Ethics Can Build Marketing Trust, Privacy Reputations in Big Data Age

Bloomberg Law: Privacy & Data Security brings you single-source access to the expertise of Bloomberg Law’s privacy and data security editorial team, contributing practitioners,...

By Jeremy Hainsworth

Feb. 13 — Although companies are becoming more comfortable dealing with trust and reputation issues related to privacy and marketing, governments remain the ethicists in the domain, and that needs to change in an age of big data, speakers said Feb. 13 at the 16th Annual Privacy and Security Conference in Victoria, British Columbia.

“The board room is starting to understand that,” Richard Purcell, chief executive officer of the Corporate Privacy Group and formerly the first privacy officer at Microsoft Inc., told Bloomberg BNA Feb. 13 on the sidelines of the event, which was sponsored by the office of the chief information officer for the BC provincial government.

Oracle Corp. Vice President for Global Public Policy and Chief Privacy Strategist Joe Alhadeff told attendees that the advent of big data and its potential to use massive amounts of information to the marketplace means privacy decisions, such as those involved in privacy by design principles, cannot be left in the hands of technologists building online systems.

Privacy by design principles need to be addressed in a privacy ecosystem evolution, he said.

“The technologist is executing something,” Alhadeff said. The privacy by design process “has to be much further up in the corporate architecture. It cannot be left up to the technologists.”

Big data poses a special challenge because specific privacy questions may become apparent only when information is compiled through big data analytics, he said.

That makes data subject consent important, Alhadeff said. “You don't know what you're asking for at the start so consent is an issue,” he said.

Building Trust 

But even with consent, “what do you do to ensure data is managed properly?” to ensure long-term trust, he said. That is where ethics and societal risk come into the equation, he said.

“We're now beginning to understand there is an impact on the customer and their data,” he said. “This is not being factored in. I think this is a societal conversation we're not having across a range of stakeholders,” Alhadeff said.

“Who is it that says there is a societally beneficial use of data?” he asked. “This is always an uncomfortable decision for some. Government at the moment is the arbiter by proxy.”

Big Data Value 

It is unclear whether consumers understand the value proposition of big data analytics, Alhadeff said.

“That's an opaque value proposition as the conversation hasn't been engaged,” he said.

Ryan Calo, a professor at the University of Washington School of Law in Seattle, said privacy proponents and those supporting marketing haven't historically gotten along well. But markets need to have privacy in order to continue functioning, he said.

“Privacy gets in the way of perfect information,” he said.

If a consumer discovers that his or her personal information is being sold, it may kill a transaction, Calo said.

“It will narrow the number of people you can transact with,” he said. “Privacy helps focus on the quality of the goods.”

If consumers trust how their data may be used for positive big data outcomes, they may be willing to open up to the use of their data. Establishing a system that protects privacy engenders that sharing process, Calo said.

Relying on Reputation 

Economists would argue that businesses don't need trust if they have reputation, Calo said.

But “you don't want to be in a relationship with some profit-maximizing machine,” he said. “You want to be in a relationship with someone you can trust.

Privacy helps make that happen.”

Purcell agreed, saying that trust is a primary factor in relationships across the board. “Whether it's success in personal relationships, whether it's success in community involvement, or whether its success in commercial enterprise or even institutional services, trust is the underlying success factor,” he said.

“Trust exists in an ethical framework,” Purcell said. Privacy, data security, availability of data and reliability of data systems “are all factors of trust,” he said.

To contact the reporter on this story: Jeremy Hainsworth in Vancouver at correspondents@bna.com

To contact the editor responsible for this story: Donald G. Aplin at daplin@bna.com