The greater good vs. absolute privacy

In the White House working group’s recent report on “Big Data,” researchers take the view that not only must businesses and public entities safeguard their customers’ personal information, but that consumers themselves can take a more proactive role in the collection and use of their data.

The report raises an interesting point that is neglected by much of the media coverage of cyber risk and privacy issues. Can the collection of data by businesses coexist with privacy concerns, and should “the greater good” win out over absolute privacy of consumers?

“Increasingly precise data about consumers – where they are, what devices they use, and literally hundreds of categories of their interests – coupled with powerful analysis have enabled advertisers to more efficiently reach consumers,” the working group stated. “Expensive television slots or full-page national magazine ads seem crude compared to the precisely segmented and instantaneously measured online ad marketplace. One study suggests that advertisers are willing to pay a premium between 60 and 200 percent for online targeted advertising.”

An article published last August in the Media Law Resource Bulletin and authored by attorney Mark Sableman of Thompson Coburn suggested consumers prefer targeted advertising rather than irrelevant advertising.

“Our study suggests that in addressing consumer privacy issues, policymakers need to consider the real value to consumers of new technologies that allow consumers to receive advertisements directed to their interests. Recognition of this reality may have significant policy consequences. In particular, it suggests that policymakers should carefully balance the benefits from tailored advertising against consumer privacy concerns (rather than brush off such technologies as both invasive and unwanted, as consumer advocates have suggested),” noted the authors.

However, an annual poll of consumers also found confidence in online privacy has fallen. Fifty-eight percent of respondents to a TRUSTe survey in January 2014 said they are worried about their data security and will not even click on online ads.

Thirty-eight percent said they were more worried about government surveillance. Eighty-nine percent of respondents say they avoid companies that are perceived to be less than careful about their data.

Some consumers might not want to be collected into the data buckets developed by specialized data brokers – classifications noted in the White House Big Data report such as “Ethnic Second-City Strugglers,” “Retiring on Empty: Singles,” “Tough Start: Young Single Parents,” “Credit Crunched: City Families,” or “Rural and Barely Making.”

These categories could pinpoint the type of products that these customers would want, but the process has a negative connotation.

While the working group acknowledged misuse of data could result in discrimination, it could also help citizens assert their civil liberties.

“The same big data technologies that enable discrimination can also help groups enforce their rights,” the group said in its report. “Applying correlative and data mining capabilities can identify and empirically confirm instances of discrimination and characterize the harms they caused. The federal government’s civil rights offices, together with the civil rights community, should employ the new and powerful tools of big data to ensure that our most vulnerable communities are treated fairly.”

Even with relative broad transparency, some businesses harnessing personal data have run into roadblocks. For example, insurers hoping to launch usage-based automobile insurance programs (UBI) find some consumers like the idea of potential premium savings. For others, even UBI represents an invasion of privacy that leaves them uncomfortable.

The watchword for any company or entity gathering data has become “accountability.” Consumers, and the government, have the power and the responsibility to demand that transparency be added to the process. There has been little up until this point, leaving the specter of data breaches and data misuse to haunt the public.

“Because of this lack of transparency and accountability, individuals have little recourse to understand or contest the information that has been gathered about them or what that data, after analysis, suggests,” said the working group.