FTC calls for legislation to make data broker practices transparent

In a report issued yesterday – which was based on a study of nine data brokers, including Acxiom Datalogix and PeekYou – the FTC said that “data brokers operate with a fundamental lack of transparency”.

“Data brokers obtain and share vast amounts of consumer information, typically behind the scenes, without consumer knowledge,” the FTC explained. “Data brokers sell this information for marketing campaigns and fraud prevention, among other purposes. Although consumers benefit from data broker practices which, for example, help enable consumers to find and enjoy the products and services they prefer, data broker practices also raise privacy concerns.”

The FTC seemed perturbed by the amount of information collected and stored by data brokers, with one company in the study holding information on more than 1.4bn consumer transactions and 700bn data points.

“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.”

The full report, Data Brokers: A Call for Transparency and Accountability, is online here.