Americans embrace nudity on public beaches but refuse to have their salaries shared on the web.
A man can be denied health insurance before he steps foot into a hospital. Target will know when a woman is pregnant before she even tells her closest friends. What do these three scenarios all have in common? They are a direct consequence of big data, the large amount of information gathered and stored for strategic analysis.
Many Americans are oblivious as to what big data is and how it is used against them. With modern technology, big data can record people’s basic information such as their name, age, and address, but also make detailed inferences such as their shopping preferences, hobbies, and likelihood of taking risks.
Corporate giants like Amazon, Google, and Target heavily rely on data analytics as the core of their marketing strategy. These companies will keep extensive data of just one person and share the information with clients from a range of industries without notifying the customer. While data analysis can lead to smarter business decisions, big data infringes upon people’s privacy and discriminates against people based on their background.
Businesses can unfairly charge different customers different prices with the help of big data. In September 2000, a customer was quoted $17 for a DVD on Amazon, but when he logged into his friend’s account, the price was $10. He reported the inconsistency to Amazon and the CEO Jeff Bezos apologized for what he claimed to be Amazon’s random price test experiment.
This price test was not random, but rather a form of price discrimination incurred through data analytics. Amazon’s algorithm determined the man is a returning customer, whereas his friend is new. To attract new customers, companies like Amazon will use their data analytics to charge returning customers higher prices and new customers lower prices.
Companies have access to immense data about their customers ranging from their search history to the type of laptop they are using. This is how retail stores like Target accurately predicted a woman was pregnant. After searching for a blue rug, vitamin supplements, unscented lotion, and a purse big enough to fit a diaper bag, Target’s algorithm determined there is an 87 percent chance that she is pregnant and that her delivery date is sometime in late August. Scary right?
According to TIME Magazine’s Alicia Adamczyk, prior to 2014, insurers would use databases to gather information about a person’s health and background. Insurance companies would then classify certain people with pre-existing medical conditions as “high-risk” and charge them a higher premium or blatantly deny them insurance coverage.
Overall, there are many instances where big data is used to exploit and discriminate against individuals. People can avoid falling victim to the dangers of big data by actively filtering through what they are reading and comparing prices across different websites. However, consumers cannot curtail the expansion of big data by themselves. The government must step in and regulate how firms are implementing their data.
If big data avoids being intrusive and is applied properly, people’s salaries will be kept private, the sick will have access to health insurance, and pregnant women will be matched with suitable products. Although it will be difficult to determine the fine line between business strategy and privacy breaching, an economy where big data is used for enhancement instead of exploitation is a step towards social prosperity.