Will Increased Focus on Consumer Privacy Affect Big Data?

Guest Post by Bill Hess, from PixelPrivacy

Joe Public drives to his local Kroger store. As he drives, the app he downloaded from his auto insurance provider silently records every jackrabbit start and hard stop he makes on the way to the store. He doesn’t know it, but the small discount the insurance company offers for using the app could result in higher rates if the app detects that Joe has a “lead foot.”

Once he’s inside the grocery store, the Kroger Plus loyalty program tracks his every purchase, making it easier for the big chain to know which coupons and discounts to offer him. They share the information about his buying patterns to their partners, which aids them in deciding which coupons to offer Joe on each visit. Joe knows Kroger is tracking his every purchase, but he doesn’t care. Kroger gives him 10 cents off a gallon of gas for every $100 he spends in the store.

These are just two examples of how big data tracks Joe Public’s every move. Companies, big and small use big data, to track your activities, both online and in the real world.

Online, ad companies use data to determine which ad to display next. Big data is behind Google’s uncanny ability to be able to predict what you’re going to type in the search box, and it’s used by your favorite music or video streaming service to suggest content you might enjoy.

However, big data isn’t beneficial only to corporations; it can also prove to be beneficial to the consumer. In addition to lower car insurance rates and low prices on your next fill up, big data also helps track the spread of disease to help stop it in its tracks. It can also suggest lifestyle changes to individuals looking to improve their health.

While in the past consumers didn’t seem to mind that their data was being used by companies, in recent years we’ve seen an increase in concerns about the access big data has to personal information. This has resulted in legislation and regulations tightening the restrictions on how a citizen’s personal information can be used, and on who gets access to it.

Consumers have also become increasingly concerned over the numerous data breaches that have taken place. Facebook and Yahoo users have been hit by data breaches in the past few years, as have Sears, Target, and Macy’s shoppers.

The Consumer Privacy Movement and Its Effect on Big Data

How does this increased focus on consumer privacy affect big data? How do new regulations such as the European Union’s General Data Protection Regulation (GDPR) affect how companies collect and store personal data?

The GDPR requires companies to get clear consent from consumers before they are allowed to collect their data. Consumers must also be informed as to how their data will be used. European Union consumers also now have the right to opt out of data collection entirely, and they can request that all of the personal information stored by a company be erased.

GDPR violations can result in a firm paying fines of up to 4% of their global revenue or 20 million euros, whichever is greater. That can be a bitter pill to swallow.

Big data analytics typically reuses personal data, which means companies that do business in the EU will need to get informed consent from each individual for any secondary use of their data. The possible lack of personal data reuse could result in big data analytics being based on inaccurate data, resulting in faulty analysis or discriminatory outcomes.

Not only companies that are based in the EU are required to comply with GDPR. U.S.-based companies that do business in the EU are also required to comply. Article 3 of the GDPR states that companies that collect personal data in an EU country are subject to the GDPR rules.

With the establishment of the new regulations in Europe, we can expect to see similar regulations in other parts of the world. (California passed a new digital privacy law in June 2018 that takes effect in 2020. And as California goes, so eventually goes the rest of the U.S.) Companies that aren’t ready for new rules and regulations will suffer in the eyes of consumers.

How Can Big Data Deal With the Increased Focus on Consumer Privacy?

When considering consumer privacy, big data analysts need to allay concerns about privacy and big data. Big data needs to be transparent about what types of data they collect, and how they use the collected data, and who they share it with.

Security is also highly important. Companies will need to improve their security, at all entry point into the data they have collected. It is tough for companies to live down the embarrassing headlines that are the result of a data breach.

Also, companies need to ensure their analysis algorithms don’t accidentally show discriminatory and illegal biases. They need to avoid inaccurate analysis caused by “fake news.”

Big data must be completely transparent with how they use customers’ data. Let them know what is being studied and how it’s being studied. Consumers will be more comfortable with big data’s information collection if they know exactly what is being done with the data.

Companies must make it possible for their customers to learn exactly what they know about them. It should be easy to obtain all of the data a company knows about a customer.

An excellent example of data collection transparency is Apple’s privacy website that allows their customers to download everything the Cupertino company has collected about their Apple ID activities. A user’s Apple ID is connected in some way to every Apple device purchase, app download, email, and more. This means the customer can learn everything Apple has collected about them.

In Closing

Data privacy will be an ever-increasing concern for any company that deals with big data. Consumers are afraid of the idea that companies know so much about their lives. Security, openness, and transparency are the most important things to keep in mind when dealing with customer data.

Bill here from Pixel Privacy. Whether it be one of our in-depth guides or our expertly crafted “how-to” articles, we’re here to show you how to stay safe online. We believe everyone has the power to keep their data secure, no matter what your level of tech expertise is and our site will show you how!