US FTC provides recommendations to businesses using Big Data

In what could serve as an example for regulators around the world, the US Federal Trade Commission (FTC) has come out with a comprehensive report sensitizing the businesses to ensure that their use of big data, while benefitting the customers, should not end up being exclusionary or discriminatory.

The report, while acknowledging a number of innovative uses of big data that are providing benefits to underserved populations, including increased educational attainment, access to credit through non-traditional methods, specialized health care for underserved communities, and better access to employment, outlines possible risks that could result from biases or inaccuracies about certain groups, thus becoming discriminatory.

Some of the specific risks mentioned in the report include

• more individuals mistakenly denied opportunities based on the actions of others
• exposing sensitive information
• creating or reinforcing existing disparities
• assisting in the targeting of vulnerable consumers for fraud
• creating higher prices for goods and services in lower-income communities and
• weakening the effectiveness of consumer choice.

The report actually lists laws that could apply to the use of big data, especially in regards to possible issues of discrimination or exclusion and a range of questions for businesses to consider when they examine whether their big data programs comply with these laws.

The report also proposes four key policy questions that are drawn from research into the ways big data can both present and prevent harms. The policy questions are designed to help companies determine how best to maximize the benefit of their use of big data while limiting possible harms, by examining both practical questions of accuracy and built-in bias as well as whether the company’s use of big data raises ethical or fairness concerns.

The report, Big Data: A Tool for Inclusion or Exclusion? Understanding the Issues looks specifically at big data at the end of its lifecycle—how it is used after being collected and analyzed, and draws on information from the FTC’s 2014 workshop, Big Data: A Tool for Inclusion or Exclusion?  FTC also considered extensive public comments and additional public research in compiling the report.

It is expected that the proactive approach from FTC could help resolve any ambiguity that may be there in application of big data by the businesses and help avoid any unintended harm to the same consumers for whom benefits are being provided.

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