Saturday :: Dec 24, 2005

What Legal Exposure Does A Company Face From Data Mining?

by Steve

Still looking for that perfect Christmas gift for the CEOs of our major telecommunications companies, after years of rising rates and mergers?

When I read the NYT story late last night that revealed the NSA has been gathering data on each of us from our emails and telephone calls for the last four years, I wasn’t surprised. The recent revelations of NSA warrant less wiretapping and other eavesdropping, absent probable cause or any due process, removed any doubt for me that the Bush Administration has established a police state of sorts without having to justify it or face any consequences from the American public. We can deal with the Bush Administration politically on this in 2006 and make them sweat about whether what they have done supposedly in the name of national security in a now terror threat alert-free world since November 2004 is really about fighting terrorism, or is really about something sinister.

But what about the companies themselves? Quite simply, in the pages and pages of privacy practices that your phone, email, and cell phone company have sent you over the last several years, all in an effort to convince you that your data will not be given out to anyone, does it mention anywhere that the company reserves the right to share data files on you with the federal government without a court order, a legal requirement to do so, due process, or probable cause? Mine don't.

The NYT piece states that the companies that provide us our everyday telephone, cell phone, and email services have been gathering information on us and giving it to the government in large files that don’t distinguish between everyday people and those who are potential threats to the country. It is the ultimate guilt-by-association scenario.

What it also means is that files may be started on innocent people in this country for no other reason that there phone call or email appeared in a batch of data or files that piqued the interest of the government because of others also in that file, again without any probable cause, or any notice to the customer or the approval of that customer. And that is where this can get really messy for Corporate America.

It isn’t hard to see why so many telephone, cable, and cellular mergers and acquisitions have been approved by the Bush Administration these last five years. Sure, this administration’s total lack of concern for the antitrust and consumer choice implications arising from these consolidations and mergers was already evident, but in an ultimate “you scratch my back, and I’ll scratch your back” game, BushCo gets the active support of the telecommunications industry for turning over vast data collected on customers by the companies themselves, rather than the government and escaping some blame from outraged citizens.

And what do the companies get out of it? Well, they get their mergers and takeovers approved quickly and with nary a concern for the consumers from the federal government, which pleases the stockholders, board members, and company executives as their share prices and buyout packages increase accordingly while donating heavily to the GOP all the time.

It sure is easier for the Administration to get what it wants by pursuing policies that shrink the pool of data mining sources to fewer and larger telecommunications companies that can be dealt with and bought off with more and more favors, than it would be to have to deal with a larger playing field of smaller and more competitive companies, some of which may not be as willing to do the government’s bidding.

There is a political avenue to follow for dealing with the Bush Administration here. Aside from the Bush Administration however, what about the corporations themselves? Doesn’t the revelation that these corporations have been giving their customer information to the federal government place them in legal jeopardy, in the absence of a federal law that requires them to gather these files and turn them over to the feds? Remember, they have been accumulating this data and giving it to the feds; the NYT story makes no mention of court orders or laws requiring them to do this. So they have been voluntarily doing this as a way of saying "we’re a good corporate citizen, and oh by the way, thanks for approving our recent merger/takeover; here’s our latest campaign contribution."

As I said earlier, we have all been flooded with numerous pieces of mail from our creditors, the phone company, the cable company, the cell phone company about their privacy practices. Tell me, do any of these policies they have been sending us state clearly that the company reserves the right to gather data on us and give it to the federal government without telling us, without probable cause, and without telling us under what directive or authority to do so? Gee, I don’t think I’ve read that anywhere in my Notice of Privacy Practices from SBC, Verizon, or Comcast.

So what kind of legal exposure do these companies now face from class action lawsuits?

Steve :: 9:02 AM :: Comments (30) :: TrackBack (4) :: Digg It!