Antitrust Law Daily Wrap Up, PRIVACY NEWS: Senate bill regulating collection of consumer market information by data brokers introduced, (Feb 13, 2014)

By Linda O’Brien, J.D., LL.M.

Federal legislation that would regulate the collection of consumer personal information by data brokers for marketing purposes and ensure accountability and transparency for consumers was introduced yesterday in the proposed Data Broker Accountability and Transparency Act of 2014 (DATA Act). The measure was sponsored by Senators John D. (Jay) Rockefeller IV (D, W.V.) and Edward Markey (D, Mass.)

The DATA Act follows an investigation and majority staff report by the Senate Committee on Commerce, Science, and Transportation into the multi-billion dollar industry of data brokers. Released in December 2013, the report revealed the breadth and scope of the sensitive data—including financial, health, and other personal information—that is routinely amassed by data brokers on consumers without their knowledge or consent. The Committee also held a hearing to examine the privacy and accountability concerns with the industry.

The bill would prohibit data brokers from collecting or soliciting consumer information by deceptive means and allow consumers to access and correct their marketing information to help ensure its accuracy. Under the DATA Act, consumers would be able to opt out of having their information collected and sold by data brokers for marketing purposes. The legislation also would empower the Federal Trade Commission to enforce the law and impose civil penalties on data brokers that violate consumer privacy and trust.

In introducing the bill, Sen. Rockefeller said in an announcement, “Consumers deserve to know what information about their personal lives is being collected and sold to marketers by data brokers. This booming shadow industry, that generated more than $150 billion in 2012 and operates with very little scrutiny and oversight, is making tremendous profits off practices that can be disturbing and totally unfair to consumers. As I said during the Committee’s recent hearing on data brokers, I would be taking action to protect consumers and hold data brokers accountable. This legislation is a strong step in that direction. It will give consumers important protections like the ability to access files a data broker compiles of their personal information; the ability to correct inaccuracies in those files; and, importantly, choose whether they want to allow their personal information to be sold to other companies.”

“Consumers have the right to access to their personal data, the ability to correct it, and opt-out from marketing purposes, and Chairman Rockefeller’s legislation ensures these critical consumer controls,” said Sen. Markey. “The data broker industry has for too long operated in the shadows, compiling dossiers on millions of Americans. It is time to shine a light on this industry, and Chairman Rockefeller’s legislation helps put in place a system of rules that puts consumers in control of their information. I am proud to co-sponsor this bill, and look forward to working with Chairman Rockefeller and my colleagues to pass this important legislation for consumers.”

The DATA Act is part of Sen. Rockefeller’s efforts as Chairman of the Commerce Committee to protect consumer online privacy.

In a February 13 press release, the Direct Marketing Association (DMA), the world’s largest trade association regarding data-driven marketing, characterized the DATA Act as legislation that would hinder the responsible use of data across today’s data-driven marketing economy, stifle innovation, and hurt consumers.

“Time and again, Congress has found that access and correction to consumer data are necessary only when the information is used for eligibility purposes, and marketing is not an eligibility purpose,” said Peggy Hudson, DMA’s senior vice president of government affairs. “Imposing an access and correction regime on marketing data is not necessary to protect consumer privacy and doing so would make it harder for companies to keep data secure at a time when consumers are more concerned about identity theft than ever before.”

“Data is the new gold, and the responsible use of consumer data is the fuel that drives the U.S. economy,” added Hudson. The association stated that DMA members deeply value consumer trust and understand that responsible data practices are critical to building and maintaining customer relationships.

News: Privacy