Home Slider Privacy in a World of Sharing and Cooperation

Privacy in a World of Sharing and Cooperation

by internationalbanker

By Dr. Swati Bhatt, Ph.D., Lecturer of Economics, Princeton University




Article the third (1st Amendment)….. Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

Article the sixth (4th Amendment)….. The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.


Major technology policy issues fall under the First Amendment, the right to freedom of speech, and the Fourth Amendment, the right to privacy, which prohibits unreasonable searches and seizures and requires any search warrant to be judicially sanctioned and supported by probable cause. In a heterogeneous society, are there any bounds of ethics, morality and law to free speech so that inflammatory words are circumscribed? What constitutes “search and seizure” and under what “probable cause”? Consider how information and communication technology is stretching, and perhaps changing, the substance behind these amendments and what this means for privacy, anonymity and identity. Are there institutions, both business and state, capable of monitoring these new values to ensure the integrity of the law?

First Amendment

Limits to the freedom of speech are already being defined by private interests. While recent data suggests that young people, aged 18 to 29, feel that the state should intervene in preventing speech that could be regarded as offensive to minority groups, limits to the freedom of speech are already being defined by private interests in the United States. (According to The Economist, 21 percent of German youth, 47 percent of British youth and 55 percent of French youth, aged 18 to 29, favor government intervention [2]. Reporting spam has become the new normal on social-media sites such as Facebook. Is it easier to write hate messages, or are young people just becoming more intolerant?) On university campuses across America, as students are drawing attention to past injustices, they are simultaneously acting as censors of free speech by preventing talks by Condoleezza Rice, Ayaan Hirsi Ali (a Somali writer and Muslim) and Jason Riley (an African-American author). “Students and their sympathizers think that free speech is sometimes invoked to deflect these claims; or, so Princeton’s Black Justice League maintains, as a ‘justification for the marginalization of others’ ” [1]. 

Fourth Amendment

The Fourth Amendment protection expanded significantly with the United States v. Jones (2012) Supreme Court case. Law-enforcement officers in a drug-related investigation had installed a GPS (Global Positioning System) device for a month on a car’s exterior without Jones’s knowledge or consent. This was not only a test of “unreasonable searches and seizures” without a warrant but also government intrusion upon privacy and civil rights. The court concluded that since the car was Jones’s property, the intrusion on the vehicle was for the purpose of obtaining information and, therefore, was a search under the Fourth Amendment, for which a warrant would have been needed. As Attorney Richard Thompson, Congressional Research Service, explained, “The majority contended that Jones’s rights should not strictly depend on whether his reasonable expected zone of privacy was pierced. Rather, the majority asserted, property rights also define an individual’s right to be free from government intrusion” [3].

More significantly, the court’s concurring opinion by Justice Samuel Alito was that a mosaic of information could be created from digital scraps of data, which meant that the GPS-device information, while minor, could generate a larger picture or mosaic of Jones, violating Fourth Amendment privacy rights. Alito argued that “relatively short-term monitoring of a person’s movements on public streets accords with expectations of privacy that our society has recognized as reasonable”. However, extended monitoring, which enabled observation of an individual’s movement patterns, thereby generating a personal story, violated the Fourth Amendment [3]. This was a landmark case in that violation of the Fourth Amendment was interpreted in terms of both privacy and personal property.

However, information voluntarily shared with third parties is not granted this Fourth Amendment protection (in 1976, United States v. Miller, 425 U.S. 435 held that financial records turned over to a bank did not guarantee privacy). In 2018, with Carpenter v. U.S., 585 U.S., the Supreme Court held that “historical cell-site records present even greater privacy concerns than the GPS monitoring in Jones: They give the Government near perfect surveillance and allow it to travel back in time to retrace a person’s whereabouts.” Cell-site location information is neither voluntarily shared nor limited in scope as business records are but “an exhaustive chronicle of location information casually collected by wireless carriers” [4].

The European Union Data Protection Directive goes further in making privacy a fundamental right. This includes the right to be forgotten so that individuals can request search engines to remove links that are no longer relevant. This feature suggests some form of editorial control by citizens over what might be public information and also places the burden of removal on the search engine, the platform, rather than the original information source. Additionally, this information may not be removed from all global websites. (The Charter of Fundamental Rights of the European Union has two distinct conceptions of privacy. First, there is respect for private and family life, and second, everyone has the right to the protection of personal data concerning themselves. A corollary to the second concept is the right to be forgotten.)

