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Changing The Subject On Big Data

blue lock image on a coding console
photo by Yuri Samoilov

Businesses and the government both want to know all they can about us, but they want to know for different reasons.

Generally, businesses just want to sell us stuff. The playing field is reasonably level, because we have control of our wallets. Even with the best marketing, businesses can only succeed in selling us their products or services with our consent. Privacy advocates complain that businesses know too much about our habits and preferences, but most of us just don’t care. The ease with which we click through each new website or app’s terms of service proves it. In the end, our dealings with private businesses are based on mutual benefit.

Our relationship with the government is fundamentally different. The government provides us with essential security and services, but it also establishes rules that it imposes on us under the threat of civil, or occasionally criminal, punishment if we fail to comply. Our countervailing influence is only indirect, through our elected officials. That influence is only as useful as the officials’ ability and willingness to control the way the government uses the information that it gathers about us.

The big scandal about big data in the Obama era is not about how companies like Google or Facebook target the ads their users see. It’s about how the government has used its access to data, often without citizens’ knowledge, for such activities as identifying journalists’ sources and mapping webs of our personal relationships to identify who knows whom for whatever purposes the government deems appropriate.

Obama has been slow, indecisive and feeble in confronting the way his government has amassed and used data about us. So his administration seeks to change the subject.

Last week, the White House issued a report in response to the president’s order for study in the aftermath of the National Security Agency scandal and several news-making consumer privacy breaches. The report nominally covers security concerns in both the public and private sectors. Unsurprisingly, though, the administration prefers to tilt its focus toward businesses more heavily.

Presidential counsel John Podesta, who along with other senior officials led the final review that produced the report, made recommendations for legislative and executive action. One of the major targets was so-called “data brokers” - companies that collect and sell data. The report renews also calls for baseline consumer privacy legislation, a project that has long made industries that rely on consumer information wary.

This is not to say there is no legitimate need for adjustments to privacy laws that apply in both realms. Allowing consumers to see and correct dossiers complied about them would be a reasonable extension of existing anti-defamation laws, for example. And a lingering provision that distinguishes between read and unread email messages has become nonsensical in an age where almost everyone’s email client is Internet-based and many users have notices of new messages pushed automatically to their mobile devices. Updating the law, for both private and public information gathering, makes basic sense in these sorts of cases.

Yet Obama hints that he would rather go further, using the law to push the “disparate impact” theory to create new avenues for discrimination claims. For example, if a business only wants to lend money to people likely to repay the loan, and a certain demographic is statistically less likely to be a good credit risk, then the very act of identifying an individual who is a bad risk and also happens to be a member of that group could be interpreted as a discriminatory act.

“…Just as neighborhoods can serve as a proxy for racial or ethnic identity, there are new worries that big data technologies could be used to ‘digitally redefine’ unwanted groups, either as customers, employees, tenants or recipients of credit,” the report states. Basically, the argument runs, if companies turn down a customer and they potentially could have known that the individual was part of a disadvantaged group, companies open themselves to legal claims that the decision was discriminatory.

If allowed to stand, this idea would turn civil rights law on its head. Rather than forbidding a stereotype from being applied to individuals it does not fit, it would prohibit an application of facts specific to an individual by treating that application as an act of discrimination against the group as a whole.

Arguing about this proposition, though, is a neat distraction from concerns about how the government could use data irresponsibly or dangerously, without effective oversight, for any reason it terms to be worthwhile. In her visit to Washington last week, German Chancellor Angela Merkel made clear that she is still unhappy that U.S. intelligence agencies saw fit to eavesdrop on her cellphone. It is a topic about which the report has very little to say (although it ingratiatingly concedes that foreigners are entitled to privacy, too). This lack of emphasis is undoubtedly by design.

The White House report, in the end, was written to serve two not-so-hidden agendas. It panders to the administration’s proclivity to play identity politics and it seeks to divert attention from the misuse not only of information, but of power, by people who exercise it by coercion rather than persuasion.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us,” and Chapter 4, “The Family Business.” Larry was also among the authors of the firm’s book The High Achiever’s Guide To Wealth.

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