FTC report examines data brokers

May 27, 2014

In today’s economy, Big Data is big business. And data brokers — companies that collect consumers’ personal information and resell or share that information with others — play a key role.

Today, the Federal Trade Commission released a study of nine data brokers. These data brokers collect personal information about consumers from a wide range of sources — including public records, loyalty cards, websites and social media — and provide information for a wide range of purposes — including verifying someone’s identity, marketing products and detecting fraud.

What did the FTC learn about the data broker industry?

  • Data brokers collect consumer data from numerous sources, largely without consumers’ knowledge. Some of the information data brokers collect, like bankruptcy information, voting history, consumer purchase data, web browsing activities and warranty registrations are not obtained directly from consumers, and as a result, consumers are largely unaware that data brokers are collecting and using this information.
  • Data brokers collect and store billions of data elements, including some on nearly every U.S. consumer. Data brokers hold a vast array of information on individual consumers. For example, one of the nine data brokers has 3,000 data segments for nearly every U.S. consumer.
  • Data brokers combine and analyze data about consumers to make potentially sensitive inferences. Data brokers infer consumer interests from the data they collect. Then, they use those interests to make inferences about consumers and place them in categories. Potentially sensitive categories include those that primarily focus on ethnicity and income-levels, a consumer’s age, or health-related conditions like “Expectant Parent,” “Diabetes Interest,” and “Cholesterol Focus.”

If you want to learn more, including the types of products offered by data brokers, the benefits and risks, and the FTC’s recommendations to Congress, read the FTC’s report. You also can join the FTC Twitter chat Wednesday, May 28, at 2pm EDT to discuss the report. Follow @FTC and tweet questions with #BigData to join the conversation.

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