Consumers Need Protection From Data Abuse: White House

Photographer: Ben Torres/Bloomberg

Public, private, and management data wires lead to servers at a data center in Dallas. Close

Public, private, and management data wires lead to servers at a data center in Dallas.

Close
Open
Photographer: Ben Torres/Bloomberg

Public, private, and management data wires lead to servers at a data center in Dallas.

The Obama administration’s proposal to protect consumers from online data-mining abuse by companies failed to include timelines for action and was met by some industry opposition, two factors that may derail the effort.

In a broad review of data collection by companies and the government, the administration made six recommendations yesterday to protect people’s privacy, including a consumer bill of rights and national standards for data-breach notifications. It also called for amending a law under which the government can obtain e-mails on criminal suspects through court warrants.

While some industry and consumer groups embraced findings that data can be used in good ways, privacy groups questioned whether the White House would follow through on addressing the more dangerous uses. At least three recommendations require congressional approval. John Podesta, the presidential adviser who led the review, said he wasn’t sure when that could happen.

“The administration should be praised for raising critical questions and making this issue more public, but at the end of the day there doesn’t seem to be any real serious action plan that would protect American’s privacy from big data,” said Jeffrey Chester, executive director of the Center for Digital Democracy, a Washington-based advocate for privacy rights.

Podesta told reporters on a conference call that he hoped lawmakers would “expeditiously” move.

Some recommendations don’t need congressional approval, and could be done within a year, such as getting the White House Office of Management and Budget to extend privacy protections to non-U.S. citizens, Podesta said.

Data Collection

“Data is collected from a wider variety of sources than ever before,” Podesta said on the conference call. He said sensors embedded in common devices like handheld smartphones and home appliances “constantly share information about our surroundings, our health and our whereabouts.”

Big data is big money for companies. Each piece of data a person shares online has measurable value that has helped to build an industry with $156 billion in revenue in 2012, according to a report from the New York-based Direct Marketing Association.

The use of tracking cookies -- small bits of computer code that are implanted in people’s Internet browsers when they visit a website -- allows companies to continuously update dossiers of users’ behavior, even when they’re not on the companies’ own websites or not logged in to the services.

Civil Rights

The report “rightly recognizes” that discrimination and inequality “can be amplified by large-scale data analysis,” Christopher Calabrese, a lawyer for the American Civil Liberties Union, said in an e-mailed statement.

“We must remain vigilant to ensure that groups like racial minorities are helped by big data, not further marginalized by it,” Calabrese said.

Data can be used in good ways to revolutionize commerce and help people, said Wade Henderson, president and chief executive officer of The Leadership Conference on Civil and Human Rights in Washington.

The administration report “is a welcome step forward in acknowledging the need for rules of the road for the public and private institutions whose decisions can ultimately protect or deny civil and human rights,” Henderson said in an e-mail.

The review is intended to further discussion about privacy in the Internet age, an issue that swelled last year after the U.S. government’s data-spying programs were revealed in leaks of intelligence documents by contractor Edward Snowden. Podesta said he didn’t address whether to restrain or change National Security Agency spying because that was being examined elsewhere within the administration.

Outdated Approach

The U.S. view of big data has been “mired in 20th-century thinking,” said Alex Fowler, the leader of global privacy and public policy for Mozilla Corp., the Mountain View, California-based maker of the Firefox Web browser.

“We strongly urge the Obama administration to stay focused on surveillance reform to help restore trust on the Internet,” Fowler said in an e-mailed statement yesterday.

The report’s six policy recommendations also included protecting students against having their data shared or used inappropriately.

New and updated laws are needed to ensure consumer privacy is protected and companies don’t use data collected to discriminate in hiring or to artificially inflate prices on goods and services, according to the report.

“While big data can be used for great social good, it can also be used in ways that perpetrate social harms or render outcomes that have inequitable impacts, even when discrimination is not intended,” according to the report.

The Software & Information Industry Association praised the report for recognizing the benefits of companies using data to innovate, while saying there’s no need to change the law.

“Burdensome new legal requirements would only impede data-driven innovation and hurt the ability of U.S. companies to create jobs and drive economic growth,” Mark MacCarthy, president of public policy for the Washington-based trade association, said in a statement.

To contact the reporter on this story: Chris Strohm in Washington at cstrohm1@bloomberg.net

To contact the editors responsible for this story: Romaine Bostick at rbostick@bloomberg.net; Bernard Kohn at bkohn2@bloomberg.net Elizabeth Wasserman

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.