FTC orders consumer spy industry to turn over privacy data

By Stephen C. Webster
Tuesday, December 18, 2012 12:46 EDT
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An investigator is shocked by a discovery. Photo: Shutterstock.com, all rights reserved.
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The Federal Trade Commission (FTC) said Tuesday it is ordering so-called “data broker” companies, which act as a consumer spying apparatus on behalf of major corporations, to submit detailed information about their privacy practices as part of a study that could recommend industry-wide changes.

Nine specific companies are receiving FTC orders today: Acxiom, Corelogic, Datalogix, eBureau, ID Analytics, Intelius, Peekyou, Rapleaf and Recorded Future. Each of them earns profits by gathering as much data on consumers as possible and selling bundles of sometimes extremely personal information to the highest bidders. Such detailed information on individual consumers can help retailers figure out what consumers want before they go looking for it — like how Target ascertained that a teen was pregnant even before her father.

Despite their growing wealth, knowledge and power, the FTC said in an advisory that most Americans have no idea these companies even exist.

The agency added that its inquiries specifically focus on “the nature and sources of the consumer information the data brokers collect; how they use, maintain, and disseminate the information; and the extent to which the data brokers allow consumers to access and correct their information or to opt out of having their personal information sold.”

The FTC said earlier this year in a preliminary study (PDF) that the data broker industry should improve its transparency practices and work to give consumers more control over the data their actions online and in retail environments is used.

“[A] lack of transparency also means that even when data brokers offer consumers the ability to access their data, or provide other tools, many consumers do not know how to exercise this right,” the agency explained. “There are no current laws requiring data brokers to maintain the privacy of consumer data unless they use that data for credit, employment, insurance, housing, or other similar purposes. Data brokers also provide data to enable their customers to better market their products and services.”

The FTC added that any insights gleamed from the information will be incorporated into a report “on whether, and how, the data broker industry could improve its privacy practices.”

Photo: Shutterstock.com, all rights reserved.

Stephen C. Webster
Stephen C. Webster
Stephen C. Webster is the senior editor of Raw Story, and is based out of Austin, Texas. He previously worked as the associate editor of The Lone Star Iconoclast in Crawford, Texas, where he covered state politics and the peace movement’s resurgence at the start of the Iraq war. Webster has also contributed to publications such as True/Slant, Austin Monthly, The Dallas Business Journal, The Dallas Morning News, Fort Worth Weekly, The News Connection and others. Follow him on Twitter at @StephenCWebster.
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