The White House this month released its long-awaited report on big data: "Big Data: Seizing Opportunities, Preserving Values". The report was requested by President Barack Obama and addresses the ways in which technological advances are rapidly evolving to allow for the collection, storage, and analysis and use of vast amounts of data - so-called big data - by both government and the private sector. The report highlights the potential benefits - for government, business and individuals in the U.S. - and the potential threats to individual privacy and equality that big data may provide, both now and in the future. It also advocates legal, policy and regulatory initiatives to protect citizens - both in the U.S. and globally - from potential abuses of big data.
Government Use of Big Data
The report discusses how government, at the federal, state and local levels, may use advanced technology and big data to improve the provision of their services across a number of areas including health care and education, as well as crime prevention and detection. However, the often personal nature of the information collected and used by government in these areas raises concerns about individual privacy, specifically about the areas of equal protection and the Fourth Amendment right against unwarranted searches. To ensure the protection of individual rights, the Advisory Council advised that the use of big data by the government be subject to ongoing assessment.
Private Sector Use of Big Data
Chief among the concerns the study identifies is the potential for "silent" discrimination against minorities as a result of the use of data for "perfect personalization" - which the report describes as the fusion of many small bits of different kinds of data, processed in real time, to create a clear picture of a person to predict preferences or behaviors. Given the powerful capacity the private sector now has to collect information and use it to profile individuals, the current lack of regulation in this area presents a number of risks, including the risk that demographic information and consumption patterns could serve as proxies for racial or socioeconomic status, which could lead to covert discriminatory practices, including racially biased advertising, pricing or product offerings, as well as decision making in housing, credit, health care, employment and education based on data-derived assumptions about race and socioeconomic status. ..."
In addition to highlighting the benefits and risks of big data, the report advances a number of policy recommendations, including:
- Advancing the Consumer Privacy Bill of Rights. The White House instructs the Department of Commerce to seek public comment on the Consumer Privacy Bill of Rights, including how it could be amended to include big data. Following the comment process, the Department of Commerce should work on draft legislation to be submitted to Congress by the President;
- Passing legislation providing for a single, national data-breach standard, in lieu of the increasing patchwork of state laws. This recommendation echoes the statements by the FTC and the Attorney General for the need for a national data-breach standard;
- Extending privacy protections to non-U.S. citizens;
- Ensuring that data collected in K-12 schools is used only for appropriate educational purposes. As part of this recommendation, the Advisory Council advocates that the federal government explore how to modernize both the Family Educational Rights and Privacy Act and the Children's Online Privacy Protection Act;
- Deploying the federal government's civil rights and consumer protection agencies to expand technical expertise to prevent the use of data in a discriminatory fashion, either in intent or impact; and
- Amending the Electronic Communications Privacy Act to "ensure the standard of protection for online, digital content is consistent with that afforded in the physical world."
This client alert is a publication of Loeb & Loeb LLP and is intended to provide information on recent legal developments. This client alert does not create or continue an attorney client relationship nor should it be construed as legal advice or an opinion on specific situations.
Circular 230 Disclosure: To assure compliance with Treasury Department rules governing tax practice, we inform you that any advice (including in any attachment) (1) was not written and is not intended to be used, and cannot be used, for the purpose of avoiding any federal tax penalty that may be imposed on the taxpayer, and (2) may not be used in connection with promoting, marketing or recommending to another person any transaction or matter addressed herein.