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Will the information and delivery services industry like data minimization?

Posted January 27th, 2015 in knowledge economy, knowledge market, privacy and tagged , by Alton Drew

Today the Federal Trade Commission released a report on the Internet of Things and the best practices companies could put in place to protect consumer privacy.  The scope of the report was limited to IoT devices that consumers use to access other devices via the internet.  In addition, one of the best practices for securing consumer privacy mentioned in the report was the concept of data minimization.

How would data minimization impact firms within the information and delivery services industry who rely on large amounts of data in order to analyze consumption behavior?  The FTC defines data minimization as limiting the collection of consumer data, and retaining that information only for a set period of time and not indefinitely.  By minimizing collected data, tyhe FTC believes that larger data storers may make themselves less attractive to thieves and that the risk that data will be used in a way departing from consumer expectations will be reduced.

What the report overlooks are firms that consumers may not have face-to-face exposure to.  Take for example Broadridge Financial Solutions.  Broadridge processes and transfers sensitive personal information provided to them by their clients.  These clients include financial institutions, public companies, and mutual funds.  Under certain circumstances Broadridge’s own vendors may have access to the personal information Broadridge receives.  According to the company, they maintain systems and procedures to protect consumer data including encryption, authentication technology, data loss technology, and the transmission of data over private networks.

Even with their own protections in place, would information and delivery services firms like Broadridge see a decrease in volume if their clients are forced via additonal best practices to collect a limited field of data?  I’ve read nothing in the financials of a number of companies that tell me that they are concerned about additional regulations from the FTC indirectly impacting them.  Bear in mind that the clients for these information firms are other business firms, but since the information they analyze is collected by firms with direct exposure to consumers, information and delivery services firms and their investors should be aware of these developments in the regulation of the internet of things.

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