Watch what you do with that big data, FTC warns businesses

'We need systems for auditing the proprietary algorithms,' an ACLU attorney says

If your company uses big data, be aware: the FTC is watching, and it's concerned.

For all its potential benefits, big data can lead to discrimination and worsen economic disparity, the Federal Trade Commission warned in a new report that includes caveats and guidelines for businesses. Entitled "Big Data: A Tool for Inclusion or Exclusion?" the report stems from a 2014 FTC workshop by the same name and incorporates the public comments that followed.

Among the report's conclusions is that big data can benefit under-served populations through better opportunities for education, credit, health care and employment. On the flip side, however, it can lead to reduced opportunities and the targeting of vulnerable consumers for fraud and higher prices.

Overall, big data can end up perpetuating existing economic disparities or creating new ones, the FTC said.

“Big data’s role is growing in nearly every area of business, affecting millions of consumers in concrete ways,” said Edith Ramirez, chairwoman of the FTC. “Businesses must ensure that their big data use does not lead to harmful exclusion or discrimination.”

Toward that end, the FTC outlined some of the laws that apply to the use of big data, including the Fair Credit Reporting Act, the FTC Act and equal opportunity laws. It also offered a range of questions for businesses to consider when they examine whether their big data programs comply with these laws.

Four key policy questions proposed in the report, meanwhile, aim to help companies determine how best to maximize the benefit of their use of big data while limiting possible harms.

Last year, the FTC's Bureau of Consumer Protection established the Office of Technology Research and Investigation dedicated to understanding algorithmic transparency and other related issues. This week at CES, Ramirez also spoke out to urge companies to expand their privacy efforts. 

Market researcher Gartner predicts that the improper use of big data analytics will cause half of all business ethics violations by 2018.

The FTC's new report is available for download from the FTC site.

The Equal Credit Opportunity Act has been a key tool in the battle against algorithmic discrimination, said Rachel Goodman, a staff attorney for the American Civil Liberties Union's Racial Justice Program, in an email.

"Communities of color have long been victimized by credit discrimination, alternately starved of credit or flooded with predatory loans, depending on the era," Goodman explained.

It will be just as crucial for combating what's known as "digital redlining," which is the newest form of credit discrimination, she said.

Also important is that the report recognizes that predictive analytics may lead companies to engage in discrimination that violates civil rights laws, Goodman pointed out.

"While it rightly urges companies to be careful not to discriminate, self-monitoring is not enough," Goodman said. "We need systems for auditing the proprietary algorithms that make crucial decisions about housing, credit and employment, in order to ensure that they treat everyone fairly."

Join the PC World newsletter!

Error: Please check your email address.

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Katherine Noyes

IDG News Service
Show Comments

Cool Tech

Crucial Ballistix Elite 32GB Kit (4 x 8GB) DDR4-3000 UDIMM

Learn more >

Gadgets & Things

Lexar® Professional 1000x microSDHC™/microSDXC™ UHS-II cards

Learn more >

Family Friendly

Lexar® JumpDrive® S57 USB 3.0 flash drive 

Learn more >

Stocking Stuffer

Plox Star Wars Death Star Levitating Bluetooth Speaker

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest News Articles

Resources

GGG Evaluation Team

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Steph Mundell

LIFEBOOK UH574

The Fujitsu LifeBook UH574 allowed for great mobility without being obnoxiously heavy or clunky. Its twelve hours of battery life did not disappoint.

Andrew Mitsi

STYLISTIC Q702

The screen was particularly good. It is bright and visible from most angles, however heat is an issue, particularly around the Windows button on the front, and on the back where the battery housing is located.

Simon Harriott

STYLISTIC Q702

My first impression after unboxing the Q702 is that it is a nice looking unit. Styling is somewhat minimalist but very effective. The tablet part, once detached, has a nice weight, and no buttons or switches are located in awkward or intrusive positions.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?