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Thursday, November 23, 2017

Columns

Data collected from consumers for money should be transparent


VIZIO recently agreed to pay $2.2 million in fines due to a ruling from a United States District Court. The ruling states the company participated in deceptive and unfair acts/practices in violation of Section 5 of the Federal Trade Commission (FTC) Act.

VIZIO installed automated content recognition devices in televisions without the consumer’s knowledge. VIZIO then sold collected information to third parties. The ruling also includes a number of additional compliance provisions.

But the provisions don’t address a matter that has become increasingly prevalent in our society: who owns digital footprints? Or, more importantly, if companies are allowed to collect information of digital traces, why don’t consumers get a cut of the profit?

Our digital footprints are an extension of ourselves in the Information Age. Companies and third parties are monetizing the digital paths left behind by debit/credit cards, web surfing and media selection habits. 

The data brokerage industry has been around for a while; since the days of searching public records and collecting sweepstakes data for direct mail marketing campaigns. The industry has garnered more attention in the digital age because data aggregation practices are exponentially larger and more nuanced.

Granted, there are companies like the Datacoup that aim to collect data from a conscientious and consenting consumer. These companies are fairly scarce, though. In fact, the trend has historically been opposite business models; subversive collection often comes at the consumer’s expense.

The Government Accountability Office published a report regarding the data brokerage industry in 2013. The report stated that there was, “no federal statutory right to know what information data brokers have compiled.” The lack of privacy laws surrounding information resale create a narrative that personal data is out there for the taking. As a result, the average consumer does not expect to capitalize off of their own digital footprints.

Thinking that data brokers should face increased regulation in the hopes of increasing the privacy rights of the average consumer is commendable. As of now, unless the data falls under the Fair Credit Reporting Act, it lacks the protection provided by transparency from the companies engaging in collection.

An increase in concern has led to numerous reports that expose an environment that operates behind-the-scenes of the average electronic user’s digital routine. While proper privacy protocols are being considered for implementation, the whole industry has been a one-way profiteering enterprise.

The consumer spends their hard-earned money to buy electronics. These electronics provide profitable insight for the same company that produces the electronics. It is reasonable to assume that if data mining from consumer products is necessary to enhance personalized features, it will continue to exist. That shouldn’t mean the consumer shouldn’t be able to recapture the profit gained from collection of their information.

With the advent of data collection in the digital age, the average consumer has become a producer. A report by the FTC entitled ‘Protecting Consumer Privacy in an Era of Rapid Change’ tentatively establishes a privacy framework that would require fairly strict transparency requirements.

While transparency is great, data ownership is the real issue. Data ownership can be monetized, and any issue involving money can only stay in the shadows for so long. If commercial entities are going to collect data on its’ consumers, a financial compensation infrastructure should be raised to allow consumers to recapture the profit they generate.

Opinion columnist Nicholas Bell is an MBA graduate student and can be reached [email protected]

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