evil. Why don’t we similarly restrict the info firms can use to try to sell us stuff? Because we see ourselves as doing more of the choosing there, making us the dominant party.
Added 11p: Imagine that you were required by law to score all job offers on objective verifiable criteria, such as salary and location, and had to take the job that scored highest. How close would that be to slavery?
Those promised FTC report quotes:
The FTC has resolved seven data security cases, obtained orders against
Google, Facebook, and online ad networks, and challenged practices that violate sector-specific privacy laws like the Fair Credit Reporting Act (“FCRA”) and COPPA. … Consumer reporting agencies … are companies that assemble and evaluate consumer information for use by creditors, employers, insurance companies, landlords, and other entities involved in eligibility decisions affecting consumers. … Pursuant to the FCRA, consumer reporting agencies are required to disclose to consumers, upon request, all items in the consumer’s file, no matter how or where they are stored, as well as the entities with which the consumer reporting agency shared the information in a consumer’s report. When consumers identify information in their report that is incomplete or inaccurate, and report it to a consumer reporting agency, the agency must investigate and correct or delete such information in certain circumstances. …
Even if a company is not compiling and sharing data for the specific purpose of making employment, credit, or insurance eligibility decisions, if the company has reason to believe the data will be used for such purposes, it would still be covered by the FCRA. For example, recently, the [FTC] issued warning
letters to the developers of mobile apps that compiled public record information on individuals and created apps for the purposes of learning information about friends, co-workers, neighbors, or potential suitors. The [FTC] noted that if these apps marketed their services for employment purposes or otherwise had reason to believe that they were being used for employment purposes, the FCRA requirements would apply.