The power technology has in our lives seems to be increasing with each passing year, and the capabilities of our technology are greater than ever. As technology proliferates — not just through its reach into new markets, but also through the ever-greater number of devices most people in the developed world use on a regular basis — and as the devices themselves become increasingly powerful, there are both opportunities and risks.
This is true for businesses as much as it is for individuals. Although technology and the data it yields can provide substantial market advantages, it also puts companies at risk of running into legal trouble related to privacy, regulation and the responsibility to protect those represented by the data.
The key issue with big data from consumers’ point of view is privacy. As data is used in market research or provided to third parties, companies face the challenge of needing to sufficiently anonymize the data to avoid revealing customers’ identities. Unfortunately, making sure data is truly anonymous is very difficult, as a number of major companies, including AOL and Netflix, have learned the hard way.
Furthermore, consumers have to be assured that their personal data is not being misused or used without their consent. Typically, the best approach is to notify consumers ahead of time of the ways in which their data may be used and to obtain proper consent. This is often done through collecting a virtual signature or other type of consent on a privacy statement.
Proactive thinking is key
Another challenge companies face in regard to data collection is that, because technology is changing so rapidly, the regulatory system is in a constant state of flux. Not surprisingly, this makes it difficult for organizations to know for sure whether or not they are in compliance. Adding to the confusion is the fact that data must be physically stored, and often this happens in a number of different locations — each of which may have its own regulatory system in place. This is especially true when data is stored overseas.
Finally, there is the question of whether companies ought to proactively look to identify risks that could compromise consumers’ privacy before any problems actually arise. Many would say that looking for problems with data collection, anonymization and dissemination practices would be to the companies’ benefit, but even this may not be enough. In the event that there is a data breach and privacy is compromised, would a company then be considered liable? As the law changes, this question is on the minds of many corporate managers and business owners.
As technology continues to change and becomes ever more capable of revealing the most intimate and specific details about people’s lives, businesses and organizations are faced with the urgent need to ensure that they are well protected against the potential repercussions that could arise from the misuse of data. A skilled attorney can help with this process on an ongoing basis.
BoltNagi is a widely respected and well-established corporate and business law firm serving clients throughout the U.S. Virgin Islands.