The Privacy Gambit: Toward a Game Theoretic Approach to International Data Protection


“Privacy” is one of the fastest growing areas of the law, due in part to the explosion of the Internet over the past decade. When we speak of privacy in the Internet age, we typically mean data protection, the regulation of the use of personal information about individuals by private interests, such as corporations. Unfortunately, much of the discourse on the subject adopts a framework more suitable to traditional privacy, an inviolable “right to be let alone” by the state. Rather than create a sacrosanct right against the government, the modern incarnation of privacy actually creates a quasi-property right, where personal data is a valuable commodity and access to it is negotiable.

This paper explores several scenarios in which economic actors (including spammers, “legitimate” e-mail marketers, governments, and individuals) compete and cooperate in order to capture the value in personal information. The paper then focuses on a particular scenario, the ongoing interaction between the United States and the European Union in attempting to construct data protection regimes that serve the philosophies and citizens of each jurisdiction, as well as provide a strategic economic advantage. A game theoretic model is presented to explain the course of dealings between the two actors, including both unilateral and bilateral actions. Opportunities for seizing competitive advantage through legislative or judicial action are explored, and a likely equilibrium state is posited.


Antitrust and Trade Regulation | Comparative and Foreign Law | Consumer Protection Law | International Law | International Trade Law | Internet Law | Law and Economics

Date of this Version

March 2006