5/4/2019 What Big Data Needs: A Code of Ethical Practices - MIT Technology Review

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Business Report

What Big Data Needs: A Code of Ethical Practices

Four key principles that companies should follow if they hope to analyze
customers’ data without alienating them.

by Jeffrey F. Rayport May 26, 2011

     

n this era of Big Data, there is little that cannot be tracked in our
I
online lives—or even in our o ine lives. Consider one new Silicon
Valley venture, called Color: it aims to make use of GPS devices in mobile
phones, combined with built-in gyroscopes and accelerometers, to parse
streams of photos that users take and thus pinpoint their locations. By
watching as these users share photos and analyzing aspects of the pictures,
as well as ambient sounds picked up by the microphone in each handset,
Color aims to show not only where they are, but also whom they are with.
While this kind of service might prove attractive to customers interested in
tapping into mobile social networks, it also could creep out even ardent
technophiles.

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Color illustrates a stark reality: companies are steadily gaining new ways to
capture information about us. They now have the technology to make sense
of massive amounts of unstructured data, using natural language
processing, machine learning, and software architectures such as Hadoop,
which handles high volumes of simultaneous search queries. Messy data of
this kind, long relegated to data warehouses, is now the target of data
mining. So is the information generated by social networks—user profiles
and posts. Its quantity is staggering: a recent report from the market
intelligence firm IDC estimates that in 2009 stored information totaled 0.8
zetabytes, the equivalent of 800 billion gigabytes. IDC predicts that by
2020, 35 zetabytes of information will be stored globally. Much of that will
be customer information As the store of data grows the analytics available
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5/4/2019 What Big Data Needs: A Code of Ethical Practices - MIT Technology Review
be customer information. As the store of data grows, the analytics available
to draw inferences from it will only become more sophisticated.

It’s no wonder that there are calls for corporations to create positions such
as chief privacy o cer, chief safety o cer, and chief data o cer, or that
American and European legislators have been considering several kinds of
privacy measures. In one bipartisan e ort, Senators John McCain and John
Kerry have proposed the Consumer Privacy Bill of Rights Act of 2011, which
aims, in part, to restrict what online companies can do with customer data.
Senator Jay Rockefeller has proposed his own piece of legislation, the Do-
Not-Track Online Act of 2011. The European Union’s Article 29 Working
Group is addressing similar concerns.

In the private sector, the Digital Advertising Alliance has sought to get
ahead of such rule-making by introducing its own privacy framework to
assure the security and safety of customer information. Its Self-Regulatory
Program for Online Behavior Advertising comes on the heels of several
incidents: Epsilon’s admission that hackers gained access to customer
information from clients such as CitiGroup, Target, and Walgreen’s; Sony’s
revelation that its PlayStation platform failed to safeguard the account
information of up to 100 million customers; and Apple’s confirmation that
it uses an unencrypted file stored in iTunes accounts to track movements of
individual iPhone users in the physical world.

For all the privacy concerns, the online economy creates enormous value by
using customer information. In 2009, according an ad industry study cited
by the Wall Street Journal, the average price of an untargeted ad online was
$1.98 per thousand views. The average price of a targeted ad was $4.12 per
thousand. We used to measure the success of websites as if they were portals
—by how much tra c they could muster. Now we measure them as social
networks—by how much they know about their users. This is why Wal-Mart
recently acquired Kosmix, a Silicon Valley startup that filters and finds
meaning in vast streams of Twitter messages. Other retailers, along with
digital players such as Facebook and Yahoo, are using the technology of
another startup, Cloudera, to sort through enormous quantities of
behavioral information compiled over years (sometimes decades) in search
of insights based on patterns that only machines can fathom. Intelligence
generated in these ways can lead to better games from companies like Zynga
and better advertising from your favorite brands. David Moore, the CEO of
24/7 Real Media, argues that when an ad is targeted properly, “it ceases to
be an ad; it becomes important information.”

