Privacy and Regulatory Innovation: Moving Beyond Voluntary Codes

Abstract: According to its many critics, privacy self-regulation is a failure. It suffers from an overall lack of transparency, weak or incomplete realization of the Fair Information Practice Principles, inadequate incentives to ensure wide-scale industry participation, and ineffective compliance and enforcement mechanisms. Rather than attacking or defending self-regulation, this Article explores co-regulatory approaches in which government plays a role in setting requirements for industry guidelines and imposing sanctions for non-compliance. It examines innovative policy tools such as regulatory covenants and develops a normative framework for evaluating self-regulatory mechanisms. It then considers four case studies, including a voluntary code governing online behavioral advertising practices, a government-negotiated progra