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Governator Arnold Schwarzenegger has vetoed — okay, okay, "terminated" — a proposed California state law, AB 779, which would imposed stronger consumer data protection on California businesses. Why? Because the law was overly broad and confusing. Too bad. A host of businesses would actually benefit from strict privacy laws. Why? Because actually extracting a business advantage from consumer data is extremely tough. Laws that hamstring their savvier competition would actually benefit the vast number of companies who have no clue how to violate their customers' privacy for fun and profit.

What's the reality of privacy, beyond all of the Internet-activist scare campaigns? Consumers want their information protected, in theory, and yet sell out their privacy in a heartbeat to save a buck. Businesses have to worry about keeping data safe from hackers while making it available to employees.

California state legislators crafted a Draconian bill and made data protection the responsibility of businesses. Governor Schwarzenegger would prefer the state government work with business to establish a standard and allow self-regulation. Self-regulation seems like a reasonable goal because the businesses themselves have learned to use privacy as a marketing issue — a smart ploy, again, when you're falling behind in actually exploiting private data.

Microsoft and rival search engine Ask have tried to disparage Google for the search engine's use of consumer data to target ads. Never mind that they'd like to do the same, if they could only figure out how. Google is willing to take further steps to protect user data — but only if everyone agrees on a universal standard. And so the competition continues to bash them. Consumers fret over Street View photographs on Google Maps displaying their butt cracks, while they happily sign up to personalize Google searches.

In politics as well as business, a free market should reign. Google's competitors can nip at its heels and tie up its lobbyists in fighting privacy-protection bills. That's the way our money-driven democracy works, after all. The statehouse, in the end, is just another field of battle.