With data mining firms like Cambridge Analytica in the news, this topic has been a source of debate. From political operations to major brands, many companies use data mining to drive their marketing efforts. Data operations help determine where to hold rallies, which advertising campaigns are right for the market and how to reach out to potential consumers. For data mining to work, it has to follow the laws and regulations.
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How Does Data Mining Work?
When someone shops or interacts with a website, they leave a digital trail behind. Consumers create 2.5 quintillion bytes of data a day. The data industry is worth billions of dollars. It is used by governments, businesses and political campaigns to learn more about individuals.
This data includes information about what someone buys, who they talk to and what they do. Data mining uses machine learning to predict patterns in decision making. It is used in everything from medical research to predicting the weather. For political campaigns, consumer data is used to build a profile about how the individual might vote and the right marketing campaign for each person. Through data collection, companies and campaigns can predict future behavior and the user’s interests.
Data Mining and Regulations
Data mining is regulated differently throughout the world. In Europe and the United Kingdom, data protection laws require the organization to have a legal basis for analyzing, obtaining, sharing or selling data. The UK Data Protection Act of 1998 states that anyone who has their data processed has a right to access it.
The new General Data Protection Regulation (GDPR) also requires consent. For a company to collect data, they must give citizens the chance to consent to the collection or object. If the company breaks this rule, it can face stiff penalties.
The United States and Data Mining Regulations
According to the John Marshall Journal of Information Technology and Privacy Law, the Federal Trade Commission (FTC) is currently in charge of regulating data. The FTC and state laws have tried to protect consumer privacy, but many of these regulations are ineffective.
Right now, the FTC uses a framework based on simplified choice, privacy by design and greater transparency. During the Obama administration, it used a Privacy Bill of Rights to increase individual control, security, accuracy, and transparency. The goal was to help consumers have extra control about what information companies could collect and how the information was used.
Privacy by design laws mean that companies should implement policies that ensure consumer privacy. Meanwhile, simplified choice requires companies to give consumers the choice about whether their data is collected. With greater transparency rules, consumers are supposed to get simple, short privacy policies that they can actually understand.
Consumers often think of data mining as something that occurs when they use an online app or website. In reality, the consumer’s information is collected any time they use their credit card at the store. Companies collect personal information from the credit card and can sell it to third parties. Unfortunately, privacy protections are still in their infancy, so consumers may continue to face unwanted data mining.