The opportunity for profit helps explain the rise of dozens of data exchanges,
data marts, predictive analytic engines, and other intermediaries. It’s also
why players such as Google, Facebook, and Zynga, among many others, are
finding ways to aggregate ever more information about users. Facebook
provides but one example of how extensive this kind of tracking can be. Its
seemingly innocuous “Like” button has become ubiquitous online. Click on
one of these buttons, and you can instantly share something that pleases you
with your friends. But simply visit a page with a “Like” button on it while
you’re logged in to Facebook, and Facebook can track what you do there.
The first aspect sounds great for consenting adults; the latter is more than a
little unsettling. Facebook is hardly alone. A company called Lotame helps
target online advertising by placing tags (sometimes known as beacons) on
browsers to monitor what users are typing on any Web page they might
view
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view.

The potential dark side of Big Data suggests the need for a code of ethical
principles. Here are some proposals for how to structure them.

Clarity on Practices: When data is being collected, let users know about it—
in real time. Such disclosure would address the issue of hidden files and
unauthorized tracking. Giving users access to what a company knows about
them could go a long way toward building trust. Google has done this
already. If you want to know what Google knows about you, go to
www.google.com/ads/preferences, and you can see both the data it has
collected and the inferences it, and third parties, have drawn from what
you’ve done.

Simplicity of Settings: One way to avoid an Orwellian nightmare is to give

users a chance to figure out for themselves what level of privacy they really
want. In theory, Facebook does this. In practice, as Nick Bilton reported
recently in the New York Times, Facebook’s privacy policy has more words
(5,830) than the United States Constitution (4,543, not counting the
amendments). But that’s just the tip of the iceberg. Try changing your
privacy settings, and you will encounter over 50 privacy toggles giving rise to
over 170 privacy options.

Privacy by Design: Some argue that neither clarity nor simplicity is

su cient. Ann Cavoukian, privacy commissioner for the province of
Ontario, coined the phrase “privacy by design” to propose that organizations
incorporate privacy protections into everything they do. This does not mean
Web and mobile businesses collect no customer information. It simply
means they make customer privacy a guiding principle, right from the start.
Microsoft, which in 2006 issued a report called “Privacy Guidelines for
Developing Software Products and Services,” has embraced this principle,
using a renewed emphasis on privacy as a way to di erentiate itself; the
latest version of Internet Explorer, IE9, lets users activate features that can
block third-party ads and content.

Exchange of Value: Walk into a local Starbucks, and you’re likely to feel
flattered if a barista remembers your name and favorite beverage.
Something similar applies on the Web: the more a service provider knows
about you, the greater the chance that you’ll like the service. Radical
transparency could make it easier for digital businesses to show customers
what they will get in exchange for sharing their personal information. That’s
what Netflix did in running a public competition o ering third-party
developers a $1 million award for creating the most e ective movie
recommendation engine. It was an open acknowledgement that Netflix was
using users’ movie-viewing histories to provide increasingly targeted, and
thus more useful, recommendations.

These principles are by no means exhaustive, but they begin to outline how
companies might realize the value of Big Data and mitigate its risks.
Adopting such principles would also get ahead of policymakers’ well-
intentioned but often misguided e orts to rule the digital economy. That
said, perhaps the most important rule is one that goes without saying,
something akin to the Golden Rule: “Do unto the data of others as you
would have them do unto yours.” That kind of thinking might go a long way
toward creating the kind of digital world we want-and deserve.
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5/4/2019 What Big Data Needs: A Code of Ethical Practices - MIT Technology Review

Je rey F. Rayport specializes in analyzing the strategic implications of

digital technologies for business and organizational design. He is a
managing partner of MarketspaceNext, a strategic advisory firm; an
operating partner at Castanea Partners; and a former faculty member at
Harvard Business School. Carine Carmy contributed research to this article.

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5/4/2019 What Big Data Needs: A Code of Ethical Practices - MIT Technology Review

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