A General Counsel’s Guide to the Legal Consequences of Big Data

Most attorneys have heard the phrase “Big Data” by now, but they may not know what it means or how it will affect their clients.

To comprehend the legal consequences of Big Data, it is necessary to first define the phrase. Big Data refers to data sets that are so massive and complicated that they are impossible to handle using ordinary database management tools or traditional processing software. It refers to vast amounts of complex and changeable data that need the use of modern procedures and technologies to gather, store, disseminate, manage, and analyse the data.

The following are some interesting facts on Big Data from Wikibon:

Every hour, Walmart processes over one million consumer transactions, which are then loaded into databases that hold more than 2.5 petabytes of data. (Source)

94 percent of Hadoop users can now run analytics on vast amounts of data that were previously impossible; 88 percent can now analyse data in more detail; and 82 percent can now keep more of their data. (Source)

Facebook collects, saves, and analyses more than 30 Petabytes of user-generated data. (Source)

Big data is a significant corporate goal that offers huge opportunities for company growth. According to Wikibon, big data will be a $50 billion enterprise by 2017. (Source)

Poor data quality or bad data costs US firms $600 billion every year. (Source)

The potential applications and advantages of Big Data are limitless, but it also presents certain concerns to organisations that wish to exploit it and to people whose information is now constantly being gathered, combined, sorted, mined, analysed, and acted upon by enterprises. This essay delves into the legal ramifications of Big Data and what it implies for general counsel.

Big Data, as the Holy Grail of Marketing, poses Privacy Issues.

Big Data is regarded as the holy grail of consumer marketing potential, enabling marketers to target particular consumers with accuracy and efficiency, as well as providing advertising, services, and goods especially customised to a person depending on his or her preferences. Big data paired with the usage of mobile devices may result in highly relevant offers being provided to particular persons at the right time and in the right location.

The privacy implications of all of this data and its usage have yet to be resolved. One of the most major legal concerns related with Big Data is expected to be privacy.

It is not clear who is collecting data.

Another privacy issue raised by Big Data is the idea of access/participation. The Fair Credit Reporting Act (FCRA) mandates credit reporting organisations to provide customers access to their credit reports so that errors may be corrected. The idea of deals with the individual’s capacity to access his or her data to determine if it is correct or not in the context of Big Data. The general public is presently unaware of which companies gather information about them or who creates profiles. When it comes to data brokers, who do not have a direct contact with individual customers, the picture becomes much murkier.

The Federal Trade Commission (FTC) has signalled a willingness to examine further examination of data brokers due to concerns about access and transparency. In December 2012, the FTC initiated an inquiry into the data broker sector and how it collects and uses consumer information. Overall, this is an area that is ripe for further oversight and maybe law.

Consumers are Ineligible to Provide Meaningful Consent

The ideas of notice/awareness and choice/consent give some protection for the individual consumer under the Fair Information Practice Principles in the United States. They must, in particular, be made aware of the purposes for which their personal information will be used and to whom such information will be revealed.

However, in a Big Data era, some argue that the aim of notice/consent may be avoided simply due to the inherent complexity of the bid data ecosystem and practical limits. The problem is twofold: first, the consumer may not understand where their information will end up (perhaps with a data broker), and second, the consumer may not understand the inferences drawn from their combined data as a result of Big Data techniques and analysis, making meaningful consent impossible.

The challenges raised here are just the tip of the iceberg when it comes to the Big Data implications for businesses and their general counsel. While the Big Data age has arrived, and organisations will progressively gather and analyse enormous data sets to serve their economic interests, there are numerous possible legal concerns relating to the collection, analysis, use, and dissemination of Big Data that have yet to be addressed. Before rushing your customers into the Big Data sector, consider the possible privacy concerns to avoid being the poster child for a Big Data privacy litigation.