Sens. Peters, McSally Push for Data Broker Transparency Through FTC
Congress should bring more transparency to data broker practices through the FTC, Sens. Gary Peters, D-Mich., and Martha McSally, R-Ariz., told us after introduction of their bill (see 1908010043) to require data brokers to register annually with the FTC for acquisition, use and protection of brokered personal data.
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Policymakers and the public deserve to know the identities of data brokers, said Peters: “It’s important for us to know as we look at the landscape of the industry.” Data is gathered and consumers “scored” without any knowledge of the industry practices, McSally said. Brokers are potentially circumventing laws like the Fair Credit Reporting Act, which requires data collected by credit reporting agencies to be transparent and allows consumers to correct the record, she said: “We need to bring it into the light. We have real concerns about it.” McSally dismissed any notion that Facebook’s Cambridge Analytica scandal played any role in crafting the bill, saying the bipartisan duo was “just looking at the facts.”
The FTC made a series of legislative and best practice recommendations in 2014 to increase data broker transparency and user control. The agency asked Congress to consider requiring “data brokers to provide consumers access to their data, including sensitive data held about them, at a reasonable level of detail, and the ability to opt out of having it shared for marketing purposes.” The FTC suggested creating a centralized, online portal “where data brokers can identify themselves, describe their information collection and use practices, and provide links to access tools and opt outs.”
“The FTC no doubt considers it a realistic undertaking,” said Hinch Newman internet advertising and marketing compliance attorney Richard Newman, who represents clients before the FTC.
The transfer of data from social media companies to third parties is about 5 percent of the data privacy problem, said PikMobile co-founder Scott Relf. That means this legislation is a hyper-targeted bill addressing one specific issue. The other 95 percent of the problem is that companies like Facebook hold vast quantities of data creating digital profiles for hyper-ad targeting, he said.
A privacy bill of rights (S-1214) from Sen. Ed Markey, D-Mass., mirrors the recommendation of having a centralized registry online for public review. Sens. Mark Warner, D-Va., and Josh Hawley, R-Mo., are also highlighting what they see as the lack of transparency concerning data collection. But that bipartisan pairing is pushing for companies to disclose how consumer data is valued and monetized (see 1906240012).
The FTC recommended the industry implement privacy-by-design models, which consider “privacy issues at every stage of product development.” It suggested data brokers implement better measures “to refrain from collecting information from children and teens, particularly in marketing products.” It also recommended “reasonable precautions” to ensure no downstream abuse of data by other parties.