Four Principles of Ethical Data Use

By Jill Engel

Published on 14 Jan, 2022

Have you ever thought about the data your company collects on any given day? When companies collect a large amount of data, ethical questions arise (e.g., what they should or shouldn’t do with that data), especially when dealing with sensitive or personal information. Below, we outline our four basic principles of ethical data use. Let’s keep you in good standing with your customers, prospects, and society on the whole.

Data ethics: more than a social dilemma

We all know that consumers often exchange data for additional services or value from organizations, whether or not they realize what data they’re giving up. After all, who actually reads all of the “Terms & Conditions” before clicking “Agree”? Take social media platforms as an example. Consumers must accept the terms of service before they can set up an account, but they are not always aware of what they are “agreeing.” Unfortunately, companies can take advantage of this naivety.

The WhatsApp controversy provides an excellent example of people starting to care more about their privacy. Even though they didn’t change their privacy terms and conditions very much, the changes gave light to exactly how much of our privacy we give up. The controversy resulted in millions of people jumping off of WhatsApp and moving to apps like Signal.

Several years ago, Facebook conducted an experiment. They curated individual news feeds for thousands of unwitting users to show especially sad or happy content for a week. The results revealed that those who were exposed to negative content were more likely to post negative things and vice versa.

Though their terms of service make this experiment legal, many would deem it unethical. Not only were the users unaware of this experiment and the purpose of the data use, but Facebook inherently set out to manipulate their users’ emotions and state of mind through curated content. 

This is where questions of ethics come into play. People expect algorithms to curate content and ads based on consumer behavior, but how ethical is using the addition of human intervention or bias to manipulate a customer base? Especially when companies manipulate the emotions of that base, and without informed consent, no less. Who controls that decision? And how can we make sure everyone plays fairly?

How can ethical data be demonstrated in analytics?

With the rise in data scandals and the misuse of collected information, companies will increasingly be held accountable for the data they collect. We believe the Facebook experiment shown above is a perfect example of big data used unethically due to a lack of policy and transparency for their users. 

Without regulation and policy in place, customer information can go anywhere and be used in any way. It is the responsibility of the organizations collecting the data to create procedures that ensure they treat their customers fairly and ethically.

While there are still many unanswered questions around ethics and fairness, we encourage you to follow these four basic principles of ethical data use.

#1. Basic transparency with customers

Be as transparent as possible with customers and provide the intended use of the data you collect, as governed by your national or state legislation. In fact, in Canada, customers have the legal right to be informed about where their data is being used or to whom companies are selling it. California (CCPA) and Virginia (CDPA) also address this topic with their own privacy laws, with many other states following close behind.

Best practices suggest that you could take this transparency a step further by giving the customer a visual of what is being collected and how it is being used, and communicating your intentions in clear and simple language. If at any time you change the way you use customer data, it should be your moral and professional obligation to let your customers know about those changes––and ask for their permission to continue using their data.

#2. Control of Data

Give customers control of their personal data by granting them the ability to manage the flow of their private information. Customers should also have the ability to opt-out at any time. Numerous countries have already passed laws that require companies to make it easier for their contacts to opt-out of receiving emails or other messages. This gives them more control over their contact information. 

#3. Access to Data

Give customers the right to access their data at any time and the ability to challenge how you use their data. Accomplish this by providing your contacts data visibility and offering a breakdown of the statistics you have collected and documented. Be sure to inform the customer about what they are giving up in exchange for the service or discount they will receive by providing you with their information.

#4. Accountability of the use of data

In order to maintain a reputable level of ethical and legal accountability, put measures in place. Consider the kinds of forecast, analysis, and inference that should or shouldn’t be utilized when analysts work with the data. Algorithms can unintentionally engage in unconscious biases, so be sure to understand the collected data in order to ensure you are fairly representing all consumers. Big data should not institutionalize unfair biases. 

Can ethics and data really work together?

They must! By following our four principles and guidelines above, your customers will feel confident that you are collecting and using their data in an ethical manner. Putting these principles and guidelines in place will help you protect personally identifiable information and build credibility with your customer base.  

This ethical credibility could potentially translate into a competitive advantage over companies who haven’t taken the time to build that trust with their customers. As a result, those companies could fall behind as additional regulations and laws impacting this space emerge. 

If you would like to further discuss the ethical use of your organization’s data, contact Shift Paradigm. We’ll gladly connect you with our compliance experts. We would love to help you ensure you are charting the right course to safeguard your customers’ data and retain their trust and loyalty.

Written By Jill Engel

Jillian Engel, Sr. Manager, Insights & Analytics, brings with her over a decade of experience in the fields of data analytics, marketing, and consulting. She specializes in bringing a human element to the customer data world and works with her clients to establish end to end connections – from insights to enablement.
Email Icon