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CliftonMartinFirstPaper 7 - 24 May 2025 - Main.CliftonMartin
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U.S. Data Privacy Law & Consumer Control of Personally Identifiable Information: A Deeply Flawed Legal Framework
-- By CliftonMartin - 14 Apr 2025 | |
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< | The ability of consumers to assert control over their personally identifiable information (PII) is incredibly limited by the flawed and industry-centric nature of U.S. privacy law. The current legal framework is structured to immunize private actors and prioritize business interests over empowering consumers, resulting in inconsistent protections and significant barriers to enforcement. This leaves consumers with limited control and is indicative of a broader shift away from regulatory governance toward a “no law” regime. The United States does not rely on expert agency assessment to adopt enforceable standards, as seen in post-war environmental law. Instead, the law treats privacy as a matter of individual choice, where it uses consent in a way that obscures collective harms of data misuse. | >
> | The ability of consumers to assert control over their personally identifiable information (PII) is limited by the flawed and industry-centric nature of U.S. privacy law. The current legal framework is structured to immunize private actors and prioritize business interests over empowering consumers, resulting in inconsistent protections and significant barriers to enforcement. This leaves consumers with limited control and is indicative of a broader shift away from regulatory governance toward a “no law” regime. The United States does not rely on agency expertise to adopt enforceable standards, as seen in post-war environmental law. Instead, the law treats privacy as a matter of individual choice, where it uses consent in a way that obscures collective harms of data misuse. | | | While there are several reasons behind the United States’ failure to protect consumers, the primary obstacles to effective control over PII include the reliance on consent as a regulatory tool, the absence of a comprehensive federal privacy statute and agency enforcement, restrictive Article III standing requirements, and the broad immunity granted under Section 230 of the Communications Decency Act. To address this shortcoming and restore meaningful consumer protection, privacy law must shift toward a standard-based model grounded in public governance, agency rulemaking, and accountability.
I. Consent & the Myth of Consumer Choice | | | II. Lack of a Comprehensive Federal Privacy Statute | |
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< | The lack of a comprehensive federal privacy statute is a regulatory gap and reflects a deliberate political economy that prioritizes economic innovation over public welfare. Unlike environmental statutes such as the Clear Air Act or the National Environmental Policy Act (NEPA), which require agencies to assess risks and set enforceable standards, privacy law lacks an equivalent regulatory infrastructure. With no overarching, unified federal privacy statutes, consumers are vulnerable and left to navigate an assortment of inconsistent regulations. Industry-specific laws like the Health Insurance Portability and Accountability Act (HIPAA) and the Gramm-Leach-Bliley Act create fragmented rules that adopt “opt-out” systems and place the burden on individuals rather than institutions. The Gramm-Leach-Bliley Act exemplifies this priority misplacement as the act lets financial institutions share PII with third parties unless consumers actively opt out. This “default sharing” structure shifts costs to consumers while subsidizing data extraction as a form of economic development. As legal historian Morton Horwitz shares in his book, The Transformation of American Law 1780–18601, this kind of structure that grants selective legal immunity for private actors is not merely a regulatory absence, but a tool of wealth concentration. | >
> | The lack of a comprehensive federal privacy statute is a regulatory gap and reflects a deliberate political economy that prioritizes economic innovation over public welfare. Unlike environmental statutes such as the Clean Air Act or the National Environmental Policy Act (NEPA), which require agencies to assess risks and set enforceable standards, privacy law lacks an equivalent regulatory infrastructure. With no overarching, unified federal privacy statutes, consumers are vulnerable and left to navigate an assortment of inconsistent regulations. Industry-specific laws like the Health Insurance Portability and Accountability Act (HIPAA) and the Gramm-Leach-Bliley Act create fragmented rules that adopt “opt-out” systems and place the burden on individuals rather than institutions. The Gramm-Leach-Bliley Act exemplifies this priority misplacement as the act lets financial institutions share PII with third parties unless consumers actively opt out. This “default sharing” structure shifts costs to consumers while subsidizing data extraction as a form of economic development. As legal historian Morton Horwitz shares in his book, The Transformation of American Law 1780–18601, this kind of structure that grants selective legal immunity for private actors is not merely a regulatory absence, but a tool of wealth concentration. | | | III. Standing Doctrine & Procedural Barriers |
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