FTC Asks for Data Broker Law and Central Hub for Consumer Control

Agency Releases Much-Anticipated report, Calls Industry Too Opaque

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Edith Ramirez
Edith Ramirez

The Federal Trade Commission wants companies that buy, sell and manage data for marketing to create a central online hub providing information about the data they collect and how it's used.

In a much-anticipated report on data brokers today, the agency called on Congress to establish new rules requiring data firms to be more transparent about their practices and to give consumers more control.

Even as the report recognized some benefits of marketing data use -- mainly more-tailored product pitches -- FTC Chairman Edith Ramirez said the data broker industry "suffers from a fundamental lack of transparency."

The report, called "Data Brokers: A Call for Transparency and Accountability," is the result of a study of nine data brokers that the FTC deemed representative of a cross-section of the sprawling industry.

It's not clear what form the "centralized portal" suggested by the agency would take, beyond giving consumers access to the information they collect and manage "at a reasonable level of detail" and letting them opt out of data use. "We're not specifying how this central portal ought to be created," Ms. Ramirez said during a press call on Tuesday. "We just recommend that it be done as a way of shedding light on what's taking place."

Acxiom, one of the data broker firms scrutinized closely for the report, last year introduced its own version of a consumer-facing system intended to give people more data transparency and control. AboutTheData.com provides information about the company's practices and how it categorizes people, and allows them to correct information and opt out of some data use.

Along with Acxiom, the other eight firms evaluated by the commission are CoreLogic, Datalogix, eBureau, ID Analytics, Intelius, PeekYou, Rapleaf and Recorded Future. The FTC can be expected "to continue to take a look hard at this industry," said Ms. Ramirez, noting that the "report does not identify any unlawful activity."

The FTC and legislators are concerned about the use of sensitive financial and health information, and applications of data for marketing efforts that could be considered predatory.

The agency also expressed concerns regarding the use of offline transaction data for online marketing purposes. The sector, helping brands bring their real-world data online, is growing. Indeed, Acxiom, Google and AOL have all recently purchased firms that help marketers use their offline data in the digital realm.

Sen. Jay Rockefeller (D-W. Va.) and Sen. Edward Markey (D-Mass.) introduced a bill in February giving consumers access to data held by brokers serving the marketing industry, allowing them to correct information or opt out from use of that data for marketing purposes.

The Data Broker Accountability and Transparency Act of 2014, or the DATA Act, would also prevent data companies from harvesting consumer information by "deceptive" means.

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