American Society of Magazine Editors

FTC Calls for Legislation in Data Broker Report

On May 27th, the Federal Trade Commission (FTC) issued a report detailing the findings of its year and a half long investigation of the data broker industry.  The report, “Data Brokers: A Call for Transparency and Accountability” follows similar reports previously released by the Senate Committee on Commerce and Government Accountability Office.  

The backbone of the report is information gathered from nine data brokers who received subpoenas for information from the Commission in December of 2012.   The report defines a data broker broadly as a company whose primary business is collecting personal information from a variety of sources and aggregating, analyzing, sharing, and selling it, and uses the term in a way that recognizes the important distinction between those that collect data and have a relationship with consumers, and those that do not.

The Commission’s broad findings are not particularly surprising: data brokers gather and merge online and offline data, share data among themselves, and use the data to make inferences about consumers.  The most significant finding, which drives the subsequent recommendations, is the Commission’s determination that consumers have little access or control over their information once data brokers obtain it; this concern is heightened because data brokers are not consumer-facing entities.  As such, the Commission recommends that Congress pass legislation regulating the data broker industry which will provide consumers greater transparency, more control over the collection and sharing of their data, and increase the visibility of data brokers’ practices. Though not intended to cover magazine publishers, any form of “data broker” legislation could have a broad impact on any industry that collects even the smallest amount of user data.