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August 14, 2014

FTC Expands Scrutiny of Big Data Practices

George Leopold

The Federal Trade Commission (FTC) is stepping up its scrutiny of big data practices as concerns grow about misuse of private data collected by banks, retailers and other enterprises.

The regulatory agency’s Bureau of Consumer Protection is hosting a Sept. 15 workshop. “Big Data: A Tool for Inclusion or Exclusion?” The event comes in response to growing concerns about individual privacy as mobile devices, cloud computing and predictive analytics techniques proliferate. FTC said it would examine whether big data is being used “to categorize consumers in ways that may affect them unfairly, or even unlawfully.”

“A growing number of companies are increasingly using big data analytics techniques to categorize consumers and make predictions about their behavior,” FTC Chairwoman Edith Ramirez said in a statement announcing the workshop.

“As part of the FTC’s ongoing work to shed light on the full scope of big data practices, our workshop will examine the potentially positive and negative effects of big data on low income and underserved populations,” Ramirez added.

FTC and other government agencies have been taking a closer look at how big data technologies effect the economy as well as individual privacy. The Obama administration has been at the forefront of efforts to leverage government data to boost economic growth. But some efforts, like a proposed healthcare database, have generated a consumer backlash focusing on “data brokers” who can gain access to personal medical records.”

While there has been much recognition for the value of big data in revolutionizing consumer services and generally enabling non‐obvious, unexpectedly powerful uses of information, there has been parallel focus on the extent to which practices and outcomes facilitated by big data analytics could have discriminatory effects on protected communities,” privacy attorney Meena Harris noted in a recent post to the web site InsidePrivacy.com

The FTC said its workshop also would examine how businesses use big data to categorize customers and whether consumers benefit or are harmed by these practices. It also will consider the economic impact of using big data to pigeonhole consumers, and whether big data companies are assessing the impact on “low income and underserved populations.”

Lastly, the workshop will consider how existing privacy and other laws apply to such big data practices and whether gaps exist in the current privacy law framework.

The FTC workshop follows the release in May of a White House report outlining the administration’s priorities for protecting privacy and maintaining data security as big data technology enters the mainstream.

“Aside from how we define big data as a technological phenomenon, the wide variety of potential uses for big data analytics raises crucial questions about whether our legal, ethical, and social norms are sufficient to protect privacy and other values in a big data world,” the White House big data report stressed.

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