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Marketing Privacy: A Solution for the Blight of Telemarketing (and Spam and Junk Mail) (with Matthew Funk), 20 Yale Journal on Regulation 77 (2003)

Abstract

Unsolicited solicitations in the form of telemarketing calls, email spam and junk mail impose in aggregate a substantial negative externality on society. Telemarketers do not bear the full costs of their marketing because they do not compensate recipients for the hassle of, say, being interrupted during dinner. Current regulatory responses that give consumers the all-or-nothing option of registering on the Internet to block all unsolicited telemarketing calls are needlessly both over- and underinclusive. A better solution is to allow individual consumers to choose the price per minute they would like to receive as compensation for listening to telemarketing calls. Such a "name your own price" mechanism could be easily implemented technologically by crediting consumers' phone bills (a method analogous to the current debits to bills from 1-900 calls). Compensated calling is also easily implemented within current "don't call" statutes simply by giving "don't-call" households the option to authorize intermediaries to connect calls that meet their particular manner or compensation prerequisites.

Under this rule, consumers are presumptively made better off by a regime that gives them greater freedom. Telemarketing firms facing higher costs of communication are likely to better screen potential contacts. Consumers having the option of choosing an intermediate price will receive fewer calls, which will be better tailored to their interests, and will be compensated for those calls they do receive.

Giving consumers the right to be compensated may also benefit some telemarketers. Once consumers are voluntarily opting to receive telemarketing calls (in return for tailored compensation), it becomes possible to deregulate the telemarketers—lifting current restrictions on the time (no night time calls) and manner (no recorded calls). And faced with increasing caller resistance, we imagine that survey groups, such as the Gallop Poll, might welcome the opportunity to compensate survey respondents so that they might be able to produce more representative samples.

Date of Authorship for this Version

2003

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