Jules Polonetsky & Omer Tene, Privacy in the Age of Big Data: A Time for Big Decisions
Comment by: Ed Felten
Published version available here: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2149364
Workshop draft abstract:
We live in an age of “big data”. Data has become the raw material of production, a new source for immense economic and social value. Advances in data mining and analytics and the massive increase in computing power and data storage capacity have expanded by orders of magnitude the scope of information available for businesses, government and individuals. In addition, the increasing number of people, devices, and sensors that are now connected by digital networks has revolutionized the ability to generate, communicate, share, and access data. Data creates enormous value for the world economy, driving innovation, productivity, efficiency and growth. At the same time, the “data deluge” presents privacy concerns which could stir a regulatory backlash dampening the data economy and stifling innovation.
Privacy advocates and data regulators increasingly decry the era of big data as they observe the growing ubiquity of data collection and increasingly robust uses of data enabled by powerful processors and unlimited storage. Researchers, businesses and entrepreneurs equally vehemently point to concrete or anticipated innovations that may be dependent on the default collection of large data sets. In order to craft a balance between beneficial uses of data and individual privacy, policymakers must address some of the most fundamental concepts of privacy law, including the definition of “personally identifiable information”, the role of consent, and the principles of purpose limitation and data minimization.
In our paper we intend to develop a model where the benefits of data for businesses and researchers are balanced with individual privacy rights. Such a model would help determine whether processing could be based on legitimate business interest or subject to individual consent and whether consent must be structured as opt-in or opt-out. In doing so, we will address questions such as: Is informed consent always the right standard for data collection? How should law deal with uses of data that may be beneficial to society or to individuals when individuals may decline to consent to those uses? Are there uses that provide high value and minimal risk where the legitimacy of processing may be assumed? What formula determines whether data value trumps individual consent?
Our paper draws on literature discussing behavioral economics, de-identification techniques, and consent models, to seek a solution to the big data quandary. Such a solution must enable privacy law to adapt to the changing market and technological realities without dampening innovation or economic efficiency.
 McKinsey, Big data: The next frontier for innovation, competition, and productivity, June 2011, http://www.mckinsey.com/Insights/MGI/Research/Technology_and_Innovation/Big_data_The_next_frontier_for_innovation.