A Review of the Data Broker Industry: Collection, Use, and Sale of Consumer Data for Marketing Purposes

by Sabrina I. Pacifici on December 22, 2013

“Consumers are conducting more and more of their daily business online and through their mobile devices. They use the Internet and their smart phones and tablets to make purchases, research medical conditions, plan vacations, interact with friends and relatives, do their jobs, map travel routes, and otherwise pursue their interests. With these activities, consumers are creating a voluminous and unprecedented trail of data regarding who they are, where they live, and what they own. At the same time, the Internet and other technological advances have made consumer data easier to access, analyze, and share. Information that in years past was accessible only through a trip to the library or courthouse can now be readily available to millions online, as computing capabilities for storing and reviewing information continue to grow at exponential rates. These changes have fueled the growth of a multi-billion dollar industry that largely operates hidden from consumer view. Today, a wide range of companies known as “data brokers” collect and maintain data on hundreds of millions of consumers, which they analyze, package, and sell generally without consumer permission or input. Since consumers generally
do not directly interact with data brokers, they have no means of knowing the extent and nature of information that data brokers collect about them and share with others for their own financial
gain.  Data brokers collect and sell information for a variety of purposes including for fraud prevention, credit risk assessment, and marketing. Their customer base encompasses virtually all  major industry sectors in the country in addition to many individual small businesses. Some of  the most well-known products sold by data brokers are credit reports that businesses use to make eligibility determinations for, among other things, credit, insurance, and employment – activities where consumers have detailed statutory consumer protections regarding the accuracy and sale of their information. This Committee Majority staff report [Senate Commerce Committee - Office of Oversight and Investigations - released on December 18, 2013] focuses on data broker activities that are subject to  far less statutory consumer protection: the collection and sale of consumer data specifically for marketing purposes. In this arena, data brokers operate with minimal transparency.”

  • See also Inside the Web’s $156 Billion Invisible Industry: “Data brokers, the companies that track our every move and then sell private details about our personalities to businesses, have become a $156 billion industry—that’s more than half of the entire internet ecosystem—and it’s almost completely invisible. No one really knows how the data miners are collecting the mass of information they have on consumers, how much they know, or who’s buying it. That’s a lot of money and intel swirling around “behind a veil of secrecy,” as a new government report put it.” [Andrew Young]

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