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Senate Committee Looks To Regulate Private Data Collection Firms

Senate Committee Looks To Regulate Private Data Collection Firms
December 20, 2013

A new report released by the Senate Commerce Committee highlighted privacy protection concerns regarding the unregulated methods private data collection companies use to obtain the public's information, Time magazine reported.

Many consumers may not be aware of how the data collection process works or why firms collect their data. However, a recent report, "A Review of the Data Broker Industry: Collection, Use, and Sale of Consumer Data for Marketing Purposes," from the senate committee has  started to shine a light on these companies' methods. Typically a data brokerage firm will collect personal data from people through social media and online purchasing history, and then sell the personal information to marketers. Sen. Jay Rockefeller, D-W.Va., who initiated a similar report last year, said in a statement on Dec. 18 the data brokerage business is a very viable one and using public information is a key reason why.

"In 2012, the data broker industry generated $156 billion in revenues," Rockefeller said. "That's more than twice the size of the entire intelligence budget of the United States Government - all generated by the effort to learn about, and sell, the details about our private lives."

Updating Privacy Laws
The report went on to say the advances in the Internet over the past few years have now made it even easier to acquire personal information for marketing purposes. The report said even the smallest bit of information could be tracked such as what type of food products consumers buy and even how much they travel in a given amount of time. The Senate Commerce Committee said that many of the current privacy protection laws that are in effect are slightly outdated and are not doing enough to help protect personal information.

"There is no one comprehensive privacy law governing information collection and sale of consumer data by private sector companies and … existing privacy laws have 'limited scope' regarding the collection, use and sale of consumer data for marketing purposes," the report stated.

Regulating The Data Brokerage Business
Many of these data firms offer privacy protection for their customers and education about such matters, but it is at the company's discretion and is not heavily enforced. The senate committee said it is disappointed that this industry is not doing more to help out its customers.

The report also highlighted three specific companies – Acxiom, Experian and Epsilon – that have not divulged information to the committee. The Federal Trade Commission will be assisting the committee in helping regulate privacy protection laws and Sen. Rockefeller said these three companies will be closely monitored.

"I am putting these three companies on notice today that I am not satisfied with their responses and am considering further steps I can take to get this information," Rockefeller.

Walter Boyd is senior privacy advisor at CyberScout Consulting.

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