Problems with treating privacy as a property right

Please note that this post is from 2012. Evaluate with care and in light of later events.

In the twentieth century, the general move in regards to Fourth Amendment jurisprudence — one prong of privacy — has been away from a focus on property, and towards a view that focuses on people instead. (See, e.g., The Fourth Amendment: from property to people.) This move gave us warrant requirements for wiretaps even when a physical trespass had not occurred, for example, because it protected people’s “reasonable expectations of privacy.” But as I noted in a previous article, an alternative approach to creating an entirely new right would be to extend property rights to cover information or personal data, rather as copyright, patents, trademarks, and other forms of intellectual property extended physical rules into the realm of the intangible.

While there are undoubtedly benefits to this, there are limitations as well. Pamela Samuelson, in “Privacy As Intellectual Property,” discusses several of them:

First, the infrastructure necessary for enabling a privacy market to flourish is not insubstantial, and would likely require government oversight anyway, especially given the disparity between individuals and data companies (1136-37).

Second is the problem Samuelson characterizes as “free alienability”: normally, once sold, the buyer can resell a product to a third party. But this is likely to be a problem with privacy, since individuals may well be comfortable selling to one company but not to another. Limiting alienability undermines a core part of a property system. (1137-38, 1145)

Third, it is unclear if a property market is really the most efficient way to allocate resources: “What is scarce is information privacy, not personal data,” but Samuelson argues that it is personal data that is being bought and sold. The goal of the market, then, unlike most others, is to limit availability, not increase it. (1138-39) One might counter by re-conceive of the market as one where privacy is what is bought and sold, but I’m not sure this fixes the market issue.

Fourth, but relatedly, the market for intellectual property exists because of a bargain: the law grants temporary monopoly rights (patents, copyrights) to encourage creation and to benefit the public as a result. Everyone benefits from the system. Without it, creators may not have sufficient incentive to invest in, for example, research and development in the face of potential free riders who might undercut them without investing themselves. In the case of privacy rights, though, there is no similar incentive: “Property rights are not needed to bring them [personal data] into being, nor to achieve widespread distribution of them.” In short, what incentives does creating property rights in personal data create? (1140-41)