Antitrust Law Daily Wrap Up, PRIVACY NEWS: Rich discusses FTC actions to address Big Data challenges, (May 13, 2015)

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

In a speech entitled “Big Data: Shining a Light into the Black Box,” Jessica Rich, Director of the FTC Bureau of Consumer Protection, discussed Big Data and how the FTC is addressing the challenges that it presents. The address was presented Monday, May 11, at a Public Citizen event in Washington, D.C.

Rich began by explaining that Big Data refers to the coming together of three factors: (1) the collection of consumer data through Internet, social media, mobile devices, and sensors; (2) the plummeting cost of storing data, which has enabled and encouraged more collection and use of this data, with much of it being sensitive; and (3) the powerful new capability to analyze data to draw connections and make inferences and predictions. She referred to this as the “three V’s”—volume, velocity, and variety of data. Rich stated that that, because of the rapid rate at which each is proliferating, data can be used and analyzed in ways that were not previously possible.

According to the official, Big Data is increasingly being used to make decisions about a wide range of issues affecting consumers. She identified benefits of this use, such as the development of alternative credit scores for consumers who do not have traditional credit histories; the increased access to education by identifying students for advanced classes or who are need of help; and health and safety benefits. She then went on to discuss how Big Data can be used to deny credit, educational opportunity, and health benefits to consumers. Rich also noted that consumers are being targeted by scam artists using detailed sensitive consumer data purchased from other companies.

The bureau director then gave examples of what the FTC has been doing to address the challenges that Big Data presents to consumers. She discussed a report on an in-depth study of nine data brokers, representing a cross-section of the industry. She then noted an FTC Big Data workshop that examined how the use of Big Data is benefiting consumers or excluding them from the marketplace.

Rich identified laws that address uses of Big Data that harm consumers: the Fair Credit Reporting Act (FRCA); the Equal Credit Opportunity Act (ECOA); and the FTC Act. She then discussed how these acts relate to protecting consumers from Big Data harm. She also discussed specific actions that the FTC has taken to enforce the FRCA and the FTC Act.

Rich noted that these laws have significant gaps and identified limitations of the FRCA and the ECOA. However, real progress can be made by educating businesses and the public about what the existing laws require, enforcing these laws, and raising public awareness of Big Data practices, she said. The bureau director concluded by noting that the FTC is using all of these tools.

News: Privacy FederalTradeCommissionNews