Greetings from Jane Yakowitz Bambauer, the New Director of PEP

I am honored and excited to carry on the unique work of the Program on Economics & Privacy. PEP is a great match for me because my interest in privacy law grew out of my experience running an economics research program.

The research had nothing to do with privacy, but it used quantitative methods and was very dependent on access to data. I started to notice that the things I found most exciting about the Big Data revolution as an engine for rapidly expanding human knowledge and problem-solving was on a collision course with public distrust and consumer protection regulations. My comfort with, and appreciation for, quantitative methods give me an atypical perspective in the privacy policy community. I have openly questioned whether the most popular privacy proposals have defined the anticipated social problems with enough clarity, and whether there is a sufficient basis for alarm based on the available evidence.

PEP promotes and facilitates both types of academic work– research that defines a personal data problem with precision, and research that measures and analyzes the effects of modern data practices. This is invaluable work because we are entering a critical period for the digital economy and its regulation.

Outside of PEP, many of the policy discussions adopt the standard model for privacy protection, based on some variation of the Fair Information Practices. Those practices are built on outdated assumptions about how information can be collected and used, whereby the anticipated benefits and problems of digitized information are no different from a large warehouse of individual files handled by a very fast clerk. The FIPs are poorly designed when the benefits and problems stem from an entirely different model—where filtering and machine learning can make inferences and perform constrained optimization. Consequently, traditional privacy regulations that attempt to enforce notice and consent have a very crude relationship to the risks of Big Data. The risks that we need to understand are related to the societal effects of constrained optimization—whether the goal of optimization has repercussions that the market is unlikely to correct, for example. The traditional approach to privacy cannot do this work. The traditional approach was designed to resist large scale collection, sharing, and unexpected uses of personal data, yet these are critical elements for the success and social benefits of Big Data. Rapid improvements in service and innovation, for example, require data to be repurposed.

This year, PEP will facilitate economic research on Big Data policy issues through a works-in-progress workshop in December. We will share some of the leading research in this area at a public conference on May 10th here at the law school. Please mark your calendars. We will also prepare comments for upcoming Federal Trade Commission hearings on privacy and big data.

Please get in touch with me if you have suggestions for issues that PEP should address or research that PEP should promote. I would love to hear from you. My email is jyakowit@gmu.edu.

6th Annual Public Policy Symposium on the Law & Economics of Privacy and Data Security

The Program on Economics & Privacy, with the support of the Federalist Society’s Regulatory Transparency Project, will hold its 6th Annual Public Policy Symposium on the Law & Economics of Privacy and Data Security, on Friday, June 1, 2018 at George Mason University Antonin Scalia Law School in Arlington, VA.

In the wake of the Facebook-Cambridge Analytica affair and recent high-profile data breaches, we are at an inflection point. There are increasing calls to rethink regulation of the digital economy, Congress is considering several bills to overhaul the laws governing the collection and use of consumer data, and the impact of the GDPR will be felt in the US in less than a month. What’s more, a new slate of FTC Commissioners has just started work.

Join us on June 1 for the 6th Annual Symposium on the Law & Economics of Privacy and Data Security where we tackle these issues with thought leaders from government, academia, think tanks, and industry.

This year’s symposium will include remarks from the new Director of the FTC’s Bureau of Consumer Protection, Andrew Smith.

The symposium will also feature panels on A New Regulatory Regime for Digital Platforms?, Algorithmic “Fairness”, What Does the GDPR Mean for the US?, and Researching Bug Bounty Programs.

Click here to view the agenda.

Third Annual Digital Information Policy Scholars Conference

The Third Annual Digital Information Policy Scholars Conference will be held on Friday, April 27, 2018 at George Mason University Antonin Scalia Law School in Arlington, Virginia. Registration and breakfast will start at 8:00 am, and the program will begin at 9:00 am. The conference is hosted by the Program on Economics & Privacy whose mission is to promote the sound application of economic analysis to issues surrounding the digital information economy through original research, policy outreach, and education.