The anonymity-identity spectrum

At the heart of both amendments is the idea of connectivity. First, we have the freedom to choose both the medium and message of communication. What determines how we communicate? And how do most people want to communicate? We have the option of communicating via direct face-to-face contact or via voice (phone), text, email and photo images. The available communication technology determines the scope and range of our words. Digital technology generates viral connectivity, so First Amendment rights have far more power than originally imagined. Second, technology also determines the extent to which this communication remains between the interested citizens—this choice, therefore, impacts privacy outcomes. Consider that the very technology that enables our communication also includes business: as a consequence, the boundaries of our private lives are defined by the technological choices we make. Most individuals remain unaware of the sieve-like nature of transmission technology and how it can be penetrated at various points by businesses for monetary gain and by the state for national-security purposes. Importantly, neither does the law! The Privacy Act of 1974 is based on a set of principles that are not synchronized with current technological capabilities.

From an economic perspective, what does freedom of speech imply? Magazines sell and advertisers pay for space on platforms that host popular content, and when popularity is reinforced by titillation and voyeurism, there is an incentive to seek and publish intimate details about individuals. This is where the First and Fourth Amendments collide. In free and unconstrained markets, businesses have the right to pursue their objective of profit maximization (which could be defined to encompass all stakeholders in the business), but this right is incompatible with individual rights to their private information. The significant question for the courts and civil society is how should violations of civil liberties, embodied in both the First and Fourth Amendments, be addressed?

What do we mean by privacy? It encompasses several definitions. One is autonomy or independence of personal choice, including marriage, religion, secrecy or hiding personal conduct, and anonymity or the ability to conduct your life totally unobserved. In many nations, including the US, autonomy in personal choice is guaranteed by law.

The second form of the privacy definition addresses the issue of government surveillance, while the third form covers the notion of privacy as a basic human right. The central issue here is one of control. If privacy is considered a basic human right, with ownership status as with property rights, then individuals have the right of control. Control over whether, when and with whom to share their private information. We have largely accommodated this notion with most economic transactions, which are paired with complex privacy agreements. (It’s not clear if those who profess to believe in privacy rights actually read these agreements prior to signing off.)

These three definitions cover a spectrum of private information in which there is complete anonymity on one end and total transparency on the other.

Anonymity also implies the absence of any form of identity. A world in which individuals are totally unknown has never existed. Memberships in tribes, kin groups and communities automatically generate identities. In fact, socialization is ingrained in human nature so that we may acquire an identity. The fear of being alone, with no kith or kinship ties, is precisely what drives civilization and culture. The idea of complete anonymity is antithetical to any evolutionary trajectory; so when we argue about privacy, we are asking a narrow question. The question is not one of the absence of identity but rather the preservation of that identity in a secure and undisturbed form. People don’t want to vanish into obscurity; they want to be known as obscure, private individuals.

Privacy and business

The consumer has already made a Faustian bargain with business when conducting any non-cash transaction. Digital transactions and payments leave retraceable trails, so any and all data imparted is in the public sphere. There is directionality to this economic connection, since once information is sent from buyer to seller, it cannot be retrieved or retroactively erased. In many instances, more information than is strictly necessary is imparted in exchange for price discounts for merchandise (or freebies).

Most of us divulge personal data routinely on social media, search engines and shopping websites, allowing third parties to commercialize this data. This process uncovers data that is already “out there”—it is often simply a matter of connecting the dots and uncovering the pattern of an individual’s life. We litter our public space with intimate details of our lives, in tiny crumpled pieces of data that we think are only worthy of disposal. Just as governments pore over the trash of potential terrorists, these pieces of data can be strung together in a private-surveillance effort. There are freedom-of-speech rights in addition to privacy rights, so does each individual have the responsibility to guard his speech, or does the listener have the responsibility to exercise restraint in publicizing? Just as you are a visible public figure whenever you enter public spaces, like walking on a street, your personal information is public as soon as you digitally connect with the world.

When privacy is not a basic property right, individuals do not place much value on it. In a 2019 survey, 36 percent of 18-to-24-year-olds in the United States would be willing to pay a company zero dollars to refrain from tracking their data while using their product. For individuals aged 45 to 54 years, the percentage rose to 57 percent. And for the oldest demographic, 65 years and over, the percentage was 66 percent [5].

A 2019 survey by the Pew Research Center found that while the notion of privacy on the internet means different things to different demographic groups, the overall concern is that their personal information is no longer secure. 81 percent of US adults feel that they have little or no control over the data that companies collect, and 84 percent of US adults feel they have little control over government data collection. On the other hand, 59 percent of US adults have little or no understanding of what corporations (78 percent of what governments) do with the data collected [6].

Think of the information market as consisting of suppliers (consumers who reveal preferences through searches and transactions); intermediaries who collect, curate and store this information; and final users or firms that buy this aggregated data to improve products and prices. To the extent that an individual’s behavior is correlated across time, knowing a customer’s history allows the firm to generate a finer picture of his preferences. Similarly, customers’ behaviors are correlated when they can be grouped by similar characteristics. Then information collected across wide swaths of consumers allows the firm to tailor products to specific groups and also price discriminate more efficiently by charging different prices to groups with similar characteristics.

