updated 10:55 pm EDT, Wed May 28, 2014
Commission wants more control in users' hands, regulation in industry
In a recent report put together by the Federal Trade Commission (FTC), the commission asks Congress for regulation on the practices of data collection by data brokers. While the FTC has been studying the practice of data collection for a number of years, it has yet to see action come at the government over what the companies involved are able to do with the data. One thing the FTC would like to see is some of the control over data being placed back into the hands of the people.
The 110 page report, called Data Brokers: A Call for Transparency and Accountability, details the findings from investigations on nine of the largest data collecting companies. Data collection companies largely operate in a way unknown to the generally public, often collecting information without any consent from the user. This data is then used in different applications ranging from marketing or fraud detection.
"In today's economy, Big Data is big business. Data brokers -- companies that collect consumers' personal information and resell or share that information with others -- are important participants in this Big Data economy," says the report.
However, not all uses for the collected data can be construed as good, even if the pretext they are collected under is intended to be. Often the companies that are collecting large amounts of information are building profiles on individuals based on information like race, gender and household income, raising privacy concerns over the reach of the data brokers. Collected information spreads even further in some places, including purchase history, activity on social media and even a person's political stance. This extends to both online and offline worlds.
"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."
It isn't that the data collection is being done under illegal acts, but rather the amount of information that is shared is done so with no knowledge to users. The constructed profiles can be used in a beneficial manner, in connection with certain activities, to promote an alignment of interests. However, items like health or credit data could also be used in situations that would deny consumers opportunities.
"For example, a category like 'Biker Enthusiasts' could be used to offer discounts on motorcycles to a consumer, but could also be used by an insurance provider as a sign of risky behavior," says Ramirez.
The FTC suggests that Congress put legislation in place to make the process not only more transparent, but also gives consumers access to the data collected on them. This includes giving users access to a central hub for the data, information on the inferences derived from the information collected, a requirement for data brokers to name sources, opt-out programs and adding requirements for entities to notify consumers if they share information.
Text of the full report is available at the FTC website.