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Trust a must as consumers more wary of big data usage and privacy

Big data was (unsurprisingly) in the spotlight in recent headlines, with a particular focus on consumer data privacy.

‘Privacy paradox,’ compliance costs challenge data-driven companies

The proliferation of smartphones and the convenience of such Internet services as online marketplaces have both consumers and data-driven businesses elated — but only to a point, says New York Times Bits blogger Steve Lohr, drawing from a recent study on global privacy survey. As consumers clamor for even more easy-to-use online services, 87% of respondents “strongly agree” that the government should step in and prohibit businesses from brokering data without their opt-in consent, according to the EMC-sponsored study. Additionally, 51% of this global pool of 15,000 consumers pointed to “businesses using, trading or selling my personal data for financial gain without my knowledge or benefit” as the leading threat to their online privacy (above “lone/crazy hackers” and “my government spying on me”).

This “privacy paradox” doesn’t bode too well for businesses that already struggle to allocate huge amounts of resources to ensure compliance with privacy regulations, perhaps at the expense of R&D. A recent report by the Competitive Enterprise Institute found that compliance with federal regulations cost businesses $1.86 trillion in 2013 — more than the GDP of Canada and Mexico. But while most companies oppose regulations that restrict data collection and usage, they must self-regulate data practices to cultivate the trust their customers prize.

Email privacy reform gains steam

Last week, the Email Privacy Act garnered majority support when it received its 218th co-sponsor in the U.S. House of Representatives. The bill would prohibit law enforcement officials from accessing stored emails without a warrant. The development has spurred tech companies such as Google and advocacy groups including the American Civil Liberties Union and the Center for Democracy — both of which have long lobbied for Electronics Communications Privacy Act (ECPA) reform — to push for Congress to pass the bill, The Hill reports.

Google’s Senior Privacy Counsel David Lieber wrote in a blog post that passing this legislation would “send a clear message about the limits of government surveillance by enacting legislation that would create a bright-line, warrant-for-content standard.” Other pro-ECPA-reform groups are also hailing the bill as a milestone in protecting electronic communications from government intrusion. As the 1986 law now stands, law enforcement is allowed to obtain emails that have been stored for more than 180 days without a warrant.

Federal Trade Commission calls for data broker transparency

As part of its efforts to educate the public on privacy among data brokers, the Federal Trade Commission issued a report last month calling for federal legislation that would increase transparency across the industry and make it easier for consumers to access information. The report, titled “Data Brokers: A Call for Transparency and Accountability,” recognizes data brokering’s value to companies and consumers while cautioning against consumer harm due to information misuse. To prevent the latter, the report provides legislative recommendations and industry best practices such as creating a centralized online portal to identify which data brokers maintain information on certain customers. Other recommendations include providing customers with “opt-out” tools, narrowing data brokers’ collection efforts and implementing data disposal guidelines.

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