Thus, customers face a tradeoff between hiding and sharing data. For example, it is more convenient to share personal information with a bank in order to facilitate online banking. But it may be costly (in terms of loss of privacy) to share this same information with a retailer who might himself face a tradeoff between guarding this information or selling it to third parties. Further, consumers may face bounded rationality in that they may undervalue the cost of revealing information. Innocently providing phone numbers and email addresses at the point of sale, which is unnecessary for most transactions, allows the business to initiate communication with the individual, precipitating a string of interactions.

Privacy and national security

In the aftermath of 9/11, the U.S. Congress passed the USA PATRIOT (Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism) Act of 2001. This act allowed the government to gather metadata from internet service providers without the consent of the parties involved. (Metadata is a higher form of data, covering not simply the identity of individuals under surveillance but the content of their communications, including the names of third parties, who may be unrelated to the mission at hand and whose privacy is, therefore, being violated. This issue is at the heart of the debate over surveillance activities, foreign and domestic.) Section 215 of the Patriot Act “makes it lawful to intercept the wire or electronic communication of a computer trespasser in certain circumstances” [7]. The National Security Agency (NSA) program called PRISM “allowed the NSA to obtain virtually anything it wanted from the Internet companies that hundreds of millions of people around the world now use as their primary means to communicate” [8]. This allowed the NSA access to private documents—emails, text messages, phone calls and documents in the cloud— without warrants, perhaps violating the Fourth Amendment.

Defense of the state necessitates surveillance activities, but, in a democracy, these have to be conducted within the bounds of the law. Citizens have conflicting demands in maintaining their anonymity and in securing their state. What point along the spectrum of anonymity-transparency is society going to choose? As citizens, we have the right to national defense against external threats. In pursuing this objective, the state may require access to private information, so we have delegated transparency to select state institutions.

When privacy is a public good

Shared private information creates a common resource, much like a public park, whereby individual contributions of private data add up to a data pool that has vast social and community benefits. Just as taxes pay for public goods such as parks, shared data “pays” for common resources or public goods. Connections across the network economy make the benefits of sharing apparent, so cooperation is elicited.

Large, detailed private data is more valuable when shared because it provides the information needed for improved transportation and public health systems. Common traffic patterns in congested cities and movement patterns in infected areas can be analyzed by data downloaded from personal databanks on smartphones. For example, in 2014, when Ebola raged in West Africa, doctors traced geolocation capabilities on mobile phones to contain the spread of the virus. The Orange telecom in Senegal cooperated by giving the data to the Swedish non-profit Flowminder, which aided in drawing up population-movement maps. Doctors then set up treatment areas and quarantine locations [9].

The Constitution of the United States was written at a time when connectivity meant horses and carriages. The transcontinental railroad had just entered the radar screen, but its implications were never imagined. Reinterpreting the law in the context of today’s technological environment might be arduous and arbitrary. But it may be time to rethink our basic values and frame our analyses in a language of connections. Why do we want privacy, while simultaneously maintaining our right to trespass freely on another’s attention with our words?


[1] “Don’t be so Offensive”, Economist, June 4, 2016, accessed on 2/1/20 from http://www.economist.com/news/international/21699903-young-westerners-are-less-keen-their-parents-free-speech-dont-be-so-offensive?frsc=dg%7Ca

[2] “The Colliding of the American Mind”, Economist, ibid

[3] Thompson, Richard, “United States v. Jones: GPS Monitoring, Property and Privacy”, Congressional Research Service, April 30, 2012, accessed 2/2/2020 from https://www.fas.org/sgp/crs/misc/R42511.pdf

[4] SCOTUS. Accessed 2/2/2020 from https://www.supremecourt.gov/opinions/17pdf/16-402_new_o75q.pdf

[5] Accessed on 2/1/2020 from https://www.surveymonkey.com/curiosity/surveymonkey-axios-poll-privacy-deep-dive/

[6] Accessed on 2/1/2020 from https://www.pewresearch.org/internet/2019/11/15/americans-and-privacy-concerned-confused-and-feeling-lack-of-control-over-their-personal-information/

[7] Accessed on 2/1/2020 from https://www.congress.gov/bill/107th-congress/house-bill/3162

[8] Halpern, Sue, review of No Place to Hide: Edward Snowden, the NSA, and the US Surveillance State by Glenn Greenwald (2014), New York Review of Books, University Press Issue, July 10, 2014

[9] Wall, Matthew, “Ebola: Can Big Data Analytics Help Contain its Spread?”, BBC, 10/15/2-14, accessed 6.14/2016 from http://www.bbc.com/news/business-29617831

Dr. Swati Bhatt (PhD, Princeton, 1986) has been on Princeton’s Economics faculty since 1992. Dr. Bhatt has taught courses on the economics of the internet, microeconomics, industrial organization and finance. Previously, she worked for the Federal Reserve Bank of New York and taught at New York University’s Stern School of Business.


Related Articles

Leave a Comment

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.