On June 2, 2014, U.S. Federal Trade Commission member Julie Brill, speaking at the European Data Protection Supervisor’s workshop on privacy, consumer protection and competition in Brussels, said that companies’ privacy protection regimes focused on limiting or stopping harmful uses of data overlook the potential damage to consumers’ privacy through the incremental accumulation of small pieces of data.

During her speech, Ms. Brill expanded upon the FTC’s recently released examination of data brokers.  Ms. Brill said use- and risk-based regulatory approaches are important and necessary, but are not sufficient to protect privacy because they don’t cover the small data — much of it from interactions that consumers have with online retailers, social media sites and apps — that flow, out of context of the original interaction, into the “rivers of big data.”

The FTC report, issued last week, detailed the findings of an 18-month study on data brokers, which are companies that collect consumers’ personal information and resell or share that information, but do not directly interact with consumers.

After reviewing the practices of a half-dozen data brokers, the FTC stated its belief that data brokers in general operate with a “fundamental lack of transparency,” and the FTC pushed Congress to intervene.

Ms. Brill’s comments, as well as the FTC report, are clear indications that the FTC is focused on the activities of data brokers and the effect of “big data.”  Troutman Sanders LLP will continue to monitor these developments and any subsequent regulatory or legislative guidance that may issue.