FTC wants to stretch regulatory arm in big data

The Federal Trade Commission focuses on preventing unfair business practices and protecting consumers -- and Commissioner Maureen Ohlhausen says data transparency will be an increasingly important part of that equation.

At an event hosted by the Center for Data Innovation and the Sunlight Foundation in Washington, D.C., on July 23, Ohlhausen described the three ways her agency is approaching open data.

The first step for the FTC will be to adopt and promote a realistic understanding of big data, recognizing its benefits and shortcomings, she said.

A recent project in Boston exemplifies the ways in which big data can be misleading, according to Ohlhausen. The city of Boston launched an app, StreetBump, in July 2012, which allowed Bostonians to locate and report potholes to city government.

Ohlhausen pointed to this as an example of the circumstances in which big data findings might require a sharper eye. Most of the potholes reported via the app were in wealthier, suburban areas -- a reflection more of the ubiquity of smart phones in those areas than of an abundance of potholes.

"By understanding the limits of big data, and emphasizing the need for human judgment with the use of such tools, the FTC can help tamp down the hype of big data," Ohlhausen said.

"The FTC can help create a healthier regulatory atmosphere by critically evaluating the claims of both the pop-science promoters of big data as a "magic bullet" solution and the naysayers who fear massive consumer harm from all-knowing algorithms, she said," she said.

Secondly, Ohlhausen said, the FTC can provide guidance on protecting the privacy of individuals while promoting open data. She said the FTC can work with agencies on how to open up data while mitigating privacy risks through techniques such as use-based limitations, de-identification and aggregation.

By taking those steps, more people will be able to use valuable datasets – including health care and education data -- with less risk.

Lastly, the FTC plans to use its authority as an enforcement agency to ensure a level playing field when it comes to data. By taking a "humble, regulatory" approach to the data scene, Ohlhausen said, the FTC can help instill a culture in government that embraces big and open data.

"Ultimately, our work as an agency should help strengthen competition and allow the market to better provide beneficial outcomes in response to consumer demand, rather than dictate desired outcomes to the market," she said.

The FTC is also trying to increase transparency for consumers regarding who has access to their data. In May, the commission made a recommendation to Congress to boost the transparency of consumer information in the hands of data brokers.

Similarly, Ohlhausen encouraged agencies to be more open about what data they have on consumers, in order to "promote consumer interest in and acceptance of open data more generally."

The FTC's own data sets leave something to be desired in terms of availability, although Ohlhausen said the commission has been a pioneer in opening up its data. FTC annual reports are still in PDF format, which are unsearchable, and it has not opened up many of its datasets on Data.gov.