It’s Not How Much Data You Have, But How You Use It

On Thursday, December 6, 2012, the FTC is hosting a panel to “explore the practices and privacy implications of comprehensive collection of data about consumers’ online activities.” Initially envisioned to grapple with the question of ISPs using data about consumers for advertising, the topic for discussion has since broadened to include a range of business models that “have the capability to collect data about computer users across the Internet, beyond direct interactions between consumers and these entities.”

To help inform the discussion, FPF has released a white paper entitled “It’s Not How Much data You Have, But How You Use It: Assessing Privacy in the Context of Consumer Data Integration.” The paper seeks to explain the market factors driving companies to provide an increasingly wide range of integrated services to consumers. We point to consumer demand for interoperability; the need for companies to maintain their channel to the consumer across multiple platforms and devices; the need for access to social content and signals; and innovative data uses that benefit consumers.

Expansions in data collection and new integrated uses have repeatedly been the cause of privacy concerns. But rather than impose new obligations on companies solely because of factors such as comprehensiveness of data, we propose a logical extension of the concept of context, which was introduced by the White House and FTC reports earlier this year. When data is used in new contexts, corporate practices should be judged by the nature of such new contexts and the communication needed to engage consumers without creating a “privacy lurch.” Important factors to consider include the nature of the new context; the value of the new data use; and the expectations a consumer may have developed with respect to a given “brand.” An evaluation based on this “enhanced context” model may warrant a decision to rely solely on good communication without providing consumers with additional choice. Alternatively, it may call for consumer opt-out rights or even express consent, if the nature of the shift in context and supporting factors so warrant.

Attached to the white paper are two annexes prepared by the FPF staff to describe the range of devices and services offered by leading companies and selected examples of integration of data across services and choices provided.