[crandycodes]

It is rational for governments to be defensive of practices which externalize costs onto 3rd parties, and they have to balance it with a number of factors including innovation.

It is easier to understand this with health, as compared to privacy, I think. The meat packing industry used to use substances such as formaldehyde to preserve meat longer. This wasn't transparent to the end customers and the health issues lead to lower productivity of the population as a whole. Soldiers eating this meat lead to lower fighting capabilities and higher illness. The meat packing industry fought against any transparency here knowing that it would hurt their profits. After an enormous amount of advocacy over decades, there was regulation added. There is a balance here - some substances are outright banned and some are just required to be documented on the food. This makes sense, in my opinion, because we can't expect every person to be a food chemist and know what's good and not good. Market makers have relatively large amounts of money to spend to confuse customers with misinformation, if given the option.

Applying this to privacy, the question that governments have to find out is what is fair for end users to be allowed to make a choice on and what is outright harmful such that a rational, informed person wouldn't make that choice. It is a tricky thing to get right and this bill may be overreach, but that is the nature of government and any policy - iteration. But there is always a place for a government to be in the market. Otherwise the market will be dictated by the powerful, not the people. Without perfect information transparency and the ability to interpret that information, there is no such thing as a free market.