The Conference will feature a luncheon keynote from Andrew E. Stivers, Deputy Director for Consumer Protection, Bureau of Economics, Federal Trade Commission.

This conference will feature 12 original research papers, including:

SEC Financial Filings 
Ginger Jin (University of Maryland and National Bureau of Economic Research) and Yi Cao (University of Maryland Robert H. Smith School of Business)

Privacy Literacy and Self-Efficacy in Establishing Value of Privacy
Dmitry Epstein and Kelly Quinn (University of Illinois at Chicago)

Sponsored Search Advertisement and Consumer Prices
Eduardo Schnadower Mustri, Alessandro Acquisti (Carnegie Mellon University), and Idris Adjerid (University of Notre Dame)

Infrastructural Solutions to the Analog Keyhole Problem
David Sidi and Laura Brandimarte (The University of Arizona)

Are Digital Markets Different?
John Newman (University of Memphis Cecil C. Humphreys School of Law)

Airbnb, Anonymity, and Illegal Actors
Liad Wagman (IIT Stuart School of Business)

See the full agenda HERE.


How Consumers Value Digital Privacy: New Survey Evidence 

In How Consumers Value Digital Privacy: New Survey Evidence, Program on Economics & Privacy affiliated scholar, Professor Caleb Fuller presents new data that sheds light on the “Privacy Paradox.”

Regardless of how they define it, few people would deny that they’d like more privacy. The rise of the data-driven economy has thrust privacy issues to the fore of the public consciousness and it is unsurprising that the average American citizen, when surveyed, expresses a desire for less privacy-invasive behavior by both private firms and by government. But are they willing to bear the costs associated with additional privacy protection? The case for government intervention in digital markets is made stronger if consumers value privacy highly and if they are highly uninformed.

Based on a random sample of Internet users, Professor Fuller finds:

      • 71% of Google users would prefer the same experience without tracking. For these users, privacy is an economic good of which they would prefer more, ceteris paribus.
      • Only 15% of Google users would be willing to pay anything to avoid tracking, suggesting that at least for this group the ceteris paribus assumption is key.
      • Of this group, the average annual willingness to pay to avoid tracking was $77, substantially lower than the $850 the average American spends on soft drinks each year.
      •  Among all Google users, 90% respond that they are aware of Google’s information collection, suggesting that, at least with respect to Google, ignorance regarding the practice of information collection is not widespread.

These findings lead Professor Fuller to conclude that “the ‘privacy paradox’ may not be a result of biases causing consumers to act inconsistently with their true preferences. Rather, it’s possible that the paradox may be explained on simpler grounds: surveys often take an unconstrained approach; behavior online always incurs a real cost (even if it’s a very small opportunity cost).”

Professor Fuller will be presenting his paper, Is the Market for Digital Privacy a Failure?, which draws on this new evidence, at the FTC’s PrivacyCon on February 28.

Read the full report here.

Call for Papers: Third Annual Digital Information Policy Scholars Conference

George Mason University Antonin Scalia Law School
Program on Economics & Privacy

Third Annual Digital Information Policy Scholars Conference

April 27, 2018

Antonin Scalia Law School at George Mason University, Arlington, VA


The Program on Economics & Privacy (PEP) at Antonin Scalia Law School will host a scholars conference on the economics of digital information policy on April 27, 2018. The conference will be open to the public.

The mission of PEP is to promote the sound application of economic analysis to issues surrounding the digital information economy through original research, policy outreach, and education. The annual Digital Information Policy Scholars Conference is intended to further this goal by providing a forum to present original research on this important area of the US economy.

