FTC urges lawmakers to pass bill to enhance data broker transparency

150px-US-FederalTradeCommission-Seal.svgThe Federal Trade Commission called on Congress last week to enact legislation to regulate the activities of data brokers and to enhance consumer protections, following the release of a report that showed widespread opacity in the profession.

In an effort to increase understanding of the data broker industry, the FTC undertook a study of nine data brokers—professionals who obtain and share large amounts of consumer information, generally without their knowledge, for a profit. Data brokers included in the study were Acxiom, CoreLogic, Datalogix, eBureau, ID Analytics, Intelius, PeekYou, Rapleaf and Recorded Future.

The FTC said that while consumers can benefit from data broker practices, which help consumers locate and identify products and services they are interested in, certain practices within the industry raise privacy concerns.

Data brokers often collect data from online and offline resources, including social media accounts and warranty registrations, as well as magazine subscriptions and religious affiliations.

According to the report, the purposes for which data is collected and used pose risks to consumers. Data is sometimes stored indefinitely, which creates security risks, and when consumers are offered choices about their data, their choices are often incomplete.

The FTC recommended that Congress develop a centralized portal to serve as a type of data broker index, where brokers would be required to provide consumers access to their data “at a reasonable level of detail.”

Additionally, the FTC urged lawmakers to require brokers to disclose their data sources, allow consumers to submit corrected information, notify consumers when information is shared and to obtain consent from consumers before collecting and sharing information.

“While data brokers provide important benefits to consumers, and some data brokers have taken steps to improve their privacy practices, overall transparency in this industry continues to be lacking,” the FTC said in its report. “And with the emergence of new sources of information, improvements in analytics methods and the availability of more granular information about individual consumers, the need for consumer protections in this area has never been greater.”

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