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Ethical Data Sourcing - The Next Trend

Updated: Feb 8, 2022

Ethical Data Sourcing

The data ecosystem is broken. Companies are addicted to collecting user data; however, users are becoming conscious about protecting their privacy and are hesitant to share their personal information. This disconnect between companies and customers is forcing companies to rethink how they use customer data and consider new ethical data sourcing practices.

The Basics – Data belongs to Users:

Data about users belong to users - it’s as simple as that. The user should have the right to choose who can access their data, when they want to give companies access to their data, and revoke access whenever they would like. This is especially true considering organizations who collect data use the information to increase their profits.

Users owning their data is a foundational principle that needs to be established so that companies can establish who has the final say on what they can do with user data. Establishing that the user owns the data means that companies must abide by the user's wishes and ask for their consent.

Ethically sourcing data:

Ethical data sourcing is a process in which the organizations meet regulatory requirements, use the data for specific outlined purposes, enable users to own their data, and fairly compensate the user for the data that they collect. While ethics vary between companies and geographies, the following basics can be established:

Meeting regulatory requirements: As governments are seeking to protect users, new laws are being introduced that force companies to follow certain procedures when handling user data. The most famous of which is GDPR, where in 2017 the European Union introduced regulation that governs the hosting, usage, and ownership of data. Meeting such local regulations is a bare minimum for ethical data sourcing. However, the regulation does not go far enough as up to 73% of American adults incorrectly believe that the existence of a privacy policy means a website cannot share its data with other parties without their permission (Wharton).

Using data for intended purposes: users are often willing to share their personal data if they know exactly what is being used for, trust the organization collecting data, and understand how the data they share aligns directly with the services they receive. For example, users have been willing to share personal information with banks to conduct a credit score check. In this example users trust banks, understand the purpose for data collection, and are willing to share their data on the grounds that the data will not be abused. Similarly, organizations should make it clear to users how they will be using their customer data (marketing, risk assessment, etc.) and operating accordingly.

Enable users to own their data: Abusing customer data often happens when organizations believe they own the data they collect. With this mentality, they fail to consider the sentiments of their customers while they collect and use the data. Ethical data sourcing enables the user to understand their data is being shared, can see what data the organization has, and can revoke access to the data as they please based on contest flags. While this is a difficult and consuming task it builds trust and transparency with customers.

Compensate users: Data belongs to users, and when profits are generated as a direct result of their data, users should receive their fair share as a data dividend. This is especially true for data brokers who sell user data, and advertisers who exchange user data for hyper-targeted ads. Fair compensation is a new idea, and not widely practiced, but the emergence of new platforms is enabling such practices to occur.

Final Thoughts:

According to Pew Research Centre, only 9% of users/customers believe they have “a lot of control” over the data that is collected about them, however, 74%, say it is very important to them to be in control of who can get that information. This means organizations have a lot to achieve by providing customers control of their data. It is a great way to build trust with customers.

To learn more about ethical data sourcing and how to compensate users visit

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