Antitrust Law Daily Wrap Up, PRIVACY NEWS: Ohlhausen provides perspective on big data to NTIA, (Aug 6, 2014)

By Greg Hammond, J.D.

FTC Commissioner Ohlhausen furnished the National Telecommunications and Information Administration (NTIA) with a letter, disclosing her perspective on big data, consumer privacy, and the consumer bill of rights. The Commissioner’s letter was issued yesterday, in response to NTIA request for comment.

According to Ohlhausen, the trend of increasing data volume, variety, and velocity will only continue. As big data techniques provide the government and public with the ability to extract knowledge from data, enabling us to “better understand ourselves and the world around us,” it also raises concerns regarding consumer privacy. However, the Commissioner suggests that big data be kept in perspective. Specifically, she notes that big data has a number of benefits—such as customized user recommendations on merchant websites; predicting commute times; identifying potential causes of disease; and detecting and preventing credit card fraud—but also presents some challenges, such as being misleading or failing to actually represent the real world. To Ohlhausen, maintaining a “realistic understanding of big data’s potential will help policy makers to identify and focus on actual harms to consumers, if they occur.”

Privacy concerns. In her letter, Ohlhausen suggests that big data privacy concerns fall into three categories: (1) concerns that are not unique to big data; (2) concerns that raise new issues over fair information practice principles (FIPPs); and (3) non-privacy concerns.

Data breaches are a main concern among consumers for both big and small data, the Commissioner noted. In addition, many groups suggest that data regarding children, health, or finances deserve heightened protection. However, Commissioner Ohlhausen notes that the FTC already recognizes the need to effectively protect data “and current laws and FTC enforcement reflect that policy.”

However, the Commissioner concedes that big data does raise new issues, especially when considering FIPPs. Ohlhausen wrote, “[M]aximizing the benefits of big data may create tension with the notice and the purpose limitation principles in the FIPPs,” as well as the FIPPs principle of data minimization. However, she suggests that de-identification techniques, such as anonymization, could help mitigate some of the risks of comprehensive data retention, while permitting innovative big data analysis to proceed. “I believe FIPPs remains a solid framework and is flexible enough to accommodate a robust big data industry, but we have some work to do to resolve these tensions,” she said.

The FTC’s role in big data. According to the Commissioner, the FTC is working to allow the promise of big data to materialize by using its enforcement and policy tools. Specifically, she notes that the Commission “can and should” use its deception and unfairness authority to stop consumer harm that arises from the misuse of big data. In addition, the FTC is using 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.”

Moving forward, Commissioner Ohlhausen sets forth two principles she believes should guide the FTC’s work: (1) policy makers must approach big data technologies with “regulatory humility,” and (2) policy makers must identify substantial consumer harm before taking action.

News: Privacy FederalTradeCommissionNews