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State Government Sells Your Private Information

Opinion Editorial
January 19, 2000

By Mike Krause

Why is the state legislature leaving fingerprints all over contracts entered into between mature, adult business people who sell cars and their suppliers, the car manufacturers? The answer is easy. If the car dealers can’t hack it at the bargaining table, they can get the legislature to do the dirty work because they have friends in Capitol places.

The bill is HB 1186 and it adds one-sided statutory language to contracts already entered into between the dealers and suppliers. In general terms, the bill increases car dealer monopolistic power over territory, allows the franchise to be passed down to heirs forever, and provides detailed retribution even if the car manufacturer does legally cancel or refuse to renew a franchise.

The bill is so one-sided that if an auto manufacturer refused to renew a franchise contract because the auto dealer had murdered a customer, the manufacturer would have to pay damages to the dealer!

Last week, the Supreme Court unanimously upheld the Drivers Protection Act of 1994, a federal law that restricts a states ability to sell drivers license information. This is good news for drivers who don’t want their home address to be sold to a stalker. But even after the Supreme Court decision, personal information about Colorado drivers is available for sale to business.

That your personal information is for sale by the State of Colorado might seem surprising to folks who what happened last year when the Colorado Department of Revenue was caught selling drivers license information, including photographs, to Image Data Corp. for a national database. This national database is being established at the behest of the U.S. Secret Service, which wants to have a personal file on everyone in the country, for its “True ID” program.  In response, the Colorado legislature last year passed Senate Bill 99-174 which specifically bars the Department of Revenue from selling or otherwise releasing digitized images (including signatures), fingerprints, photos or social security numbers.  The bill also requires the Department of Revenue to make every attempt to retrieve the 30,000 photographs and digital images sold prior to the legislation.

But having protected privacy with one bill, the legislature undermined privacy with another bill: passed House Bill 99-1293, which requires the Department of Revenue to establish an electronic transfer system to sell bulk quantities of information not otherwise protected to primary users and vendors. The information available for sale, in bulk quantities, includes names, addresses, date of birth, driving records, restrictions (e.g., “must wear glasses”), and other information associated with your license and vehicle registration.

The legislation requires that your personal information be sold both to “primary users” (such as automobile insurance companies, which use the information for their own purposes) and to companies which re-sell the information to other companies.
The new law requires the data buyers to enter into a contract with the Department of Revenue specifically outlining the intended use of the information obtained, pay a fee (which would go to the highway users fund) and then the data is made available.

The stated purpose of the new law is to combat fraud and increase efficiency.  Even though  fighting fraud and being efficient are desirable, is it appropriate for the state government to take large amounts of personal information gathered from the citizenry and bundle it into electronic bytes to be uploaded to whichever business entity is willing to pay up?  If so, can we expect the same regarding other sources of information (and potential revenue for the state) such as medical histories, police agency files, tax records and the like?

There is another troubling question about the state being involved in large scale information selling: what happens to the information once it is in the hands of the buyer?  We are talking about an awful lot of information here.  There are over 700,000 licensed drivers in Colorado.  It is questionable whether the Department of Revenue has the capability to enforce oversight on that much information in the hands of an unlimited number of companies; there is every possibility that this kind of dealing in data on Colorado citizens could result in un-authorized use.

As a whole, we citizens routinely hand over large amounts of personal and intrusive information to the state either as a matter of law.  Whether obtaining a license, complying with a police officer during a traffic stop, or telling the tax man how much money we make, we are always, it seems, handing over another bit of ourselves.

As a matter of social contract, the burden of responsibility is on the state government as to how that information is handled.  And the mere fact that the Congress–whose own lust for gathering information on the citizenry is nothing short of rapacious–felt compelled to slap the hands of the states on this issue casts doubts on how that responsibility is being applied.

While this may be just another example of the need for eternal vigilance as the price of liberty, it would be nice to if the state government were concerned with protecting  the privacy of Coloradoans all of the time and not just when told to by the Congress or Supreme Court, or when theres public outcry.

Mike Krause wrote this article for the Independence Institute, a free-market think tank in Golden, https://i2i.org.

This article, from the Independence Institute staff, fellows and research network, is offered for your use at no charge. Independence Feature Syndicate articles are published for educational purposes only, and the authors speak for themselves. Nothing written here is to be construed as necessarily representing the views of the Independence Institute or as an attempt to influence any election or legislative action.

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