White House Report Sees Potential, Pitfalls Of Big Data

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A new report released by the White House today outlines the potential and pitfalls of big data in our lives. While there is tremendous economic and social promise from big data, there is also equal prospect for abuse, especially when it comes to privacy and personal data protection.

President Obama plans to file several pieces of legislation in the coming months around consumer privacy and protection, data breach reporting and protection of school children’s data.

Last January, the president asked John Podesta, counselor to the president, to lead a working group to look into the implications of Big Data. At the same time, the President’s Committee of Advisors on Science and Technology was also looking into the matter on a more technical level. Both teams have filed initial reports, Podesta explained at a White House briefing this morning.

“Both of those reports concluded that we live in a world of near ubiquitous data collection, where data is being crunched at speeds increasingly approaching real time,” Podesta said.

Big data as a technology represented a tremendous opportunity to transform healthcare, boost economic productivity, empower consumers and make government work better, saving taxpayer dollars in the process, he added.

“But at the same time. those same technologies raise concerns about how to protect personal privacy and other important values. As more data is collected, analyzed and stored on both public and private systems, we need to be vigilant to ensure the balance of power is retained between government and citizens and between businesses and consumers,” he said.

In a case of apt timing, just this morning, Anthem, the nation’s second largest insurer reported a major security breach. One of the recommendations in today’s report is legislation around how companies should report breaches of this very type.

But of course, these breaches aren’t new. Whether it’s Sony, Home Depot, JP Morgan or Target to name a few of the higher profile cases, these breaches have been happening with startling regularity.

Responding to a question about the Anthem breach, Podesta said that it sounded like the company was responding in a timely manner and was “operating in a realm in what we view as best practice.”

But the purpose of legislation would be to create a consistent set of responses. “We want to see consistent application and high set of standards for consumers and then redress of consumers,” Podesta explained.

It’s important to remember that in any type of legislative proposal, even one involving cybersecurity or big data, politics is going to play a role with any plan originating from the White House. One area that could find broader bipartisan support is legislation protecting information collected about school children, especially while they are at school.

The president has proposed legislation around school data privacy and has found a sponsor from both sides of the aisle to advance it. Information mined from students while interacting with technology at school “shouldn’t be mined for marketing or commercial activities,” Podesta said. He believes that’s something both Republicans and Democrats can get behind.

It might be more difficult to find common ground around consumer protection legislation as it related to big data privacy, Podesta admitted, but he expressed hope that they could find bipartisan sponsors. He added, they had not completely drafted the language of that bill and it was still in progress.

Another problem that needed scrutiny was around big data and the ability to apply discriminatory pricing on the fly using data businesses glean about individual buyers, Jason Furman, who is Chairman of the Council of Economic Advisors, explained at the briefing.

Differential pricing, much like big data, can be positive or negative depending on how its applied. Furman used the example of offering children and seniors cheaper movie tickets. In this case, he says, the theater is offering a better price to groups who have less economic clout to draw them into the theater.

On the flip side, an airline might charge a higher price to a business person looking for a flight at the last minute because this consumer probably has the money and is willing to pay it.

They aren’t concerned with areas where businesses use pricing in this manner, and he was careful to point out that big data has the potential to empower consumers, and ideally offer them ways to protect information they didn’t want to share.

But it can get tricky, especially in higher stakes transactions such as employment, insurance and credit, where he said there was substantial concern regarding privacy, data quality and fairness.

“In these settings, big data can facilitate problematic practices, many of which are covered and would run afoul of existing laws like the Fair Credit Reporting Act and The Civil Rights Act,” Furman explained.

He pointed out that big data works both ways in this instance because it’s also a tool that can be used by regulators to weed out questionable or illegal practices.

The report and today’s briefing showed that big data, as any technology, can be used for good or harm, depending on how it’s applied.

The president clearly recognizes these conflicting applications and he is trying to tamp down on the negative aspects while encouraging the positive. From here, it becomes part of the political theater in Washington, but it’s worth noting that these are all valid concerns about a developing technology like big data.

The full report is below:

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