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Ethics of Data in the Digital Era

Big data is everywhere. In fact, we have created more data within the past two years than we have throughout history. Nearly every industry, spanning from healthcare to retail, is being completely transformed by big data; its effect on our world and future cannot be ignored.

Within the retail industry, companies rely on insights from customer data to help them enhance operations. However, collecting this data is creating a gap between the customers and the businesses seeking this personal information. In the past, companies have disregarded customer concerns about privacy, security, and other important factors, creating a lack of trust.

However, governments have started to take notice of the concerns surrounding the ethical implications of big data. Responses have taken the form of laws such as the California Consumer Privacy Act (CCPA) and the EU General Data Protection Regulation (GDPR). These laws are meant to restrict the way companies can obtain and use consumer data, and they reflect the overall lack of trust between companies and the general public.

Additionally, these regulations underscore several ethical questions around collecting and managing big data, including what responsibility businesses have in ensuring they are acquiring customer data in a non-invasive, morally correct manner.

Data ethics are not just a concern for the general public; companies that do not consider consumer concerns about how personal data is collected and used can damage their brand image in the process.

Below are a few simple things that companies can do to increase their trustworthiness, avoid the negative ethical implications of data collection, and still obtain all the information they need:

1. Ask permission

Consumers are actually more willing to give up their data to companies that ask for it first. The transparency creates a more trustworthy image for companies that do so. Giving certain rewards for customers who willingly give their data to a business in the form of loyalty programs and reward points show their customers that they understand the value of the data they are giving up, further increasing the trust of this transaction between the business and the individual.

2. Inform customers about how their data will be used

This also has a lot to do with transparency. Customers who are left in the dark about how their data is used will often assume the worst. Letting customers know why a company wants their data, and to what extent it will be used, gives them a sense of security and gives businesses the opportunity to prove that they value the privacy of their customer base.

3. Invest in data security

Companies can be severely affected by data breaches. Customers are also concerned about their data getting into the wrong hands, which leaves the responsibility of preventing this to the companies that manage their data. Investing in security measures further proves that a company understands the value of this information and that it’s a necessary protective measure for both companies and customers alike.

The future of data ethics is uncertain. Most likely, governments will continue to enact their own regulations and laws surrounding the ethical management and collection of consumer data by companies as time goes on and more companies fail to see the value of data ethics. How customers will perceive data ethics is unclear and differs greatly from country to country.

In any case, retailers are better off implementing their own measures to ensure ethical data management, and those who do will be ahead of the curve. Though data management is an investment, companies that wish to maintain a sense of trust between them and their customers will find it worthwhile. Such measures can help companies ensure that they continue to obtain the data they need for their operations and development in the future, while still responding to the concerns of their customers.

About the Authors

Alexandra IsaievaAleksandra Isaieva is legal counsel at Competera. She has more than eight years of legal and compliance experience in IT start-ups, multinational pharma, and consumer companies. Isaieva specializes in commercial matters, in particular, data control and ownership, technology use and licensing, business terms, and best market practices.
Alexandr GalkinAlexandr Galkin is the CEO and co-founder of Competera, a price optimization software for enterprise retailers. He is also a Forbes Technology Council member, and has been a speaker at IRX, eCommerce, and RBTE conferences.


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