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White House seeks tougher regulations on online privacy

Report focuses on private firms’ data collection

WASHINGTON — The White House, hoping to move the national conversation on privacy beyond data harvesting by intelligence agencies to the practices of companies such as Google and Facebook, released a long-anticipated report Thursday that recommends requiring private companies to release information they gather from their customers online.

The report, whose chief author is John D. Podesta, a senior White House adviser, is the next step in the administration’s response to the disclosures by Edward J. Snowden, the former NSA contractor that began the debate.

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Because the effort goes so far beyond information collected by intelligence agencies, the report was viewed warily in Silicon Valley, where companies see it as the start of a government effort to regulate how they can profit from the data they collect from e-mail and Web surfing habits.

Podesta, in an interview, said President Obama was surprised during his review of the NSA’s activities that “the same technologies are not only used by the intelligence community, but far more broadly in the public and private spheres because there is so much collection” from the Web, smartphones, and other sensors.

“You are shedding data everywhere,” Podesta said.

The report makes six policy recommendations. They include passing a national data breach law that would require companies to report major losses of personal and credit card data, after attacks like the one on Target that exposed credit card information on roughly 70 million customers. It seeks legislation that would define consumer rights regarding how data about their activities is used. It suggests extending privacy protections to individuals who are not citizens of the United States and argues for action to ensure data collected about students is used for only education purposes.

But the most significant findings in the report focus on the recognition that data can be used in subtle ways to create forms of discrimination — and to make judgments, sometimes in error, about who is likely to show up at work, pay their mortgage on time, or require expensive treatment.

‘There is a role for government to hold companies accountable and establish incentives.’

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The report states that the same technology that is often so useful in predicting places that would be struck by floods or diagnosing hard-to-find illnesses in infants also has “the potential to eclipse longstanding civil rights protections in how personal information is used in housing, credit, employment, health, education, and the marketplace.”

The report focuses particularly on “learning algorithms” that are frequently used to determine what kind of online ad to display on someone’s computer screen, or to predict their buying habits when searching for a car or in making travel plans. Those same algorithms can create a digital picture of person, Podesta noted, that can infer race, gender, or sexual orientation, even if that is not the intent of the software.

“The final computer-generated product or decision — used for everything from predicting behavior to denying opportunity — can mask prejudices while maintaining a patina of scientific objectivity,’’ the report concludes.

Podesta said the concern — he suggested the federal government might have to update laws to reflect it — was that those software judgments could affect access to bank loans or job offers.

They “may seem like neutral factors,’’ he said, “but they aren’t so neutral” when put together. The potential problem, he added, is that “you are exacerbating inequality rather than opening up opportunity.’’

Edward W. Felten, a computer scientist at Princeton and former chief technologist of the Federal Trade Commission, said the goal would be for both the government and industry to address the risk of discrimination based on data analysis.

“There is a role for government to hold companies accountable and establish incentives,” Felten said. “There needs to be enough incentive for companies to do the hard work.”

Several major companies, including Google, Facebook, and Microsoft, declined to comment on the report. But Michael Beckerman, president of the Internet Association, whose members include Google, Facebook, Amazon and Twitter, called the report a “useful examination” of big data technology.

Now that the report has been issued, Beckerman said, the administration should “turn its attention to the most pressing privacy priorities facing American consumers” — to update the Electronic Communications Privacy Act and to “reform the government’s surveillance laws and practices.”

Other companies, including Mozilla, the maker of the Firefox Web browser, also urged the government to focus on surveillance issues, reflecting Silicon Valley’s concern that the biggest threat they face today is the suspicion around the world that the NSA has built “back doors” into US products.

Podesta, in briefing reporters Thursday, also singled out the shortcomings of the “Terms of Service” that consumers click on, almost always without reading them, when they sign up for free e-mail accounts or download apps for their smartphones. He asked whether that process “still allows us to control and protect our privacy as the data is used and reused.”

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