F.T.C. Opens an Inquiry Into Data Brokers

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The New York Times
Wednesday, December 19, 2012

F.T.C. Opens an Inquiry Into Data Brokers

By NATASHA SINGER

It’s getting tougher to be a data broker.

Companies that collect, analyze and sell billions of details about the activities of consumers for marketing purposes have increasingly found themselves under government scrutiny this year.

The latest salvo comes from the Federal Trade Commission, which said on Tuesday that it had opened an inquiry into the practices of nine companies that collect and resell or analyze consumer data.

The agency issued 15-page administrative subpoenas to the information resellers. The orders require each company to provide extensive details about how it collects consumer data and how it uses, stores, analyzes and shares that data. The agency also asked for information about whether the company allows consumers to see and correct the records held about them.

After it reviews this information, the agency plans to issue a report to advise lawmakers on whether more regulation is needed; data brokers are currently largely unregulated.

The F.T.C.’s inquiry seeks far more comprehensive details than similar investigations this year in Congress. And executives at the companies may be more forthcoming about their practices with regulators because, unlike Congressional inquiries that often make their results public, the F.T.C. keeps the specifics it gathers confidential.

The subpoenas went to, among other companies, Acxiom of Little Rock, Ark., one of the world’s largest information resellers, which manages customer databases for major banks, automakers and retailers; eBureau, a company in St. Cloud, Minn., which, on behalf of clients like credit card companies, lenders, insurers and educational institutions, evaluates and scores online consumers in the market for those companies’ products; Intelius, a company in Bellevue, Wash., which offers people-search look-up services and background checks; and Peek-You, a company that analyzes social media sentiment.

“We are going to get a huge amount of data,” David C. Vladeck, the director of the Bureau of Consumer Protection at the F.T.C., said in a phone interview on Tuesday. “We are going to get answers.”

In an e-mail, Jennifer Barrett Glasgow, the chief privacy officer of Acxiom, said the company had not yet received the F.T.C.’s letter, but was looking forward to cooperating with the inquiry. “We consider this request as an avenue to promote a better understanding of why what we do is vital for the American economy as it creates enormous value for people and businesses while respecting and protecting consumers’ interests,” she wrote.

Gordon Meyer, the chief executive of eBureau, wrote in an e-mail that the consumer scoring company “welcomes the opportunity to describe, to the F.T.C., its practices and the benefits we provide to businesses as well as consumers.”

Representatives of other companies did not return e-mails seeking comment.

For more, visit www.nytimes.com.