Edith Ramirez, the current Chairwoman of the US FTC (Federal Trade Commission), made a major speech on privacy at an industry event on August 19, 2013. Entitled “The Privacy Challenges of Big Data: A View from the Lifeguard’s Chair”, Chairwoman Ramirez made a number of salient points about the role of the FTC in protecting consumer privacy in the era of big data as well as issues with industry practices. It’s certainly worth a read if you are interested in the topic of privacy.
One particular point Chairwoman Ramirez made which caught our eye is her call for more transparency around the personal data. “Addressing the privacy challenges of big data is first and foremost the responsibility of those collecting and using consumer information. The time has come for businesses to move their data collection and use practices out of the shadows and into the sunlight.” We couldn’t agree more. With most people having only a limited window at best into what data is collected by the myriad of online entities (even identifying these entities can be a daunting task) they interact with and how, it is only natural that suspicion and fear is pervasive.
There is good reason behind this fear. Again, Chairwoman Ramirez makes the point quite well. She describes a problem which she refers to as “data determinism.” Pointing out that many privacy issues are not unique to big data, “There is another risk that is a by-product of big data analytics, namely, that big data will be used to make determinations about individuals, not based on concrete facts, but on inferences or correlations that may be unwarranted.” This is yet another iteration of the old GIGO (garbage in garbage out) computing problem. As big data techniques are used for such purposes as making decisions concerning credit ratings, insurance, employment, admissions to schools (all pointed out by Chairwoman Ramirez); if the algorithms aren’t firing off of the correct inferences, the consequences can be very real and detrimental.
One thing to consider about Chairwoman Ramirez’s call is that for many companies, particularly marketers, they really don’t want to handle personally identifiable information (PII) at all. If you are a company trying to reach consumers with targeted advertisements and/or offers, you are more interested in making sure your messages are being received by someone who fits a certain behavioral profile. Knowing exactly who they are is not necessary, and PII actually becomes a liability given the burden of having to protect it once you have it. As the FTC is likely to move to implement Chairman Ramirez’s call with regulations in the future, this burden is likely to increase for marketers operating in the US. As companies continue to develop their services and marketing campaigns in this digital world, it is best to design in privacy protection from the beginning to keep their liabilities to a minimum.