The Big Data and Privacy Working Group appointed by President Barack Obama released a report that emphasized the need to protect consumer privacy and to be on guard for “new modes of discrimination” that could arise from the use of big data.

Although the report acknowledged the benefits of big data and the fact that personalized advertisements and content can benefit consumers, it also cautioned that “perfect personalization” can result in “real harm” because it “leaves room for subtle and not-so-subtle forms of discrimination in pricing, services, and opportunities.” Specifically, the Group cited findings that searches for black-identifying names like “Jermaine” were more likely to generate ads that contain the word “arrest” when compared to similar searches for white-identifying names like “Geoffrey.”

President Obama created the Group, led by counselor John Podesta, earlier this year and requested a 90-day examination of big data. The resulting “Big Data: Seizing Opportunities, Preserving Values” report offers six recommendations that included extending privacy protections to non-U.S. persons, ensuring that data collected on students in schools are used for educational purposes, and expanding technical expertise to stop discrimination.

Agencies such as the Federal Trade Commission, the Department of Justice, and the Consumer Financial Protection Bureau “should expand their technical expertise to be able to identify practices and outcomes facilitated by big data analytics that have a discriminatory impact on protected classes, and develop a plan for investigating and resolving violations of law,” the Group suggested.

Three additional recommendations specifically encouraged federal legislation. In addition to updating the Electronic Communications Privacy Act for the 21st century, the report advocated for the passage of a Consumer Privacy Bill of Rights and a national data breach legislation bill to create a uniform national standard instead of the existing “patchwork” of 47 state laws.

“Americans have a right to know if [their] information has been stolen or otherwise improperly exposed,” according to the report.

To read the report, click here.

Why it matters: The report offered good news and bad news. While it recognized the value of big data, it also observed the potential for misuse. Advertisers should take note of the legislative recommendations as well as the report’s discussion of potential discrimination, as it could provide the basis for future consumer suits or Federal Trade Commission actions.