Earlier this year Experian was reprimanded by the Information Commissioner’s Office following a two-year investigation into the company’s handling and use of personal data.

The action taken by ICO was part of a broader look at the data handling practices of several companies in the data broking sector. Referring to the investigation, UK Information Commissioner Elizabeth Denham said: 

“The data broking sector is a complex ecosystem where information appears to be traded widely, without consideration for transparency, giving millions of adults in the UK little or no choice or control over their personal data. The lack of transparency and lack of lawful bases combined with the intrusive nature of the profiling has resulted in a serious breach of individuals’ information rights.” 

However, just one month prior to the ICO’s ruling, Experian announced the appointment of a PR agency to help build its reputation as a trusted data business and a leader in using data for good. The timing is as unfortunate as the mountain of negative press coverage covering the ICO’s ruling.

Just as investors and customers are more likely to gravitate towards brands with strong CSR programmes, there is a rapidly growing benefit to businesses that take their corporate digital responsibility seriously. It makes sense then, that Experian should want to invest in PR to promote their data trustworthiness. 

But as the importance of corporate digital responsibility grows, so too grows a reputational risk to businesses that are caught out on the wrong side of data ethics practices. For organisations that publicly talk the talk of data ethics, but perhaps lack the internal governance and processes to support their claims, the fall could be a heavy one.

A warning from the very recent past

In 2015, Volkswagen was caught operating a sophisticated scheme to cheat vehicle emissions tests. ‘Emissionsgate’ involved a ‘defeat device’ which made VW’s vehicles appear more environmentally friendly than they really were. 

The financial and reputational repercussions of the scandal for VW were off the scale. Its share price dropped 30%, and as of 2020 it is estimated that the cost of financial settlements, fines and buyback costs are in the region of $30 billion, not to mention the loss of new and existing customers. Now imagine a world where the misuse of personal data by an organisation proves to be equally as damaging. 

Just as the growing public awareness of climate change through the early 2000s compounded the anger the public felt towards Volkswagen, the same could be said for growing public concern around the misuse of personal data.  

Senior leadership teams in today’s data-rich companies (almost every company these days) might want to consider the fate of the VW executives who faced criminal action over their involvement in the emissions scandal. The Open Data Institute, a long time client of ours, recently released a podcast entitled “Why poor data governance could be a director’s undoing” – it’s worth a listen.

Will Experian suffer because of the ICO’s ruling? Its share price dropping significantly immediately following the announcement would indicate so. However, if this were to happen in 5 or 10 years from now, when data ethics will almost certainly have even greater impact on corporate reputation, might the question be: Will Experian survive this? Either way, life for Experian’s new PR agency will have become a little more difficult.

Organisations doing the right thing

As an agency, we’re fortunate (though also by design) to have clients that have data ethics and governance at the heart of their operations. Working with the Open Data Institute (ODI) over the past eight years has been an education for us in what ethical and trustworthy data practices truly look like. Likewise for The Alan Turing Institute, another of our clients, who have helped to broaden our expertise in ethical applications of artificial intelligence (AI) and machine learning.

We help these organisations, and others, communicate how their work in data and AI can make a positive difference to society. When working with clients who already walk the walk of tech ethics, helping them demonstrate their trustworthiness and build their reputation makes our job all the easier, and ultimately more rewarding.

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