On April 25, 2023, four federal agencies — the Department of Justice (“DOJ”), Federal Trade Commission (“FTC”), Consumer Financial Protection Bureau (“CFPB”), and Equal Employment Opportunity Commission (“EEOC”) — released a joint statement on the agencies’ efforts to address discrimination and bias in automated systems.
On June 25, 2019, as part of their continuing work on the AI Auditing Framework, the UK Information Commissioner’s Office (ICO) published a blog setting out their views on human bias and discrimination in AI systems. The ICO has also called for input on specific questions relating to human bias and discrimination, set out…
Yesterday the White House released a report discussing how companies are using big data to charge different prices to different customers, a practice known as price discrimination or differential pricing. The report describes the benefits of big data for sellers and buyers alike, and concludes that many concerns raised by big data and differential pricing can be addressed by existing antidiscrimination and consumer protection laws.
Big Data and Personalized Pricing
“Big data” refers to the ability to gather large volumes of data, often from multiple sources, and use it to produce new kinds of observations, measurements, and predictions about individual consumers. Thus, big data has made it easier for sellers to target different populations with customized marketing and pricing plans.
The White House report identifies two trends driving the increased application of big data to marketing and consumer analytics. The first trend is the widespread adoption of new information technology platforms, most importantly the Internet and the smartphone. These platforms give businesses access to a wide variety of applications like search engines, maps, blogs, and music or video streaming services. In turn, these applications create new ways for businesses to interact with consumers, which produce new sources and types of data, including (1) a user’s location via mapping software; (2) their browser and search history; (3) the songs and videos they have streamed; (4) their retail purchase history; and (5) the contents of their online reviews and blog posts. Sellers can use these new types of information to make educated guesses about consumer characteristics like location, gender, and income. The second trend is the growth of the ad-supported business model, and the creation of a secondary market in consumer information. The ability to place ads that are targeted to a specific audience based on their personal characteristics makes information about consumers’ characteristics particularly valuable to businesses. This, in turn, has fostered a growing industry of data brokers and information intermediaries who buy and sell customer lists and other data used by marketers to assemble digital profiles of individual consumers.
Continue Reading White House Issues Report on Big Data and Differential Pricing
As we have previously reported, in less than two weeks the FTC will host its anticipated workshop on big data and discrimination. Today the FTC announced a full agenda and panelists for the September 15th event, “Big Data: A Tool for Inclusion or Exclusion?” which will take place in Washington, D.C., at the Constitution Center. The workshop is open to the public, and registration begins at 8 a.m. The following provides a full schedule of speakers and panels.
Continue Reading Schedule of Panelists for FTC’s Upcoming Big Data & Discrimination Workshop
Last Friday, the FTC announced an agenda for its upcoming workshop, “Big Data: A Tool for Inclusion or Exclusion?” which will take place on Monday, Sept. 15, starting at 8:00 a.m. As we’ve previously reported, the workshop will build on recent efforts by the FTC and other government agencies to understand how new technologies affect the economy, government, and society, and the implications on individual privacy. In particular, while there has been much recognition for the value of big data in revolutionizing consumer services and generally enabling “non‐obvious, unexpectedly powerful uses” of information, there has been parallel focus on the extent to which practices and outcomes facilitated by big-data analytics could have discriminatory effects on protected communities.
The workshop will explore the use of big data and its impact on consumers, including low-income and underserved consumers, and will host the following panel discussions:
- Assessing the Current Environment. Examine current uses of big data in various contexts and how these uses impact consumers.
- What’s on the Horizon with Big Data? Explore potential uses of big data and possible benefits and harms for particular populations of consumers.
- Surveying the Legal Landscape. Review anti-discrimination and consumer-protection laws and discuss how they may apply to the use of big data, and whether there may be gaps in the law.
- Mapping the Path Forward. Consider best practices for the use of big data to protect consumers.
The FTC hopes that the workshop will build on the dialogue raised in its Spring Privacy Seminar Series held from February through May, which addressed mobile-device tracking, data brokers and predictive scoring, and consumer generated and controlled health data. The workshop will convene academic experts, business representatives, industry leaders, and consumer advocates, and will be open to the general public. In advance of the workshop, the FTC has invited the public to file comments, reports, and original research on the proposed topics. The deadline to submit pre-workshop comments is August 15. Following the workshop on September 15, the comment period will remain open until October 15.
The workshop comes on the heels of the White House’s anticipated report on big data released in May, which outlined the administration’s priorities in protecting privacy and data security in an era of big data. With an entire section dedicated to “Big Data and Discrimination,” the report warned that big data “could enable new forms of discrimination and predatory practices.” Chiefly focusing on the use of information, the report showed concern about using data to discriminate against vulnerable groups. Specifically, the report stated that “the ability to segment the population and to stratify consumer experiences so seamlessly as to be almost undetectable demands greater review, especially when it comes to the practice of differential pricing and other potentially discriminatory practices.” …
Continue Reading The FTC’s Agenda to Tackle Big Data and Discrimination
Today the White House released its big data and privacy report, entitled “Big Data: Seizing Opportunities, Preserving Values.” The report is the result of a three-month review, which was led by White House counselor John Podesta and was first announced as part of the President’s January speech on NSA reform. It primarily outlines the…
This morning, the FTC announced that it would host a public workshop in September entitled “Big Data: A Tool for Inclusion or Exclusion?” in order to examine the increasing use of big-data analytics and its potential impact on low-income, diverse, and underserved American consumers. The FTC noted that while predictive-analytic techniques produce tremendous benefits by enabling innovation in medicine, education, and transportation, and in improving product offerings, manufacturing processes, and tailored ads, there is concern that insights from big data also “may be used to categorize consumers in ways that may affect them unfairly, or even unlawfully.”
The FTC gave examples of such practices that could limit certain populations of consumers’ access to higher quality products or services, including: (1) rewarding frequent customers with better service or shorter wait times; (2) offering a discounted mortgage rate to a consumer who has a checking, savings, credit card, and retirement account with a competitor; (3) providing offers for “gold level” credit cards to high-income consumers while offering low-income consumers subprime credit cards; (4) circumventing the requirements of the Fair Credit Reporting Act by assessing credit risk through unregulated “aggregate scoring models,” which are based on aggregate credit or demographic profiles of groups of consumers who shop at certain stores, rather than the credit characteristics of individual consumers. Although these types of uses of big data may be thought to bring about convenience, efficiency, and economic opportunity for some, consumer advocates have urged businesses and regulators to ensure that such techniques be implemented to respect the values of equality and opportunity for all.…
The Equal Employment Opportunity Commission has issued updated guidance concerning employer use of criminal histories. As many as 92 percent of employers use criminal background checks as part of their hiring processes.
The EEOC’s updated guidance generally provides that the EEOC will regard as suspect blanket or automatic exclusions of individuals from employment or promotion simply based on an individual’s criminal record, particularly when the individual is an African American or a Hispanic male. However, the EEOC indicates that it will accept as a defense to a statutory discrimination claim an employer’s showing that the exclusion is job-related and consistent with business necessity and that the employer has made an individualized determination that hiring or promoting the individual in question would be likely to create a risk of improper conduct that would be detrimental to the employer’s business or workplace. Specifically, the guidance indicates that, in making individualized assessments, employers should consider the following three factors:…