Laws and Ethics Can’t Keep Pace with Technology

[Commentary] Employers can get into legal trouble if they ask interviewees about their religion, sexual preference, or political affiliation. Yet they can use social media to filter out job applicants based on their beliefs, looks, and habits.

Laws forbid lenders from discriminating on the basis of race, gender, and sexuality. Yet they can refuse to give a loan to people whose Facebook friends have bad payment histories, if their work histories on LinkedIn don’t match their bios on Facebook, or if a computer algorithm judges them to be socially undesirable. These regulatory gaps exist because laws have not kept up with advances in technology.

The gaps are getting wider as technology advances ever more rapidly. And it’s not just in employment and lending -- the same is happening in every domain that technology touches. There is a public outcry today -- as there should be -- about National Security Agency surveillance, but the breadth of that surveillance pales in comparison to the data that Google, Apple, Facebook, and legions of app developers are collecting. Our smartphones track our movements and habits. Our Web searches reveal our thoughts. With the wearable devices and medical sensors that are being connected to our smartphones, information about our physiology and health is also coming into the public domain. Where do we draw the line on what is legal -- and ethical?

[Wadhwa is a fellow at Arthur & Toni Rembe Rock Center for Corporate Governance, Stanford University]