Antitrust Law Daily Wrap Up, PRIVACY NEWS: FTC Chairwoman Ramirez addresses “big data” and privacy protection risks and solutions, (Jun 11, 2015)

By Michael Menzhuber, J.D., LL.M.

Federal Trade Commission (FTC) Chairwoman Edith Ramirez discussed the topic of “big data” in her speech entitled “Protecting Privacy in the Era of Big Data”, given at the International Conference on Big Data from a Privacy Perspective on June 10, 2015, in Hong Kong. She explained that while “big data” has the potential for big benefits, it also has the potential for big risks and, in her view, a multifaceted approach is necessary in order to harness the transformative elements of the “big data” revolution while addressing the potential risks to consumer privacy.

Ramirez highlighted the life cycle of “big data” by discussing how information is collected, compiled, analyzed, and used. She noted the “three Vs” in the context of “big data”: volume, velocity and variety. Beginning with “collection”, she explained that volume and variety of data stem from the widespread collection and compilation of smaller data. She also explained that data collection is not limited to computers and mobile devices and gave examples of how consumers can be followed across the Internet of Things and through brick-and-mortar data collection.

Ramirez then noted how “big data” is compiled. She gave examples of entities that compile data and highlighted the largest category of these entities - data brokers. She next discussed “analytics” and gave examples of how data brokers use the information that they obtain to put consumers in categories. She then discussed the final step in the life cycle of “big data” – “use.” After giving examples of how data is used, Ramirez addressed both the benefits and risks when data is used to draw inferences about customers.

After concluding her “life cycle” discussion, Ramirez identified and discussed three key risks of “big data”: (1) the lack of transparency and loss of consumer control; (2) unexpected and unwelcome use of data; and (3) data security.

Ramirez then discussed solutions to “big data” risks. She explained that the FTC addresses many of these risks through law enforcement. She identified Section 5 of the FTC Act, which prohibits “unfair and deceptive acts or practices”, as the FTC’s main enforcement statute. She also noted that the FTC is the primary enforcer for the Fair Credit Reporting Act (FCRA), one of the first laws to specifically address “big data” practices, and also an enforcer of the Equal Credit Opportunity Act (ECOA).

She noted, however, that these laws are not a perfect fit for today’s marketplace and gave examples of protection gaps in Section 5, the FCRA and the ECOA. She expressed her belief that the FTC must go beyond the enforcement of existing laws and stated that she will continue to urge the enactment of comprehensive privacy and data security legislation. She also recommended that businesses take the following three steps: (1) step up efforts to provide consumers with transparency and choice; (2) take reasonable steps to safeguard consumers’ personal information; and (3) use “big data” responsibly and in ways that do not discriminate against or adversely affect vulnerable populations.

Ramirez concluded by expressing the need to: (1) learn and raise public awareness about the way “big data” is collected and used; and (2) find ways to make “big data” decision-making about consumers more transparent.

News: ConsumerProtection Privacy FederalTradeCommissionNews