Data mining has moved rapidly from research laboratories to commercial implementations, and this makes it very important to examine its implications. Data mining is likely to change substantially the functioning of some markets, the internal organisation and practices of many firms, and the relationships of firms with their customers. Probably the most obvious effect of data-mining techniques will be to increase market segmentation. Data mining will almost certainly increase targeted marketing, because it can identify and characterise market segments with specific characteristics. The customer profiling that data mining makes possible raises serious issues of privacy of a new sort.
Data mining has the potential to ferret out personal details.
For example, purchasing records for food, medicine, and entertainment could be used to infer illnesses or participation in risky behaviour and on that basis to deny insurance or credit, where direct questions on such issues might be prohibited by law. Consumers are also likely to become the target of increasingly sophisticated marketing campaigns. While this may have advantages for both companies and consumers, it may be viewed as unfair. For example, a popular US catalogue selling women's clothing was distributed with different prices for different market segments. This might reflect sound economic logic, but it violated consumers' notions of fairness.