FTC targets data collectors

Published 12:00 am Wednesday, May 28, 2014

Data brokers that collect, analyze and sell huge amounts of information on the activities of consumers for marketing purposes operate with “a fundamental lack of transparency,” the Federal Trade Commission said in a report Tuesday.

The report is the result of a lengthy investigation of the data-broker industry, and it recommends that Congress enact legislation that requires the companies to disclose more information about themselves and the data they collect.

The legislation, the FTC recommends, should give consumers access to the information collected about them by data brokers, allow consumers to suppress information and inform consumers what inferences are being made about them.

The FTC report adds momentum to the push in Washington to put new curbs on how information collected about people is used by companies. In May, the White House issued its own report that focused largely on how companies gather and use vast stores of data online about individuals, and that those practices could be used to discriminate against certain racial, ethnic or socioeconomic groups.

In February, after a Senate investigation of the data-broker industry, two Democrats introduced a bill that would require data brokers to disclose more information about their practices and to give consumers more control over their information collected and sold by the companies.

“The extent of consumer profiling today means that data brokers often know as much — or even more — about us than our family and friends, including our online and in-store purchases, our political and religious affiliations, our income and socioeconomic status,” Edith Ramirez, the FTC chairwoman, said in a statement. “It’s time to bring transparency and accountability to bear on this industry on behalf of consumers, many of whom are unaware that data brokers even exist.”

Privacy advocates said the FTC could have gone further in its recommendations. Marc Rotenberg, executive director of the Electronic Privacy Information Center, said the agency’s report placed too much responsibility on individual consumers to monitor the activities of data brokers.

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