Another Government-Info-Broker Inquiry Is Underway

Study Comes Amid Escalating Data-Collection Scandal

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Amid an escalating data-collection scandal within the Obama administration, the investigative arm of Congress is conducting a study of data brokers.

Sen. Jay Rockefeller, D-W.Va., commissioned the study of information resellers by the Government Accountability Office, the non-partisan research and investigative arm of Congress. The GAO confirmed the study, to be completed in late summer. The GAO is "is looking at what laws and regulations regarding the privacy of consumer information held by information resellers, and what gaps, if any, exist in this legal framework," according to Chuck Young, the GAO's managing director-public affairs.

The study will also cover "the advantages and disadvantages of key policy options that have been proposed to improve consumer data privacy," he said.

A large ad industry trade group that asked to remain anonymous was contacted in the early fall of 2012 by the GAO for the study, said people familiar with the situation. The GAO asked whether the association had members that sell information, what information they sell or rent, how they sell it and what privacy laws affect those practices.

"We talked to them about the fact that these days there isn't a company out there that isn't data-driven," said one person familiar with the GAO inquiry.

The organization was contacted by the GAO around the same time the Senate Commerce Committee, headed by Mr. Rockefeller, launched its own investigation into nine data providers and services firms: Acxiom, Datalogix, Epsilon, Equifax, Experian, Rapleaf, LexisNexis owner Reed Elsevier, Spokeo and Transunion.

The GAO declined to say which companies and organizations have beeen contacted for its current study.

The study is among a handful of initiatives by federal entities inspecting data providers. In addition to the Commerce Committee inquiry, the Federal Trade Commission in December asked nine data brokers to detail their data collection and use practices.

In 2008, the GAO published a 29-page report on government use of data from information resellers, suggesting "better protections" should be in place for such data usage. The study focused on the purchase of data by the Departments of Justice, Homeland Security and State, and the Social Security Administration "for a variety of purposes, including performing criminal investigations, locating witnesses and fugitives, researching assets held by individuals of interest, and detecting prescription drug fraud."

The four agencies planned to spend around $30 million on data from resellers in 2005, according to the study.

Concern over the federal government's data-surveillance practices -- and corporate involvement in those efforts -- reached a crescendo last week following reports by the U.K.-based Guardian newspaper detailing ongoing consumer data collection by the National Security Administration. The reports alleged Verizon shared call records on a daily basis with the NSA under a court order and implicated several of the largest digital media and advertising firms, including Google, Facebook, AOL, Apple, Microsoft and Yahoo, in providing consumer data to the NSA and Federal Bureau of Investigation as part of its Prism program; the firms denied they've been pumping data to the government as part of the alleged program.

Mr. Rockefeller resubmitted his do-not-track-online bill in February. It calls on the FTC to oversee development of a DNT mechanism, and was co-sponsored by Sen. Richard Blumenthal of Connecticut. Mr. Rockefeller announced in January he won't run for another term, and passage of the bill, originally proposed in 2011, is a goal before he leaves office after the 2014 midterm election.

The Prism scandal could thrust his bill into the spotlight or prompt additional legislation. The GAO report could be used as fodder to promote the need for more restrictions on data brokers. Typically, GAO reports are given to congressional members who request them and are made public as they see fit.

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