Demand for data ethics: Pushing for the enactment of new privacy laws

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  Quantumrun Foresight
• March 22, 2022

Insight summary

In an age where personal information is constantly collected and shared, understanding and implementing data ethics has become a vital concern for businesses, governments, and individuals. This awareness not only helps in protecting customer safety and avoiding legal issues but also shapes public perception, leading to customer loyalty and long-term success. The demand for ethical data use has led to new laws, regulations, and standards, resulting in a more secure digital environment, changes in business models, and a more responsible and discerning digital citizenry.

Demand for data ethics context

A good understanding of data ethics can enable businesses to identify any instances of unethical collection, storage, and data usage. Such awareness can help businesses protect the safety of their customers, while also avoiding potential legal issues that may arise from unethical business activities. By adhering to ethical guidelines, companies can build trust with their customers and stakeholders. This trust is essential in today's interconnected world where data breaches and privacy concerns are common.

Data ethics includes the moral obligations of collecting, protecting, and using personally identifiable information and how it affects individuals. Data ethics is not just the concern of information technology professionals, data scientists, and analysts but also the owners of the data, namely "the customers." Examples of these data may include email addresses, phone numbers, bank account details, and home addresses. Understanding and respecting these obligations is vital for businesses, as it ensures that they are handling sensitive information with care and integrity.

In addition to the legal and moral aspects, data ethics also plays a crucial role in shaping the public perception of a company. Consumers are becoming increasingly aware of their digital footprint and the ways in which their information is used. Businesses that are transparent about their data collection practices and adhere to ethical standards are more likely to be viewed favorably by the public. In a competitive market, this positive perception may lead to customer loyalty and long-term success.

Disruptive impact

Concerns about ethical data use regarding privacy are becoming increasingly critical, driving the demand for greater data ethics among the general public. Consumers of digital services respond to privacy policies that may lead to potential infractions of their data. For example, WhatsApp announced in January 2021 that a new privacy policy would allow the sharing of user data with its parent company Facebook. However, WhatsApp users rejected the new privacy policy because they perceived that the policy might endanger their data. Several WhatsApp users even opted for rival messaging companies such as Signal. 

Businesses can respond to the demands for ethical data use by following the five principles of data ethics. 

• First, the individual has ownership over their personal information. Businesses can obtain the customers’ consent through digital privacy policies and signed written agreements. 
• Second, data owners have a right to know how their information is collected, stored, and used. 
• The handling of data includes ensuring the owners' privacy. 
• Before collecting consumer data, businesses should be clear about their intentions to avoid hurting the owner or profiting from their weaknesses. 
• Lastly, organizations should consider the outcomes of data analysis to prevent any outcome that can cause unintentional harm to individuals.

The increasing demand for ethical data use has attracted the attention of governments and legislatures to codify user data protection. In recent years, there have been many new laws and regulations regarding data privacy. Noteworthy to mention is the California Consumer Privacy Act (CCPA) in the US, which gives residents of California the right to access their data. From a global perspective, the EU’s General Data Protection Regulation (GDPR) creates a more stringent compliance requirement for international data transfers. In Asia, the Japanese legislature recently amended its data privacy law, the Act on the Protection of Personal Information (APPI). 

Implications of demand for data ethics 

Wider implications of demand for data ethics may include:

• The creation of more stringent data storage and management solutions and legislation, leading to a significant reduction in the frequency and severity of security breaches by cyberattacks, which in turn enhances the overall cybersecurity infrastructure.
• Clearer frameworks for regulation and government policy enforcement, resulting in improved private and public sector data handling over the long term, setting a standard for responsible data management.
• Maturing the norms regarding how the public engages with online services and platforms, fostering a more responsible and discerning digital citizenry that demands transparency and ethical behavior from online providers.
• Increased investment in cybersecurity education and training programs, leading to a more skilled workforce capable of defending against sophisticated cyber threats, thus strengthening the labor market in the technology sector.
• The development of environmentally friendly data centers, focusing on energy efficiency and reducing carbon footprints, leading to a more sustainable approach to data management and storage.
• Enhanced collaboration between governments and tech companies, leading to the creation of international standards and agreements on data ethics, which can harmonize regulations across borders.
• A shift in business models towards more transparent data practices, leading to increased consumer loyalty and trust, influencing purchasing behaviors and brand preferences.
• The rise of new political challenges as governments strive to balance the need for security with individual privacy rights, leading to complex legal debates and potential shifts in policy-making priorities.

Question to consider

• Do you think data linking and aggregation can violate individuals' privacy and anonymity?
• Do you think it is possible to achieve complete ethical data accountability, especially with enforcing data privacy laws?