Antitrust Law Daily Wrap Up, PRIVACY NEWS: Commissioner Ohlhausen discusses the power of big data and its implications for privacy, (Apr 22, 2014)

By Linda O’Brien, J.D., LL.M.

The FTC will serve an important role in protecting consumers and promoting innovation as society adapts to the creation of massive amounts of data, stated FTC Commissioner Maureen Ohlhausen in an April 22 speech before the Georgetown University McCourt School of Public Policy and Georgetown Law Center’s Privacy Principles in the Era of Massive Data conference in Washington, D.C.

Ohlhausen began her remarks, entitled “The Power of Data,” by noting that massive amounts of data has been created by the integration and adoption of increasingly powerful computers and pervasive communication networks. Tools that enable society to collect and analyze this “big data” promise to provide significant benefits for consumers, businesses, and government. Although some potential uses of big data raise concerns about privacy and other values, the concerns can be addressed through a coalition of academics, regulators, businesses, and consumers.

“So what is big data?” asked Ohlhausen. It is information transformation, storage, and retrieval; machine learning and data mining; pattern recognition; distributed computing; and specific technology that can be used to draw insights from data. Big data is data that has three characteristics—large volume, significant variety, and high velocity. Big data is not completely new. Large companies have been collecting and analyzing consumer data since the early 1990's, Ohlhausen noted.

Privacy and other concerns. Like many new technologies, big data raises concerns about how current laws will protect consumers, Ohlhausen stated. Some consumer and privacy advocates are concerned that consumers will suffer harm from other uses of big data. These concerns generally fall into three categories. First, some of the concerns about big data apply to data more generally, and the FTC has been actively addressing these issues for years. Second, big data does raise some genuinely new challenges, particularly about how the Department of Health, Education, and Welfare’s Fair Information Privacy Practices (FIPP) framework can be adapted to work with big data. Third, there are concerns over fairness and discrimination in big data. Whether specific prohibitions on impermissible uses could help protect consumers while enabling continued innovation in big data should be explored, in Ohlhausen’s view.

FTC’s role in big data. The FTC can help ensure that the promise of big data is realized by using its unique set of enforcement and policy tools, according to Ohlhausen. First, the FTC is an enforcement agency and it can and should use its traditional deception and unfairness authority to stop consumer harms that may arise from the misuse of big data. Second, the FTC can use its convening power, policy, and research and development functions to better understand big data technology; the new business models it may enable; the applicability of existing regulatory structures, including self-regulation; market dynamics; and the nature and extent of likely consumer and competitive benefits and risks.

The FTC uses various institutional tools to engage with big data issues, and two principles should guide its work, in Ohlhausen’s view. First, as with all dynamic markets, the FTC must approach big data technologies with regulatory restraint. Second, the FTC must identify substantial consumer harm before taking action. Ultimately, the Commission should help strengthen competition and the market to better provide beneficial outcomes in response to consumer demand, rather than try to dictate desired outcomes to the market.

Many of the concerns raised by big data are suitably handled by current law and policy. Ohlhausen noted that where there are new issues, regulators need to work to understand the issues deeply and focus enforcement actions on situations where improper use of consumer information causes substantial harm. This approach will free entrepreneurs to innovate with big data tools while simultaneously helping to ensure that consumer privacy remains protected, Ohlhausen concluded.

News: Privacy FederalTradeCommissionNews