Earlier this week, the U.S. Federal Trade Commission (FTC) issued a report on the data broker industry, a report showing a lack of transparency in the industry as well as a lack of accountability to consumers.
According to the 110-page Data Brokers: A Call for Transparency and Accountability (PDF) (I only read the 10-page Executive Summary) report, nine data brokers were studied. And the news for consumers was not good.
The extent of consumer profiling today means that data brokers often know as much—or even more—about us than our family and friends, including our online and in-store purchases, our political and religious affiliations, our income and socioeconomic status, and more.
FTC Chairwoman Edith Ramirez
Yikes!
The FTC recommended Congress enact legislation to make data brokers’ practices more transparent and provide consumers with greater control over their information.
As I read the summary, I was surprised to learn:
- One data broker has information on more than 1.4 billion consumer transactions and 700 billion data elements
- Only two of the data brokers allow consumers to correct their personal information for marketing purposes
- Data brokers obtain most of their data from other data brokers rather than directly from an original source
- One of the data brokers has 3000 data segments for nearly every U.S. consumer (makes me concerned about my privacy)
- Data brokers infer consumer interests from the collected data. Consumers may be placed in categories, such as “Urban Scramble” or “Mobile Mixers” or “Dog Lovers”.
- Some data brokers maintain information indefinitely, which may create security risks
It surprised me to learn the breadth of the information gathered by the big data companies, and how the data is combined to create comprehensive profiles that could be sold to marketing firms.
The lack of regulations astounded me.
I was impressed with the FTC’s clear and thoughtful recommendations for Congress to pass legislation for consumers to manage access, opt-outs, sensitive data, and requirements for data brokers to access and correct information, as appropriate.
Now, if we can get Congress to act on the FTC’s recommendations.