Topics:

Topics of interest include, but are not limited to:

      • Consumer valuation of privacy
      • Markets for privacy
      • The impact of state and federal privacy & data security regulation on consumers and firms
      • The GDPR and other European privacy regulations
      • Private litigation under state and federal privacy and data security laws
      • Liability issues surrounding the Internet of Things
      • The use of big data for consumers scoring
      • The intersection of privacy and competition policy
      • Competition policy and Internet platforms
      • Student privacy
      • Consumer responses to disclosures
      • Privacy and data security issues surrounding biometrics

     

    Submissions:

    Please send your paper or abstract by February 19, 2018, to Jeff T. Smith, Coordinator of PEP, at jsmithq@gmu.edu. Preference will be given to completed papers. The selection committee includes Alessandro Acquisti (Carnegie Mellon), Jane Bambauer (University of Arizona, James E. Rogers College of Law), Michael Baye (Indiana University, Kelley School of Business), James Cooper (George Mason University Antonin Scalia Law School), Sasha Romanosky (RAND), Andrew Stivers (Federal Trade Commission), and Catherine Tucker (MIT, Sloan School of Management). Selections will be made by March 5, 2018.

    Selected authors will receive a $300 honorarium and will be provided lodging for the night of April 26, 2018. There will be a dinner for participants on April 26. Selected authors will be responsible for submitting a final version of their paper by April 13, 2017. In addition to presenting their paper, selected authors will be expected to serve as a discussant for one paper at the conference.

Now Accepting Applications for the 2017-2018 Privacy Scholars Fellowship Program

The Program on Economics & Privacy (PEP) at George Mason University Antonin Scalia Law School invites applications for the 2017-18 Privacy Scholars Fellowship Program. The Privacy Scholars Fellowship Program is designed to support research on the economics of privacy and data security. Total honorarium payments of $12,000 per paper will be available to those who complete all stages of the program. The PEP will provide lodging and meals at all events, but participants will be responsible for their own transportation arrangements and expenses.

The Fellowship Program is structured in five stages that are designed to lead to the completion of an original piece of scholarly work suitable for publication.

  1. Submission of Research Proposal – Submission Deadline of October 13, 2017: Research proposals should include a statement of issue to be addressed, the proposed methodology, as well as a discussion of the feasibility for completion by Summer 2018. Proposals should be no longer than five pages (not including charts, graphs, or bibliography). The PEP will notify those chosen to present a more fully developed draft at the December roundtable by October 23, 2017. Those authors chosen to present will be provided an honorarium of $3,000 after attending the December roundtable. The selection committee includes: Alessandro Acquisti (Carnegie Mellon), Jane Bambauer (University of Arizona, James E. Rogers College of Law), Michael Baye (Indiana University, Kelley School of Business), James Cooper (George Mason University, Antonin Scalia Law School), Andrew Stivers (Federal Trade Commission), and Catherine Tucker (MIT, Sloan School of Management).
  1. Research Roundtable at Antonin Scalia Law School (December 14-15, 2017): Selected authors will present expanded drafts at a research roundtable to be held at Antonin Scalia Law School on December 14-15, 2017. Revised drafts should be no more than 25 pages (excluding charts, graphs, and bibliography), and represent substantial work beyond the proposal (e.g., preliminary statistical results). This research roundtable is a workshop designed to provide authors with constructive feedback from expert academics and practitioners in the field. The PEP will make final decisions on which research it will support with a Privacy Scholars Fellowship by December 18, 2017.
  1. First Draft (February 16, 2018): Each Fellowship recipient is required to submit a First Draft of his or her paper by February 16, 2018. These drafts should be substantially revised based on feedback from the December research roundtable, and should provide reviewers with a clear sense of the approach and direction of the paper. Each First Draft will be subjected to anonymous peer review designed to provide constructive feedback. Comments will be sent to Fellowship recipients in early March. Fellowship recipients will receive an honorarium of $3,000 for timely submission.
  1. Presentation of Second Draft at Digital Information Policy Scholars Conference at Antonin Scalia Law School (April 27, 2018): Privacy Fellows will submit a revised draft of their paper that responds to comments from peer reviewers for the Third Annual Digital Information Policy Scholars Conference, to be held on April 27, 2018 at Antonin Scalia Law School. Fellowship recipients will present revised drafts of their papers and serve as a discussant for one paper during the conference. Fellowship recipients successfully participating in the Scholars Conference will receive an honorarium of $3,000.
  1. Completion of Final Draft and Submission to an Academic Journal (Summer 2018): Following presentation at the Scholars Conference, Fellowship recipients are expected to revise their paper and to seek publication in a suitable academic journal. Upon completion of this requirement, Fellowship recipients will receive a final honorarium of $3,000.

