Big Data Report Highlights Businesses’ Compliance Questions

    Feb 10, 2016

    How can companies use big data in a way that benefits them and society while minimizing legal and ethical risks? That was one of the questions posed by the Federal Trade Commission (FTC) in a report released on January 6 on the challenges businesses face in the use of big data analytics.

    “Big data’s role is growing in nearly every area of business, affecting millions of consumers in concrete ways,” said FTC Chairwoman Edith Ramirez. “The potential benefits to consumers are significant, but businesses must ensure that their big data use does not lead to harmful exclusion or discrimination.”

    The report, which looks specifically at how big data is used after being collected and analyzed, draws on information from FTC seminars, public comments, public research, and a workshop in 2014 that explored the use of big data and its impact on American consumers, including low income and underserved consumers.

    The compliance-related questions in the report focus on, among other things, maintaining reasonable security over consumer data, treating people similarly regardless of race or national origin, honoring promises made to consumers, and providing material information about data practices. The report also raises policy questions designed to help companies determine how best to maximize the benefit of their big data use while limiting possible harms. 

    To protect against hidden biases and unintended negative impacts, the report urges companies that use or are considering the use of big data analytics to take steps to ensure that data sets include information from all populations. The report also encourages firms to provide human oversight over data that is used to make health, credit, and employment decisions and to ensure that fairness and ethical considerations are made in advance.

    Although the report was approved unanimously, one commissioner, Maureen Ohlhausen, urged the FTC staff to bring more rigorous economic analysis to the discussion of big data.

    “To understand the benefits and risks of tools like big data analytics, we must also consider the powerful forces of economics and free-market competition,” she said in a separate statement. “If we give undue credence to hypothetical harms, we risk distracting ourselves from genuine harms and discouraging the development of the very tools that promise new benefits to low income, disadvantaged, and vulnerable individuals.”

    While not expected, some industry observers believe it is possible that the FTC will issue formal guidance on big data and consumer protection in 2016.

    The Washington Policy Brief is an online advisory that contains brief summaries of recent legislative and regulatory issues that may affect the records and information management profession. Further information about the issue is accessed by clicking on the link provided at the end of each summary.


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