Investigating Data Brokerage Firms

by Matt Klassen on December 20, 2012

They’re the sleazeballs of the technology industry; data brokerage companies whose sole purpose in life is to collect your personal information and sell it to the highest bidder. In fact, for years now I’m sure most of us have been plagued by their data mining practices, often times finding ourselves magically included on yet another poorly targeted mailing list for some product or service we seem to never need.

While data brokerage firms have always been annoying, there’s little evidence to suggest that they’re doing anything illegal, but that’s only because there’s little evidence on the industry as a whole. Now in this era of privacy protection, people are finally starting to ask questions about how data is collected and stored and who ultimately owns the rights to your personal data.

To that end, the U.S. Federal Trade Commission announced earlier this week that it has launched a fact finding probe into the practices of data brokerage firms, again not because there is suspicion of an illegal activity, but for the simple fact that the FTC really has no idea how the industry operates.

The FTC has focused on nine data brokerage firms in particular: Acxiom, Corelogic, Datalogix, eBureau, ID Analytics, Intelius, Peekyou, Rapleaf and Recorded Future. These companies make a living by collecting your private information, often times through nebulous channels, making that information available to anyone…for a fee.

The impetus for the FTC probe has been a lack of ‘transparency’ from the data mining industry in general, not terribly surprising given my suspicion that often times such information collection and dissemination isn’t always aboveboard.

However, the FTC has been careful to avoid such threatening language regarding any potential illegalities. “We don’t have any suspicions,” Tiffany George, an attorney in the FTC’s division of privacy and identity protection, said in a statement. “We are merely collecting information so that we can do a study.”

The FTC is seeking information regarding the nature and sources of the consumer information these firms collect, wanting details about they use, maintain, and share the information. Further, in this age of privacy protection, the FTC wants to know what extent brokers allows consumers to access and correct their personal data, or opt-out of having that information sold altogether.

As we’ve seen in many of the privacy controversies over the past several, the problem in this era of rapid technological change is that many industries like data mining are relatively unregulated, given that policy-making often lags woefully behind technological advancement. So while data mining companies may not be technically doing anything illegal, it’s only because there are few rules in place for these brokerage firms to break.

In the end, it’s hard to do anything illegal when there’s no legal standard to compare it against, and that’s what the FTC is trying to find out. If the FTC finds things they don’t like we could finally see enforcement actions taken to deter some of the broker’s more controversial or opaque practices.

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Written by: Matt Klassen. Follow by: RSS, Twitter, Facebook, or YouTube.

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