Empirical projects are strongly preferred to theoretical or doctrinal research. Topics of special interest include the following:

      • Consumer valuation of privacy
      • Identifying and measuring privacy harms
      • The impact of privacy and data security regulation on firms, consumers and market outcomes
      • Assessing the likelihood and magnitude of harm from data breach
      • Measuring the privacy benefits of the Internet
      • Consumer responses to privacy disclosures
      • The cost of complying with privacy and data security regulations, including the impact on information flows and product design
      • The relationship between privacy and data security
      • The interface between competition policy and privacy policy
      • Issues surrounding biometric privacy laws
      • The impact of state and federal privacy laws on the use of online learning in classroom
      • Issues related to algorithmic decision-making, machine learning, and artificial intelligence

 

The PEP’s mission is to inject sound economic analysis into policy discussions surrounding privacy, data security, and other competition and consumer protection issues facing the digital economy. We pursue this mission through research, education, and hosting public policy programs that bring together academics, thought leaders, and government officials to discuss cutting edge issues involving the digital economy. For more information regarding this program or other initiatives of the PEP, please visit https://pep.gmu.edu.

You may also call or send an email to James Cooper, Associate Professor of Law and Director, Program on Economics & Privacy, at 703.993.9582 or jcoope20@gmu.edu.

New Paper: Biometric Privacy Laws – How a Little-Known Illinois Law Made Facebook Illegal

Program on Economics & Privacy affiliated faculty member, Professor Jane Bambauer, explores the recent developments in biometric privacy laws in her latest paper, “Biometric Privacy Laws: How a Little-Known Illinois Law Made Facebook Illegal.”

Banks and retailers are increasingly interested in using biometric information to authenticate customers by converting a scan of their biological features into an elaborate password.

The benefits of biometric authentication are obvious, but so are the drawbacks: since the systems use scans of irises, fingers, and even facial structures, a user’s biometric passwords are on public display every time they leave the house. Some states have passed biometric privacy laws to help facilitate the development of biometric authentication technologies. But these well-intentioned biometric privacy laws showcase the problems that arise when public policy tries to keep up with technology.

They are wildly overbroad, potentially exposing even individual users of basic photo organization software to civil liability based on conduct that poses no risk to data security. What is more, the laws are also unlikely to be necessary to accomplish their intended goals; companies that are developing biometric authentication systems to protect sensitive personal data are already using technological solutions to manage the security risks, rendering the legal solutions obsolete. Finally, their scope possibly contravenes the First Amendment and the Dormant Commerce Clause.

Although the purpose of these nascent laws is laudable, so far they appear to have only spurred class action litigation that is likely to harm, rather than help, the interests of the average consumer.

Read the full paper here.

June 8, 2017 – Public Policy Symposium on Privacy and Data Security

Registration is still open for the 5th Annual Public Policy Symposium on the Law & Economics of Privacy and Data Security on Thursday, June 8, 2017 at George Mason University Antonin Scalia Law School.

The morning keynote will feature Omri Ben-Shahar (The University of Chicago); the luncheon will feature a keynote address from David A. Hyman (Georgetown Law), and a panel discussion on the The Future of FTC Privacy & Data Security Policy featuring Thomas B. Pahl, Acting Director of the FTC’s Bureau of Consumer Protection. Speakers at the Symposium also include Julie Brill, former FTC Commissioner and partner at Hogan Lovells,  Joshua D. Wright, former FTC Commissioner and professor of law at Antonin Scalia Law School,  William C. MacLeod, former Director  of the FTC’s Bureau of Consumer Protection, and Chair of the ABA Antitrust Section, and Lydia Parnes, former Director  of the FTC’s Bureau of Consumer Protection, and partner at Wilson Sonsini Goodrich & Rosati.