July 26, 2012
Data Brokers Under the Magnifying Glass Of Congress
Enid Burns for redOrbit.com — Your Universe Online
A common theme in the dark science fiction genre of cyberpunk revolved around the sale of data - often through illicit means. This dark future, which saw console cowboys hawking their trade in oftentimes stolen data, may not come to fruition as eight members of Congress have opened a sweeping investigation in data brokers.
Data companies collect offline, online and mobile data tracking consumer habits and preferences including financial, retail and recreational activities. Marketers from various industries then buy the data to match it up and target consumers. Data company clients include airlines, automakers, banks, credit card issuers, retailers and other service and consumer packaged goods companies attempting to better target consumers with advertising and marketing.
Letters were sent to Acxiom, Epsilon (Alliance Data Systems), Equifax, Experian, Harte-Hanks, Intelius, Fair Isaac, Merkle and Meredith Corp.
Lawmakers asked the data brokers listed in the inquiry to provide key points of information. The committee wants a list of all entities that have provided data from or about consumers to the company. The letter also asked for a list of data items collected from or about consumers, and the methods by which data are collected. It also asked for information about products or services offered to third parties that utilize consumer data, as well as details on encryption or other safety protocols used to protect data. Lastly, the committee asked what information consumers are given access to, if it is requested, and any policies around sharing or deletion of data. Each point the letter queries are further broken down. The letter asks for details on how social media is used to collect data on consumers.
Data is a largely unregulated industry, says an article in the New York Times. The companies that sell data to third parties have little to no contact with consumers. This means consumers are unaware of how much data is collected and then used to market to them, if they are aware at all. Consumers also are unable to opt out of such practices.
Companies collecting and selling data are big business. An AdWeek article calls it a multibillion dollar business that's often invisible to consumers. While the companies might be invisible to consumers, consumers are very visible to the data mining companies. Letters to each of the companies point out that data brokers essentially compile "hidden dossiers on almost every U.S. consumer." The letters point out the degree to which the committee is concerned. "This large scale aggregation of the personal information of hundreds of millions of American citizens raises a number of serious privacy concerns," the letter says.
Copies of each of the nine letters to companies were posted on the Congressman Ed Markey's website.