Avoid Stifling “Big Data” Innovation

Avoid Stifling “Big Data” Innovation

Lenard Files Comments with OSTP on Big Data Policy Implications

Contact: Amy Smorodin
(202) 828-4405

March 31, 2014 – The familiar remedies often suggested to address perceived privacy issues are ill-suited to the world of big data and are potentially a serious barrier to much of the innovation we hope to see from the big data revolution, states Technology Policy Institute President Thomas Lenard in comments filed today with the Office of Science and Technology Policy.

In his comments, Lenard suggests that when approaching privacy policy issues, “®he threshold question is whether there are harms that can be reduced by the adoption of privacy policies. Otherwise, there are no benefits to privacy regulation.” Lenard finds that, because the harms many posit are largely hypothetical, so are the purported benefits of proposed remedies.

Privacy remedies typically discussed are, however, likely to impose costs. For example, Lenard warns against limiting the re-use and sharing of data, explaining that “[b]ecause big data analysis involves finding correlations and patterns that might otherwise not be observable, it almost necessarily involves uses of data that were not anticipated at the time the data were collected.” In addition, many of the innovations often cited by policymakers use multiple sources of data, which involves transferring data to third parties.

Recommendations for greater transparency for consumers regarding data collection and use are “largely meaningless” in the era of big data because many scores and algorithms are based on hundreds of data points and very complex calculations, Lenard explains. Therefore, revealing how the data are used would result in minimal benefits to the consumer. In addition, making it easier for consumers to correct information would also make it easier for them to change a valid data point that may adversely affect a score or decision, or to add incorrect information to have a positive effect. Moreover, if we make it easier for individuals to access their data, then we also make it easier for those bent on fraud to access the same data.

The comments are available on the TPI website. The related paper, “The Big Data Revolution: Privacy Considerations,” authored by Lenard and TPI Senior Fellow Paul Rubin, is also available.

The Technology Policy Institute

The Technology Policy Institute is a non-profit research and educational organization that focuses on the economics of innovation, technological change, and related regulation in the United States and around the world. More information is available at https://techpolicyinstitute.org/.

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