Companies’ use of data analytics is booming, with businesses seeking to leverage large amounts of raw data to analyze trends, make decisions, and enhance products, services, and marketing opportunities. However, when analyzing this raw data, companies should be mindful of the data’s source(s) and the use restrictions that may apply under applicable law and contracts.

There are numerous potential sources for data, including the following:

  • Companies’ customers and end users providing data directly to the company (such as by registering on the company website or participating in social media), or the company gathering information about customers and end users through the use of “cookies” or other means
  • Companies licensing data from third parties (such as a subscription data feed)
  • Companies obtaining data from a data-analytics service provider
  • Companies obtaining data from business partners that have gathered or produced the data themselves

Before engaging in an analytics effort, companies should determine, for each data source, whether they have the right under applicable law and contracts to analyze the data (and use the output of that analysis) in the manner intended. Next week, we will go into further detail regarding this diligence process and how it may vary depending on different data sources.