The End of the Internet Fast Approaches

by S.M. Oliva, Mises Economics Blog
Dec. 17, 2010

The Commerce Department and the Federal Trade Commission are pushing ahead with the “reorganization” of the decentralized Internet into a more centralized government program. The Associated Press reports on a Commerce Department report released today:

The new report proposes the creation of a voluntary, but enforceable industry code of conduct to ensure that companies give consumers clear notice about what data is being collected and exactly how it is being used.

It would give consumers the opportunity to “opt out” of, or decline, some or all of that data collection. Consumers would also get the ability to correct errors in the information.

The code would also set clearer limits on the use of this information and would require companies to secure the data they gather.

In addition to broad industry-wide principles, the Commerce Department also envisions establishing specific codes of conduct for particular segments of the Internet ecosystem. Those could include social network sites, services that deliver location-based pitches to mobile devices and Web publishers and marketers that target ads based on a consumer’s browsing activity and other online behavior.

The new codes would be binding on the industry. The Federal Trade Commission could take actions against companies that commit to abide by the codes and then don’t comply.

So the Obama regime wants to adopt the Depression-era approach of creating industry-wide cartels. How did that work out back in the 1930s?

FTC Chairman Jon Leibowitz -- who somehow remains in office despite the expiration of his term three months ago -- said government centralization would “preserve the viability of the Internet as it evolves through innovation, transforms the marketplace, and spurs economic growth.” Except that the cartelization demanded by FTC and DOC will restrict competition, maintain a static marketplace, and limit economic growth -- all under the pretense of protecting “consumer privacy.”

We know that’s a sham. After all, the FTC and DOC were silent on the single largest violation of consumer privacy in recent memory -- the TSA assaults on air passengers. The agencies only feign concern about privacy when they see an opportunity to seize control of something they fear and don’t understand, like the internet.

Unfortunately, there’s little indication of any organized opposition to the FTC-DOC cartelization plans. Major tech companies like Google and Facebook are too busy expanding their Washington lobbying staffs to address the long-term damage that Leibowitz and his criminal buddies seek to inflict. Indeed, appeasement is now the watchword for today’s tech giants. They’ll take the short-term political security of cooperating with the agencies with the promise that cartelization will somehow protect them from new competition in the future.