Brokers use ‘billions’ of data points to profile Americans
Brokers use ‘billions’ of data points to profile
Americans
By Craig Timberg, Tuesday, May 27, 8:59 AM
Data brokers that quietly gather billions of pieces of
data on Americans should be required to operate more openly, so that those
categorized as “financially challenged” or possibly suffering from serious
medical conditions have the ability to check and challenge those
characterizations, a federal report said Tuesday.
The data broker industry, which is lightly regulated,
develops profiles of hundreds of millions of people using online and offline
sources, such as magazine subscriptions, visits to Web sites, posting on social
networking services and purchase histories, the Federal Trade Commission
reported. The information sold to marketers can list race, income and
homeownership.
Categories used to label consumers include “Bible
Lifestyle,” “Smoker in Household” and “New Age/Organic Lifestyle,” the report
said. One category, called “Rural Everlasting,” describes people of retirement
age who have “low educational attainment and low net worths.”
FTC officials, who based their report on documents
gathered by issuing subpoenas to nine data brokers in December 2012, expressed
concern about how the data is collected, how it’s used and the potential for
making errors that are kept secret from the consumers themselves.
“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,” said
FTC Chairwoman Edith Ramirez. “It’s time to bring transparency and
accountability to bear on this industry on behalf of consumers, many of whom
are unaware that data brokers even exist.”
No evidence of illegal activity was described in the
report, though the FTC cited the potential for abuse when data brokers gather
information about health-related issues. Among the health data collected, the
report said, was whether a household contained an allergy sufferer or a person
concerned about weight loss or cholesterol. One category was “Diabetes
Interest.”
Stuart P. Ingis, general counsel for the Direct Marketing
Association, which represents nearly 2,000 companies that collect and
distribute consumer data, said that the FTC investigation failed to reveal
actual cases of abuse of personal information. “You’d think if there was a real
problem, they’d be able to talk about something other than potential.”
The report included several legislative proposals
intended to help Americans learn what information has been gathered about them
and to correct errors. Consumers, under the FTC proposals, also would have the
right to opt-out of data gathering about themselves. Such information is widely
used by digital advertisers to improve the targeting of their marketing
messages. Officials from that industry have long said that such advertising
pays for the free services — such as e-mail, videos and social networking —
that consumers have come to expect.
Ingis said that the FTC’s proposals, such as a
requirement for a centralized portal for consumers who want to know what
information data brokers collect, are unnecessary and cumbersome. “I’m not sure
that there’s a problem that requires a law here,” Ingis said.
But FTC Commissioner Julie Brill urged Congress to act,
and for Americans to learn more about how their data is collected and used. “We
want to provide more tools and more options for how their information is used
in the data broker ecosystem,” she said. “Consumers can’t manage this process
by themselves. It’s too big. It’s too complex. There are too many moving
parts.”
The issue of data collection has generated increasing
attention in recent years — and especially since former National Security
Agency contractor Edward Snowden revealed how information collected by the
private sector gets vacuumed up by intelligence agencies. The White House
issued a report on the collection and use of Big Data on May 1.
Yet privacy advocates see little hope of legislative
action on Capitol Hill. “There’s no political pressure on Congress, really, to
act. The data broker lobby is incredibly powerful,” said Jeffrey Chester,
executive director of the Center for Digital Democracy.
He noted that political campaigns routinely use
information collected by data brokers to tailor their election and fund-raising
messages to targeted groups. “They’re not going to vote against their political
self-interest.”
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