Responding to the Inevitable Outcomes of Profiling: Recent Lessons from Consumer Financial Markets, and Beyond

Abstract

Data profiling practices in today’s information age take many shapes and have many faces. They generate both public intrigue and concern, which in many cases make their way to the media and from there to relevant regulators. These latter entities, in turn, struggle in search of a proper regulatory response to the complicated issues set before them. Profiling presents a policy challenge which is indeed frequently invoked and discussed. However, both the harms it presents and the way in which they should be resolved are extremely difficult to conceptualize. The challenge of regulators and scholars grappling with these issues is three-fold: they (a) must generate a helpful taxonomy for understanding and addressing the various practices and their potential problems. They must also (b) establish which issues could be resolved by internal and external market pressures, as well as indirect regulatory pressures, and which require direct regulatory scrutiny and intervention. Finally, and most importantly, they must (c) formulate (or recommend) regulatory responses at the distinct junctures they deem necessary. In this short chapter I attempt to draw out a brief strategic response to these questions, while relying on previous work. My analysis will focus on the first two elements, while providing merely initial intuitions towards overall solutions. In doing so, I will strive to account for the technological, market and legal developments of the most recent years.