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FTC Report Highlights Hazards of Big Data Usage

The Federal Trade Commission, or FTC, is an independent agency that is aimed at consumer protection as well as the removal or outright prevention of anti-competitive practices in businesses today. As an entity that knows a thing or two about consumer privacy, it was only a matter of time before they spoke up about the current state of big data.

While the FTC has actually been monitoring the big data trend for quite some time, and even went so far as to hold a specialized workshop in 2014 that was meant to disseminate the effects of big data on the American consumer, their most recent report takes their studies into big data even further.

Entitled "Big Data: A Tool for Inclusion or Exclusion? Understanding the Issues," the FTC's latest report, which was released in January 2016, highlights a number of very specific and very real hazards associated with the growing collection, processing, sharing and usage of consumer-specific information. The report continues on to provide tips that companies can use in order to minimize some of the potential risks involved.

According to the report, top risks associated with big data in the 21st century include individuals who are mistakenly being denied opportunities based on their demographic information, advertisement practices that expose the sensitive information of consumers, vulnerable consumers who are being targeted for fraud, organizations that are excluding specific demographics from certain opportunities and businesses that are providing higher-priced goods or services within low-income communities.

Furthermore, the FTC's latest report details some federal laws and acts that might be relevant to certain big data applications. The Fair Credit Reporting Act, or FCRA, the FTC Act and various equal opportunity laws were all cited in the report.

The Positive Side of Big Data

Although the FTC's latest report highlighted some of the cons associated with big data creation, collection and usage, the report wasn't entirely negative. In fact, many benefits and advantages of big data were used as counterpoints to the negative aspects.

For instance, one portion of the report reads: "Big data analytics can provide numerous opportunities for improvements in society. In addition to more effectively matching products and services to consumers, big data can create opportunities for low-income and underserved communities. For example, workshop participants and others have noted that big data is helping target educational, credit, healthcare, and employment opportunities to low-income and underserved populations."

Moreover, the FTC went out of their way to provide a comprehensive checklist within the report itself, which companies can use in order to "maximize the benefits and limit the harms of big data." Among other tips, the report urges companies to ensure the accuracy of collected demographic information, to account for any potential biases in data collection and to assess their overall reliance on big data. When followed closely, this checklist can go a long way in ensuring the validity, legitimacy and security of big data for years to come.

To find out more information about the FTC, or to access any of their latest reports, please visit their official website at


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