On May 27, 2014, the Federal Trade Commission issued a long-awaited report on the data broker industry. The report, titled “Data Brokers: A Call for Transparency and Accountability,” is the result of an eighteen-month study of certain data brokers that represent a cross-section of the industry.
The report encouraged Congress to step in to enact legislation to supposedly make the practices of data brokers more transparent and accessible to consumers. The report claimed that consumers should have greater control over the personal information that is gathered, stored, and shared by and among data brokers.
“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, and more,” FTC Chairwoman Edith Ramirez said on Tuesday. “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.”
The recommendations made in the report include requiring the creation of a centralized portal where data brokers can identify themselves, describe their information collection uses and practices, and provide links to access tools and opt-outs. The recommendations also obligate data brokers to give consumers access to their data and require opt-out tools so that consumers can control or minimize the use of their information. Perhaps one of the most significant proposals would require entities to give notice to consumers when they sell data to data brokers and would require data brokers to disclose to consumers the source of the data.
While the FTC’s report should not come as a surprise for the data broker industry, it signals an increased level of scrutiny to come in the near future.