Big data is a big deal these days, but data collection and analysis has been a focus of direct response marketers from the start. What began as an effort to harness information about customers’ viewing and buying habits—small data, if you will—has expanded to revolutionize business. The role of the Federal Trade Commission (FTC) is to ensure that consumers are protected as commerce enters this brave new world. Here’s a snapshot of the FTC’s approach to big data, focusing on developments in four key areas.
Data security. Unauthorized charges, loss of employment, and denied health care are a few of the real-world consequences of identity theft. Given the risk in sharing personal information, the FTC has been at the forefront in encouraging companies to implement common-sense data security practices. To date, the agency has settled 53 law enforcement actions against companies charged with failing to maintain reasonable security of sensitive consumer information.
There is no one-size-fits-all approach, of course. What’s reasonable depends on the nature of your business and the kind of data in your possession. But certain practical principles apply across the board. For more information about protecting sensitive data, read Start with Security: A Guide for Business, a new FTC brochure that distills recent law enforcement actions into 10 lessons applicable to companies of any size and in any sector.
Consumer privacy. Are you keeping the privacy promises you’ve made to customers? Are you unsure of what those promises might be? Re-read your privacy policy. The FTC has brought dozens of cases alleging that certain companies—including some of the biggest names in social media—made unauthorized use of the sensitive information customers entrusted to them. The easiest way to avoid a privacy problem is to be transparent with consumers about how their information will be used, and live up to those promises.
The easiest way to avoid a privacy problem is to be transparent with consumers about how their information will be used.
The Internet of Things. Data collection isn’t limited to computers and smartphones. Whether it’s an app that flips your lights on when you turn into the driveway or a wristband that monitors how much you exercise, connected devices are popping up everywhere. This marketplace development poses an obvious question: What will happen with all of that data?
The FTC explored the issue at a national conference and followed up with a report, The Internet of Things: Privacy and Security in a Connected World. The challenge ahead is to encourage innovation while ensuring that established consumer protection principles apply. Entrepreneurs and developers can learn more from the FTC’s Careful Connections: Building Security in the Internet of Things.
Big data. Type “big data” into a search engine and you’ll get more than 300 million results, and the amount of personal information in the hands of data brokers adds another string of zeroes. There are lots of valid purposes for that information, but one FTC concern is that much of what happens to data occurs behind closed doors. To shed light on what’s going on, the FTC conducted an in-depth study and published its findings in a 2014 report, Data Brokers: A Call for Transparency and Accountability. The report weighs the benefits and risks of data collection, suggests best practices for the industry, and discusses legislative recommendations—all developments that could have a substantial impact on electronic retailers.
As the national debate over data continues, the FTC welcomes perspectives from consumer groups, privacy advocates, and businesses—including members of the direct response industry.