UC Berkeley

A broad coalition, including companies formerly opposed to the enactment of privacy statutes, has now formed behind the idea of a national information privacy law. Among the benefits that proponents attribute to such a law is that it would harmonize the U.S. regulatory approach with that of the European Union (E.U.) and possibly minimize international regulatory conflicts about privacy. This essay argues, however, that it would be a mistake for the United States to enact a comprehensive or omnibus federal privacy law for the private sector that preempts sectoral privacy law. In a sectoral approach, a privacy statute regulates only a specific context of information use. An omnibus federal privacy law would be a dubious proposition because of its impact on experimentation in federal and state sectoral laws, and the consequences of ossification in the statute itself. In contrast to its skepticism about a federal omnibus statute, this essay views federal sectoral laws as a promising regulatory instrument. The critical question is the optimal nature of a dual federal-state system for information privacy law, and this essay analyzes three aspects of this topic. First, there are general circumstances under which federal sectoral consolidation of state law can bring benefits. Second, the choice between federal ceilings and floors is far from the only preemptive decision that regulators face. Finally, there are second-best solutions that become important should Congress choose to engage in broad sectoral preemption.