Reference no: EM131452199

Question: A data broker or data aggregator is a company that acquires and purchases consumer and other data from public records, retailers, Internet cookie vendors, social media trackers, and other sources and uses it to create business intelligence that it sells to companies and the government. Two prominent data brokers are Datalogix and Acxiom Corporation. Data brokers gather vast amounts of data. According to The New York Times, as of June 2012, Acxiom Corporation had used 23,000 servers to process data of 50 trillion transactions on 500 million consumers. It stores more than 15,000 data points on some consumers.10 So, what do data brokers do with all this data? If you buy pizza online on Friday nights only when you receive a substantial discount, a data broker (or the broker's customer) knows to send you a discount pizza coupon Friday morning.

If you use a customer loyalty card at your local grocery store and regularly buy, say, large bags of potato chips, the data broker or its customer will send you coupons for more potato chips or for a second snack product that is frequently purchased by potato chip consumers. Or, as discussed in Q1, if you suddenly start buying certain lotions and vitamins, the data broker will know you're pregnant. Federal law provides strict limits on gathering and using medical and credit data. For other data, however, the possibilities are unlimited. In theory, data brokers enable you to view the data that is stored about you, but in practice it is difficult to learn how to request your data. Further, the process for doing so is torturous, and ultimately, the data that is released is limited to innocuous data such as your name, phone numbers, and current and former addresses.11 Without an easy means for viewing all of your data, it is impossible to verify its accuracy. Of even greater concern, however, is the unknown processing of such data. What business intelligence techniques are employed by these companies? What are the accuracy and reliability of those techniques? If the data broker errs in predicting that you'll buy a pizza on Friday night, who cares? But if the data broker errs in predicting that you're a terrorist, it matters. Data brokers are silent on these questions.

1. We've used Kant's categorical imperative for assessing ethical behavior: Act as if you would have your behavior be a universal law. As a litmus test, we've said that if you're willing to publish your behavior in The New York Times, then your behavior conforms to the categorical imperative.

a. Consider the inverse of that litmus test. Is it true that if you're not willing to publish your behavior in The New York Times, it is unethical? (Or, in a different but equivalent form: Your behavior is ethical if and only if you're willing to publish it in The New York Times.)

b. Considering your answer to question a, if data brokers are unwilling to say what data they are collecting and how they are processing it, is it reasonable to conclude their behavior is unethical? Explain your answer.

2. Using business intelligence on purchasing data for targeted marketing seems innocuous. Is it? Using both the categorical imperative and utilitarian perspectives, assess the ethics of the following:

a. Some people, whether from genetic factors, habit, lack of education, or other factors, are prone to overeating junk food. By focusing junk food sales offers at this market segment, data brokers or their customers are promoting obesity. Is their behavior ethical?

b. Data brokers claim they can reliably infer ethnicity from consumer behavior data. Suppose they also determine that one ethnic group is more likely to attend college than others. Accordingly, they focus the marketing for college-prep materials, scholarships, and university admissions applications on this ethnic group. Over time, that group will be guided into positive (assuming you believe college is positive) decisions that other groups will not. Is this behavior different from ethnic profiling? Is it ethical?

3. Suppose a data broker correctly identifies that your grandmother is addicted to playing online hearts. From its business intelligence, it knows that frequent hearts players are strong prospects for online gambling. Accordingly, the data broker refers your grandmother's data to an online gambling vendor. Grandma gets hooked and loses all of her savings, including money earmarked for your college tuition.

a. Is the data broker's behavior ethical?

b. Assume the data broker says, "Look, it's not us, it's our customer, the online gambling vendor, that's causing the problem." Does the broker's posture absolve it of ethical considerations for Grandma's losses?

c. Assume the online gambling vendor says, "Look, it's not us; it's Grandma. We provide fair and honest games. If Grandma likes to play games where the odds of winning are low, talk to Grandma." Assume in your answer that the gaming company has gone to great lengths to provide the elderly with an emotionally rewarding user experience for games with low winning odds. Does the vendor's posture absolve it of any ethical considerations for Grandma's losses?

4. According to the Privacy Act of 1974, the U.S. government is prohibited from storing many types of data about U.S. citizens. The act does not, however, prohibit it from purchasing business intelligence from data brokers. If the government purchases business intelligence that is based, in part, on data that it is prohibited from storing, is the government's behavior ethical? Use both the categorical imperative and utilitarian perspectives in your answer.