Keep up with the latest developments and legal issues in the telecommunications and emerging technology sectors, with exclusive access to a comprehensive collection of telecommunications law news,...
By Joseph Wright
Jan. 6 — Companies supplying big data analytics services must be aware of inherent data biases that could implicate a host of federal consumer protection laws, the Federal Trade Commission said in a Jan. 6 report.
“Big data's role is growing in nearly every area of business, affecting millions of consumers in concrete ways,” FTC Chairwoman Edith Ramirez said in a statement. “The potential benefits to consumers are significant, but businesses must ensure that their big data use does not lead to harmful exclusion or discrimination.”
In its report, “Big Data: A Tool for Inclusion or Exclusion?,” the FTC encouraged big data suppliers to consider a range of questions when using big data, including:
Failure to consider these issues could trigger liability under a wide range of consumer protection statutes, the FTC said. Those include the Equal Credit Opportunity Act, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Fair Housing Act and the Genetic Information Nondiscrimination Act.
Companies that fail to disclose properly how they use big data also risk violating Section 5 of the FTC Act, the agency said.
Observers told Bloomberg BNA that the FTC report contained worrisome language suggesting an expansion of unfair trade practices liability for big data suppliers. The FTC remarked that big data suppliers could violate the FTC Act by selling big data services if they have a reason to know the data will be used for fraudulent or discriminatory purposes.
That assertion should raise eyebrows, Berin Szoka, president of technology policy think tank TechFreedom in Washington, told Bloomberg BNA Jan. 6.
“A lot of this conversation is distorted because the word ‘discriminatory' is inherently ambiguous,” Szoka said. “All of these companies are in the business of selling ‘discrimination' in the broader, benign sense.”
The FTC has been known to “bury” language within reports that contains new interpretations of Section 5 and they may be doing so here, Szoka said.
“I'd be pretty surprised if the standing rule today was that you could be held to have committed an unfair trade practice because one of your customers did something unfair with the data,” Szoka said.
The FTC focused on making the private sector aware that new technology doesn't render existing consumer protections obsolete, Daniel Castro, vice president of the Information Technology and Innovation Foundation in Washington, told Bloomberg BNA Jan. 6.
FTC Commissioner Maureen Ohlhausen submitted a statement accompanying the report, pointing out that market forces may eliminate many of the consumer protection issues identified in the report. Ohlhausen's statement was “helpful,” Castro said.
“She pointed out that while there are potential problems caused by big data, there are also many ways that these potential problems could be resolved by competitive markets,” Castro said. “So there is no need for policymakers to rush into action until there is actual evidence of consumer harm warranting government intervention.”
The FTC held a series of information-gathering workshops on “big data” privacy issues beginning in February 2014 ((19 ECLR 267, 2/26/14)).
The White House has also been active on big data policy issues, releasing reports in February 2015 discussing both privacy and consumer protection-related concerns raised by big data's ability to permit sellers to engage in “differential pricing” strategies (20 ECLR 221, 2/11/15).
To contact the reporter on this story: Joseph Wright in Washington at email@example.com
To contact the editor responsible for this story: Thomas O'Toole at firstname.lastname@example.org
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)