Press Release FTC Seal

Published on January 6th, 2016 | by Joshua New

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The FTC Understands How Big Data Helps Empower Consumers, But Overstates Its Harms

WASHINGTON–In response to the Federal Trade Commission (FTC) releasing the report “Big Data: A Tool for Inclusion or Exclusion?” the Center for Data Innovation issued the following statement from Director Daniel Castro:

Big data is widely recognized as being one of the most powerful drivers of economic value by increasing productivity, unlocking innovation, and encouraging competition. However, industry observers have only recently begun to recognize the powerful role that big data can play to combat discrimination, reduce unfair bias, and promote social justice.

We welcome the FTC using this report to bring more attention to this important opportunity to use big data for social inclusion. For example, the FTC highlights the need to encourage data collection to establish representative data sets to overcome the problem of data deserts. The FTC has a powerful voice, and it should be commended for raising awareness about the power of big data to empower more consumers.

Unfortunately, the FTC also suggests that big data may be used to discriminate against consumers, both deliberately and inadvertently, without providing substantiating evidence that this is occurring in the real world. Notably, when it comes to the benefits, the FTC describes concrete examples of how big data is being used to create opportunities for low-income and underserved communities. But when it comes to the risks, the FTC does not identify any concerns which have not already been addressed by existing consumer protection laws. In short, the FTC report found many tangible examples of big data being used to empower consumers today, but it could only speculate about how consumers might be harmed.

In a separate statement, FTC Commissioner Ohlhausen correctly notes that competitive markets will often prevent some of the potential risks raised in the report. For example, if a company uses data badly and fails to offer eligible consumers products or services that they may want, this creates an opportunity for competitors with better data or algorithms to meet the needs of these consumers. In such a case, market forces will provide corrective action, and there is no need for government intervention.

Overall, while the FTC overstates the potential risk of companies using big data to discriminate against consumers, it rightly acknowledges that big data is a valuable tool to improve the lives of underserved populations and is already generating substantial benefits in areas such as public services, education, and healthcare. And the FTC recognizes that existing consumer protection laws, such as the Fair Credit Reporting Act, the Civil Rights Act, and the Americans with Disabilities Act, are capable of protecting against most potential harms, should they even arise. It is encouraging to see the FTC supportive of using existing laws to protect consumers rather than calling for new laws and regulations that could curtail big data’s many benefits, particularly in such an early stage of growth of the technology.

The Center for Data Innovation has been at the forefront of analyzing how big data can be used to benefit underserved communities and combat discrimination. See the following:

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About the Author

Joshua New is a policy analyst at the Center for Data Innovation. He has a background in government affairs, policy, and communication. Prior to joining the Center for Data Innovation, Joshua graduated from American University with degrees in C.L.E.G. (Communication, Legal Institutions, Economics, and Government) and Public Communication. His research focuses on methods of promoting innovative and emerging technologies as a means of improving the economy and quality of life. Follow Joshua on Twitter @Josh_A_New.



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