In 2017 The Economist released an article titled, “The world’s most valuable resource is no longer oil, but data.” In 2019, Forbes released an article titled, “Data Is The New Oil — and it's a good thing,” which focuses on the good aspects of having access to large amounts of data. One abundantly clear idea expressed in both articles is that there are few players in this game and they control most of the data currency, if you will. While data can be great to build specialized markets and tap into consumers' wants, data’s utility is only maximized if one has access to vast amounts of data. This could potentially make data, what Harvard Business Review calls, “barrier-to-entry.”
“Barrier-to-entry” means those who do not have access to vast amounts of data will be stifled when it comes to their ability to keep up with competitors. This among many other reasons is why in this competitive data world there is a need for an understanding of data ethics. In this article, I hope to further the understanding of the need for data ethics.
In this current age of technology and data, we are now able to communicate across seas, watch the same sporting event in different time zones, and get to any destination with only a few clicks or taps. For every instance where one or more events are taking place, the person that is participating will leave a trail of data that can and often is collected and used. But, when the data is sensitive and personal, its use can lead down a path of serious unethical actions as well as unintended uses. This abuse of power can be attributed to several factors; the governing rules on who can and can not use data, and in which manner it is used are not clear in many countries. Or, if there are even elementary sanctions, the company and/or entity may not enforce said sanctions.
Although many of the newer companies are often criticized for unethical data practices, there have been instances of unethical data practices dating back to the end of the 20th century. For instance, according to computer engineer Dr. McFarland, a congressional survey in 1978 found that 20 percent of criminal history records given out by the states went to private corporations and government agencies not involved in criminal justice. Also, if employers are willing to pay for investigatory services that operate outside the law, employers can obtain credit records, insurance, medical records, and a history of worker’s compensation claims. They can also acquire bank records, credit card charges, and IRS tax records, among many others. While there is a definite reason for an employer to have some of the information, they don’t need to have all of this information because a lot of the information may not pertain to the job at hand.
While the aforementioned case is one real-world instance of questionable data ethics, there are many others. One of the industries that is constantly being questioned is marketing. Marketers have an enormous need for personal information. They use lots of data with sophisticated statistical analysis techniques along with predictive psychological models. This is used to try and predict peoples’ purchasing preferences, behaviors, and patterns. Also to identify those factors that most strongly influence consumer loyalty, choice, and churn. Once this happens they then concatenate this new intelligence with in-depth information on specific individuals and subgroups of consumers. The primary goal for marketers and is to try and engage consumers and influence their purchasing decisions and habits.
There are lots of “data vendors” that agencies can acquire data from such as credit agencies, motor vehicle departments, and even the post office. Not only do these agencies have and sell contact information, such as names, addresses phone numbers, email address, and net IDs, but also more personal information. Shopping habits, automobile model infomation, consumer banking info, family demographics, age, gender and sexual preference, amongst other private information, is utilized to sway consumer behavior, preferences and habits. While the purchasing of such data seems harmless, these entities very rarely get clearance from the consmers, and if they do, then the economic value, nor the intended use, has been clearly explained.
Entities can also generate data internally. Stores such as supermarkets like Walmart and Target, department stores, and other retailers can now keep a record of every transaction and item bought by each customer, in-store as well as online. Also if the customer uses a credit card, bank card, or store identification they can then be linked with their name, address, age, gender, and the other characteristics that were discussed above. This is often not known nor consented to by the consumer.
I think people overlook or lack knowledge of is the economic value of social media data. Social media companies collect their own data and also have the ability to make and sell their own ads. With this large amount of power, our tech powerhouses are paid very well for their services. Targeted advertising is by far their largest bringer of revenue, but it is possible because their platforms are all free to the user. The companies trade this free platform for the user’s personal information and data. This is a great arrangement as long as the user is fully aware and has given consent to have their data collected and used and possibly sold. In many cases, it is not clear whether those ethical conditions are being met. Oftentimes, users do not understand the extent of what is happening with their data. One could argue that they do give consent when agreeing to the privacy policy agreement, but most times the agreements are much more complex than the user has been led to believe. So when using these platforms, users are advised to make sure they understand exactly what they are signing up for and who can potentially have access to their data and its intended use.
I hope you found this informative and helpful to protect your right to privacy.
