FTC chair warns of boom in user data collection

With trends such as the Internet of Things (IoT) set to be one of the key developments in the technology sector this year, many firms are likely to hugely increase the amount of information they gather on their customers with the help of a new generation of sensors.

Details on users' habits, preferences and day-to-day activities are set to play a major role in many big data analytics applications in 2015 and beyond as organisations seek to gain a greater understanding of their customers and tailor their offers and services accordingly.

But this will require them to handle a great deal of sensitive information about individuals – such as credit history, health, religious preferences, family, friends and a host of other indicators – and this brings with it a wide range of risks that companies must deal with.

Ensuring the privacy of their users must therefore be a top priority for businesses that are taking advantage of IoT technology to improve their big data operations.

This is according to chairwoman of the US Federal Trade Commission (FTC) Edith Ramirez, who was speaking about the implications of creating a "deeply personal" view of customers at this week's CES 2015 trade show in Las Vegas.

Ms Ramirez said the potential benefits to firms as a result of the IoT and big data are "immense" – but so too are the risks."

"We have an important opportunity right now to ensure that new technologies with the potential to provide enormous benefits develop in a way that is also protective of consumer privacy," she was quoted as saying by the Financial Times.

What this means is businesses will have to consider the security and privacy implications very carefully when they are developing a big data solution that is dependent on such personal customer information.

As well as putting in place tough measures to protect their systems from data breaches, they should also be transparent when it comes to explaining to customers what data they are collecting, what organisations and personnel it will be shared with and what it will be used for.

Ms Ramirez added that data should only be gathered for a specific purpose – rather than on the "off-chance" a valuable use may later be found for it – and that firms that do not respect privacy will lose the trust of customers.