Data Management

Where does privacy figure into FTC data discussions?

Paul Rosenzweig

When the Federal Trade Commission (FTC) hosts a workshop, titled "The Big Picture: Comprehensive Data Collection," on December 6, 2012, to explore the practices and privacy implications of the comprehensive collection of data about consumers' online activities, it should expand the scope of its examination.  One topic germane to the workshop's consideration but seemingly not on the agenda is the adequacy of privacy protections for public sector consumers (including students and staff in educational institutions and employees of federal, state or local governments) who use cloud-based systems.  It behooves the FTC to also include these consumers in its examination of the privacy implications of cloud services.

There are, of course, sound business reasons why cloud service providers aggregate data across multiple accounts and services: the results are extremely valuable.  Seemingly unrelated personal data, when aggregated and mined at large scale, can provide immense value to advertisers, marketers, corporate sales forces, and others.  The revenue generated by combining and monetizing such data -- by mining the mosaic -- is the reason "free" cloud services can afford to be free.  But that, in turn, means that cloud services come with a hidden cost - because there really is no such thing as a free lunch.  That hidden cost is the loss of privacy (and even, in extreme cases, the loss of security) that comes with a pervasive data aggregation and analysis regime.

The FTC is appropriately concerned with threats to individual privacy inherent in data-mining business models for the average private consumer.  Less noticed but of equal concern, is the potential use of these same tools and techniques to aggregate and analyze information concerning public sector employees (who, after all, are also consumers) and, potentially, public sector institutions themselves such as government agencies.  The privacy interests of public sector employees are no less important than those of private citizens and, to the extent that they are doing the public's business, they may perhaps be of even more importance to the commonwealth.  For beyond the risks to individual privacy, regulators and government consumers also need to be aware of the risks to national security, government integrity, confidentiality of student information, and even personal safety that might result from the data mining of public sector data.         

In general (and at the risk of oversimplifying), the current rule is that the use of data collected from public sector organizations by cloud service providers is governed by contract.  If the contract does not prohibit data aggregation of user content, then the cloud provider is legally free to use the data in conformance with generally applicable privacy policies.  Those policies, in turn, generally provide for the confidentiality of user data with respect to third parties, but often permit the cloud service provider to aggregate and analyze a users' data for its own purposes.  These purposes can range from improvement of products and services to the marketing of consumer information.  And that means that, in the absence of a contractual prohibition public sector consumers cannot be assured that aggregation of their data is not occurring.  In many ways, the issues for public sector users replicate those under consideration by the FTC in the context of private sector consumers - both types of consumers are looking for greater transparency, the availability of opt-out provisions rules, and default settings that empower choice.

Likewise, public sector users are consumers of web-based information services.  Here, too, their concerns mirror those of the private sector.  Their search histories and patterns tell much about what they are interested in.  And that, in turn, may reveal much about what the interests of the government are - a SEC employee's search history may identify the next regulatory initiative and a local county research history may presage a tax hike.  To be sure, web sites often seek to avoid regulatory limitations by treating privacy regulations as restricting only certain uses of collected personal information, rather than as a limitation on collection itself.  But that, too, is a fit subject for the FTC to examine.

Finally, data aggregation of government-originated data may pose governance problems for the public sector consumer.  In the absence of a strong encryption policy or a confirmation that only US citizens are responsible for the security of government data, the move to cloud services raises distinct possibilities that governments may lose control of their information (and that of their employees as well as its citizens).

For these reasons the FTC's inquiry into privacy issues at their December 6 workshop should be undertaken while cognizant of the reality that much of its work on private consumer protection will have direct and indirect consequences for public sector consumers and, in the end, all public sector institutions, including government agencies, schools, and universities.  Inasmuch as this particular perspective has often been absent from the current set of discussions, the Commission should seek to expand its consideration to include these concerns.

About the Author

Paul Rosenzweig is a senior adviser to The Chertoff Group, a global security advisory firm. He formerly served as deputy assistant secretary for policy at the Department of Homeland Security.

The Fed 100

Read the profiles of all this year's winners.


  • Then-presidential candidate Donald Trump at a 2016 campaign event. Image: Shutterstock

    'Buy American' order puts procurement in the spotlight

    Some IT contractors are worried that the "buy American" executive order from President Trump could squeeze key innovators out of the market.

  • OMB chief Mick Mulvaney, shown here in as a member of Congress in 2013. (Photo credit Gage Skidmore/Flickr)

    White House taps old policies for new government makeover

    New guidance from OMB advises agencies to use shared services, GWACs and federal schedules for acquisition, and to leverage IT wherever possible in restructuring plans.

  • Shutterstock image (by Everett Historical): aerial of the Pentagon.

    What DOD's next CIO will have to deal with

    It could be months before the Defense Department has a new CIO, and he or she will face a host of organizational and operational challenges from Day One

  • USAF Gen. John Hyten

    General: Cyber Command needs new platform before NSA split

    U.S. Cyber Command should be elevated to a full combatant command as soon as possible, the head of Strategic Command told Congress, but it cannot be separated from the NSA until it has its own cyber platform.

  • Image from Shutterstock.

    DLA goes virtual

    The Defense Logistics Agency is in the midst of an ambitious campaign to eliminate its IT infrastructure and transition to using exclusively shared, hosted and virtual services.

  • Fed 100 logo

    The 2017 Federal 100

    The women and men who make up this year's Fed 100 are proof positive of what one person can make possibile in federal IT. Read on to learn more about each and every winner's accomplishments.

Reader comments

Thu, Dec 27, 2012 Dennis Mobile, AL

According to Black's Law Dictionary, the right to privacy is a natural right (i.e. the personal property of all individuals) and is not subject to taking for profit or curiosity. Similarly, the right is further endowed in the Bill of Rights, which allows that all citizens have a right to be secure in their papers and property. These rights have been under direct attack by both the private sector (e.g. tracking cookies) and the government (e.g. "Patriot" Act surveillance provisions) for well over a decade. The rights to such privacy are well established in law however, as we have seen, where the law interferes with profit or federalism it is of little use and most likely to be ignored.

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above

More from 1105 Public Sector Media Group