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The United States Federal Trade Commission (FTC) has issued a new Report on Big Data, entitled “Big Data:  A Tool for Inclusion or Exclusion? Understanding the Issues,” to provide guidance to companies about their Big Data practices. While acknowledging the numerous issues associated with the use of Big Data, the FTC explicitly limited its focus to the commercial use of Big Data consisting of consumer information, and its impact on low-income and underserved populations.

The Commission explained:
[This Report] discusses the benefits and risks created by the use of big data analytics; the consumer protection and equal opportunity laws that currently apply to big data; research in the field of big data; and lessons that companies should take from the research. Ultimately, this report is intended to educate businesses on important laws and research that are relevant to big data analysis and provide suggestions aimed at maximizing the benefits and minimizing its risks. 
The Benefits and Risks of Big Data

The FTC noted that Big Data analytics can benefit low-income and underserved populations by helping to target educational, credit, healthcare, and employment opportunities. Potential inaccuracies and biases, however, might lead to detrimental effects for those same people. Specifically, companies could use Big Data to exclude low-income and underserved communities from credit and employment opportunities.

Applicable Laws

The FTC urged companies to ensure that they have an understanding of consumer protection laws that might apply to their Big Data practices. The following laws were specifically highlighted and addressed in the Report:

- The Fair Credit Reporting Act (FRCA);

- Equal opportunity laws such as the Equal Credit Opportunity Action (ECOA), Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Fair Housing Act, and the Genetic Information Nondiscrimination Act; and

- The Federal Trade Commission Act.

Big Data Research

The commission noted research demonstrating the potential for “incorporating errors and biases at every stage -- from choosing the data set used to make predictions, to defining the problem to be addressed through big data, to making decisions based on the results of big data analysis -- which could lead to discriminatory harms.” In order to minimize the risk of harm and maximize the value of Big Data, the FTC encouraged companies to consider the following questions in connection with their use of Big Data:

- How representative was your data set?

- Does your data model account for biases?

- How accurate are your predictions based on Big Data?

- Does your reliance on big data raise ethical or fairness concerns.

Final Thoughts

The FTC urged companies to apply Big Data analytics in ways to provide benefits and opportunities to consumers, while “avoiding pitfalls that may violate consumer protection or equal opportunity laws, or detract from core values of inclusion and fairness.” The commission vowed to monitor for violations of law and to bring enforcement actions “where appropriate.”

The full FTC Report can be found <a href="https://www.ftc.gov/reports/big-data-tool-inclusion-or-exclusion-understanding-issues-ftc-report">here</a>.

The FTC Weighs In on Big Data