X+1, a digital marketing business based in Connecticut, is on the front lines of the amazing and possibly disturbing data analysis advance of combining web browsing data with demographic data to profile potential customers of online businesses. The idea of targeting products to specific customers on the web is nothing new, but x+1 takes it quite a bit farther. For example, suppose you go to the Capital One website to check out credit card rates. Capital One has employed x+1 to analyze those who visit the Capital One website. X+1 does its magic, reviews all your past web history on your computer and is able to determine your zip code and then tap into standard Nielsen demographic data. It combines all this data to decide what credit card rate Capitol One’s site will show you. If x+1 determined that you are living in a Boulder neighborhood filled with students Capital One would then show you credit card rates geared toward students. It doesn’t prevent you from finding their other rates on their site, but it can lead you to believe that this is the rate that is being offered to anyone who browses the site. And what if you aren’t a student despite living in an area determined to be filled with students, would you want to get an offer based on a stereotype? What if you lived in a neighborhood where credit ratings are generally low but you have a high credit rating—would you want to be offered high interest rates based on where you live rather than your credit history?
This takes us back to long-standing concerns about discrimination in any realm—is it ethical to limit offerings to customers based on generalized information or snap judgments made by appearance, web browsing history, etc. Price discrimination is legal except when based on race, gender or geography. X+1’s combination of demographic and web browsing data analysis puts it in a gray area of ethics—should customer potential be based on generalizations? If it steps into the realm of perceived discrimination, could this be proven?
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