More Data Brokers Targeted in Senate Commerce Committee Investigation

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pa-mobileSenate Commerce Committee Chairman Jay Rockefeller recently expanded his investigation into the data broker industry, focusing specifically on the compilation and sale of products that identify consumers based on their financial vulnerability or health status.

Rockefeller initially launched the investigation in October 2012 to uncover how consumers’ personal information was being collected, shared and used.  On December 18, 2013, a report was released in conjunction with Rockefeller’s hearing about the industry.  The report noted that one of the primary ways that data brokers package and sell data to marketers is by putting consumers into categories based on characteristics that enable marketers to target potential and existing customers. The report noted that in many cases this may be beneficial because it provides consumers with products and services that are specific to their interests and needs. However, problems arise when these categories describe consumers using financial characteristics and the data ends up in the hands of predatory businesses seeking to identify vulnerable consumers.

Rockefeller noted that in the course of his investigation, some of the largest data brokers, such as Experian, have been evasive in providing information that had been requested by the Committee (which is particularly problematic in light of allegations that Experian’s subsidiary sold consumer data to an alleged identity theft scheme).

Earlier this month, Rockefeller sent Experian and others, including Lexis Nexis, new requests for information seeking, among other things, lists of all purchasers of the personal consumer data that the respective companies had collected and shared.  In his correspondence, Rockefeller reiterated that he was “again” requesting information necessary for the Committee’s assessment of the potential consumer harms and benefits associated with data broker practices.

As we have reported in the past, the Federal Trade Commission has been cracking down on the data broker industry.  The Senate Commerce Committee’s ongoing investigation seeks to uncover more facts related to industry practices and, if necessary, continue that crackdown.

If you are interested in learning more about this topic, please e-mail us at info@kleinmoynihan.com, or call us at (212) 246-0900.

The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney.  Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.

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