1 Department of Business Law, Aarhus School of Business, Aarhus BSS, Aarhus University2 Centre for International Business Law (CIBL), Aarhus School of Business, Aarhus BSS, Aarhus University3 Department of Law, Aarhus BSS, Aarhus University4 College of Business, Oregon State University5 Department of Law, Aarhus BSS, Aarhus University
Recently a U.S. federal appeals court upheld imposition of an opt-in consumer privacy rule protecting telecommunication subscribers despite the limiting effect this rule may have on the targeted marketing industry. This court's decision empowers the federal government to constitutionally regulate telecommunication carriers' personal data sharing practices in order to protect their customers' data privacy when the regulation restricts use of the data for marketing purposes. In this case National Cable and Telecommunications Association (NCTA) challenged a new Federal Communications Commission (FCC) rule requiring carriers to obtain customers' advance approval before releasing their telephone record information for marketing purposes. NCTA claimed the FCC's new opt-in rule violates companies' First Amendment right to engage in commercial speech. At stake in this appeal was the constitutionally required balance between protecting consumers' information privacy in an era of pervasive data processing and protecting the rights of marketers to engage in protected commercial free speech that involves using customers' personal information. A ruling against the FCC would have limited the use of government regulation to provide information privacy protections for consumers that increasingly relate to technological advances. This article critiques the First Amendment arguments raised by NCTA and argues that protecting consumer's personal data by requiring opt-in consent does not unreasonably restrict a company's right to communicate with their customers. Considering privacy risks associated with advances in computer technology, the complexities of modern information processing and evolving mobile advertising (m-advertising) practices, privacy regulations should not be equated with unwarranted speech regulations. The decision in NCTA v. FCC articulates a new constitutional balance in favor of consumer data privacy protection and will most likely pave the way for achieving adequate data privacy protections for consumers and a more consistent regulatory environment for businesses in the U.S., which are both necessary to support the growth of the global mobile advertising (m-advertising) industry.
International Journal of Private Law, 2010, Vol 3, Issue 1/2