recommended reading

FTC Lifts the Veil on Companies That Sell Your Data

A cell phone displays information during a Federal Trade Commission mobile tracking demonstration.

A cell phone displays information during a Federal Trade Commission mobile tracking demonstration. // Carolyn Kaster/AP

Do data brokers know more about you than your own mother?

The Federal Trade Commission Congress thinks they might, and the agency released a report Tuesday urging Congress to push for more transparency and accountability for the companies that harvest and sell consumer information.

"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," said FTC Chairwoman Edith Ramirez in a statement Tuesday.

Data brokers are companies that aggregate information from a vast range of online and off-line sources, such as social media and retailers, to compile and sell consumer profiles to marketers and others for various purposes, from personally tailored advertisements to fraud prevention.

The FTC research found that data brokers are collecting troves of personal information about "nearly every U.S. consumer," largely with a "fundamental lack of transparency," and that the information could be used in ways that are damaging to consumers.

Among the federal agency's recommendations is the creation of a "centralized portal," a one-stop shop for consumers to access information about data brokers' data-collection practices, as well as tools to access their data profiles.

The FTC's investigation into nine of the major data-broker companies, launched in 2012, found that these companies are analyzing billions of data points to make inferences about customers, from the benign, like "Dog Owner," to the potentially damaging categories that highlight sensitive health, age, or socioeconomic information, according to the report.

The risk is that companies could use this data to target vulnerable customers or offer varying prices. For example, someone identified as a "Diabetes Interest" could receive ads for sugar-free products, but an insurance company could use that same data to classify such a person as high-risk, according to Ramirez. 

"Does it mean many among us will be cut off from being offered the same goods and services, at the same prices, as our neighbors?" Ramirez asked in a statement Tuesday. "Will these classifications mean that some consumers will only be shown advertisements for subprime loans while others will see ads for credit cards?"

The data-brokerage industry dates back to mail-order catalogs in the 1950s, but the industry has transformed in the digital age. As consumers' conduct more and more of their lives online, data brokers have an unprecedented amount of information at their fingertips, along with the powerful technology to analyze this information and piece it together like never before.

With the exception of a few industry-specific rules to safeguard sensitive financial data, health data, and data about children, the industry is unregulated. That is why the FTC is calling on Congress to enact legislation that would increase transparency in the industry and give consumers more control over the data collected about them.

The FTC's report follows another on the data-broker industry released earlier this year by Sen. Jay Rockefeller, which raised similar concerns about the secrecy of the industry and the risks it poses to consumers. Rockefeller also introduced legislation, with Sen. Edward Markey, that would enact transparency requirements on data brokers and allow consumers to correct their information.

Threatwatch Alert

Thousands of cyber attacks occur each day

See the latest threats


Close [ x ] More from Nextgov

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Modernizing IT for Mission Success

    Surveying Federal and Defense Leaders on Priorities and Challenges at the Tactical Edge

  • Communicating Innovation in Federal Government

    Federal Government spending on ‘obsolete technology’ continues to increase. Supporting the twin pillars of improved digital service delivery for citizens on the one hand, and the increasingly optimized and flexible working practices for federal employees on the other, are neither easy nor inexpensive tasks. This whitepaper explores how federal agencies can leverage the value of existing agency technology assets while offering IT leaders the ability to implement the kind of employee productivity, citizen service improvements and security demanded by federal oversight.

  • Effective Ransomware Response

    This whitepaper provides an overview and understanding of ransomware and how to successfully combat it.

  • Forecasting Cloud's Future

    Conversations with Federal, State, and Local Technology Leaders on Cloud-Driven Digital Transformation

  • IT Transformation Trends: Flash Storage as a Strategic IT Asset

    MIT Technology Review: Flash Storage As a Strategic IT Asset For the first time in decades, IT leaders now consider all-flash storage as a strategic IT asset. IT has become a new operating model that enables self-service with high performance, density and resiliency. It also offers the self-service agility of the public cloud combined with the security, performance, and cost-effectiveness of a private cloud. Download this MIT Technology Review paper to learn more about how all-flash storage is transforming the data center.


When you download a report, your information may be shared with the underwriters of that document.