Supreme Court Rules For Data-Mining In Vermont

by Wendy Davis, Jun 23, 2011, 6:30 PM

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The U.S. Supreme Court today sided with data mining companies who had challenged a Vermont privacy law. But the ruling doesn't appear as far-reaching as some observers -- including the Association of National Advertisers and Newspaper Association of America -- had anticipated.

The court struck down a Vermont law that prevented pharmacies from selling marketers records of prescriptions written by doctors. Vermont had passed the law in the name of protecting the privacy of doctors (patients' names were always "anonymized" when the information was distributed), but the Supreme Court ruled that the law didn't protect privacy as much as shield doctors from so-called "detailing," or pharmaceutical manufacturers' promotional efforts.

In fact, Justice Anthony Kennedy, who authored the opinion, went out of his way to point out that Vermont allowed the information to be distributed to people other than marketers -- including researchers, insurers and journalists. A law that more broadly limited disclosure "would present quite a different case than the one presented here," Kennedy wrote. "Privacy is a concept too integral to the person and a right too essential to freedom to allow its manipulation to support just those ideas the government prefers."

Marketers as well as privacy advocates had thought that the Supreme Court's ruling in the case could offer clues about whether broader privacy laws would survive a challenge that they violate free speech rights. After all, any law restricting how people or companies can transmit information implicates the First Amendment.

The trade groups Association of National Advertisers, American Advertising Federation and American Association of Advertising Agencies even weighed in against the law. They argued in a joint brief that marketers have a constitutional right to collect information. "The First Amendment safeguards the entire communication process, including the gathering of data used to create a commercial or non-commercial message," the associations say in their brief.

But observers now say that the Supreme Court's decision is too tied to the specifics of the Vermont law to offer much in the way of guidance regarding how it views all privacy legislation. "Many of us had worried that the resulting decision would rely on broad statements equating data mining or processing with speech and placing a protective First Amendment blanket over many sensible privacy regulations aimed at those practices," wrote law professor Bill McGeveran. "Instead, the opinion repeatedly emphasizes that Vermont continued to allow most possible uses of prescription information and singled out detailing alone."

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