FTC to Hold Workshop on Pros and Cons of Big Data Today

Washington Event Will Focus on Commercial Data Practices

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'Man Controlling Trade' outside the FTC
'Man Controlling Trade' outside the FTC

Like marketers, government has struggled to grasp how the massive influx of data flowing from digital media, our phones, and web-connected devices will affect consumers. The Federal Trade Commission will hold a public workshop today in Washington intended to evaluate the potential effects of data collection growth, analysis and use, particularly when it comes to commercial applications.

At issue is whether things like dynamic pricing, loyalty program benefits, credit scoring, ad targeting and other increasingly popular applications for data harm "underserved" communities such as minority and LGBT populations, and whether current laws suffice.

One thing the FTC aims to determine during today's "Big Data: A Tool for Inclusion or Exclusion?" event: what "big data" is exactly. "That's one of the things that might come out of this workshop," said Tiffany George, senior attorney at the FTC's Division of Privacy and Identity Protection. "Everyone has a definition of what big data is."

Speakers from academia, industry and privacy and consumer protection advocates will discuss how consumer data is used today, especially in commercial, financial services, and hiring contexts.

"This is as much of a learning exercise for us as it is for [marketers]," said Ms. George. The primary goal of the day-long workshop is to see what common themes "percolate to the top," she added.

The event is not a response to any quantified trends involving predatory marketing or financial practices. Rather, the commission wants to be aware of potential negative impact of modern data collection and use, which has become far more sophisticated recently with the proliferation of digital media and technological innovations allowing for the collection, storage, and analysis of data at a rapid-fire pace.

Robust evidence of harm resulting from this new data paradigm isn't available, said Scott Simpson, press secretary at the Leadership Conference on Civil and Human Rights. In conjunction with other organizations such as the ACLU and National Urban League, the organization in February released its "Civil Rights Principles for the Era of Big Data." They called for an end to "high-tech profiling" using surveillance tools, and more control for individuals over personal information.

While much of the conversation about data in government circles revolves around excessive data collection and its privacy implications, some suggest underprivileged groups could be harmed by a lack of data gathering. Daniel Castro, director of the Center for Data Innovation, suggests that low income and underserved communities are at risk if government and commercial entities fail to count them in -- along with the data they could generate.

"If certain groups routinely do not have data collected about them, their problems may be overlooked and their communities held back in spite of progress elsewhere," he wrote in his "Rise of Data Poverty in America" report published on Sept. 10 by the Center for Data Innovation. "Given this risk, policymakers should begin a concerted effort to address the 'data divide' -- the social and economic inequalities that may result from a lack of collection or use of data about individuals or communities."

He suggested, for instance, that a low-income car shopper who might otherwise not qualify for a loan could pose less of a risk to lenders if she agreed to have the vehicle tracked using GPS for repossession if car payments aren't made.

"The biggest issue is the fact that [the FTC is] designed to restrict the use of data rather than encourage beneficial use of it," he said. "We need to flip that model." Mr. Castro is speaking at today's workshop.

The FTC does not plan to issue any proposals or documents in relation to the workshop; however, it will accept comments on issues discussed during the event through Oct. 15.

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