Consumer Protection: Education Versus Structuralism

Should privacy be a matter of individual choice and individual responsibility, or an inherent part of products and services? Should public policy focus on educating the consumer, or on creating incentives to building attributes into the structure of products? Lessons from the 1950s–60s battle over car safety features some of the same public debates as one sees in today’s conflicts over protecting information privacy.

In the 1950s and 1960s, automakers strongly resisted safety mandates. Ralph Nader, in Unsafe at Any Speed,[1] recounted the opposition of the car industry to install seat belts (then lap belts). Nader argued that car companies feared that the seat belt would remind the driver of the risk of accident, and make them fearful of motoring.

The automobile industry tried to focus public policy on the driver—the “nut behind the wheel” instead of major investments in car safety. In an oft-quoted portion of Nader’s book, it was revealed that General Motors spent less than one percent of its $1.7 billion profit on studying safety. Meanwhile huge numbers of individuals were dying in accidents—over 50,000 in 1966 alone (almost as many Americans died in the Vietnam War).

Today, just as in 1966, the driver is responsible for most accidents. However, the fatality rate per 100 million miles traveled today is only 1.1, versus 5.5 in 1966. What accounts for this difference?

A revolution in thinking about safety occurred. Cars are equipped with seat belts, airbags, and importantly, accident-avoidance technology such as automatic traction control. The importance of enforcing traffic safety laws, the advent of graduated licensing, as well as policing drunk driving have also contributed to lower mortality. Drivers do cause most accidents, but the conversation no longer ends there. Hundreds of thousands of Americans are alive today because public policy has focused upon the structure and safety of the automobile instead of just blaming the driver.

If public policy discussions departed from blaming the consumer (he clicked “I agree” and shared the information) to a situation where we looked at the structure of the online marketplace, there would be a greater role for consumer protection in privacy.

[1] Ralph Nader, Unsafe at Any Speed: The Designed-In Dangers of the American Automobile (1965).