Privacy & Security Matters Mintz Levin : Data Compliance & Security, Employee Privacy Lawyer & Attorney

Data Brokers Under Scrutiny

Posted in Legislation, Privacy Regulation

The Senate Commerce Committee released this morning its majority staff report, A Review of the Data Broker Industry: Collection, Use, and Sale of Consumer Data for Marketing Purposes, on the practices data brokers use to collect and sell personal information of consumers and how those practices affect the privacy of hundreds of millions of Americans.  The Committee held a hearing on the substance of the report this afternoon.

The Committee, chaired by Senator John D. Rockefeller IV, examined  representatives of the Federal Trade Commission, the data brokering industry and privacy advocates on the industry practices itemized in the staff report.  The staff report and a report published by the Government Accountability Office earlier this year, Information Resellers:  Consumer Privacy Framework Needs to Reflect Changes in the Technology and Marketplace, both highlight the absence of any general federal statute that gives consumers the right to know what information is collected and shared about them and for what purposes.

The Committee staff report finds data brokers collect massive amounts of detailed health, financial, political and consumption information on hundreds of millions of consumers, and use this information to assemble packages of contact information for consumers that fit specific profiles, which are then sold to advertisers.  The growth of this industry is illustrated by the fact that one data broker reported to the staff that it has multi-sourced data on more than 700 million individuals worldwide.  Another reported that its database includes almost every U.S. household, while a third claimed that it has data points for more than 80% of all U.S. consumer email addresses.

During the Senate hearing this afternoon, Senator Rockefeller stated that the staff investigation is continuing.  He said that the Committee he is putting several of the largest data brokers “on notice” that the Committee intends pursue answers to its questions about their practices, implying that he would use the Committee’s subpoena power if necessary.