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ACCA Strategic Professional · Strategic Business Leader · Big data and data analytics

Harbor Retail plc collects customer purchase histories through its loyalty app. The marketing director proposes using the data to build a model predicting which customers are pregnant and sending targeted offers, without telling customers. Which ethical concern is MOST directly raised by this proposal?

The main concern is using personal data for an undisclosed purpose. Customers have not been told or consented to sensitive inferences being drawn about them, so the proposal breaches transparency, fair processing and purpose limitation principles, creating ethical and reputational risk for the company.

  1. AUse of personal data for a purpose customers have not been informed of or agreed to, breaching transparency and fair processingCorrect
  2. BData volume exceeding the storage capacity of the existing data warehouse
  3. CPoor velocity of data processing in the loyalty app
  4. DLack of variety in the data sources used to train the model

Explanation

The key issue is that inferring sensitive personal circumstances and using data for an undisclosed purpose breaches transparency, purpose limitation and trust. The other options are technical characteristics of big data and do not address the ethical problem.

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