Data has become the world’s most coveted commodity—more valuable than oil[1], lumber or the water drying up in the Colorado River.
And it’s prized even though it’s not rare or difficult to obtain. The dizzying growth of the digital economy over the last 15 years has fueled an explosion of data touchpoints linked to every American citizen.
On the surface, the volume of data may not seem like a reason for concern, but the ways it’s collected, assessed and “commoditized” can be frightening.
Data brokers—companies that collect, track and sell personal consumer data—set the stage for exploitation and manipulation by entities ranging from relatively benign consumer products companies to openly hostile foreign powers like China and Russia.
With mixed success, just two U.S. states have pushed back against data brokers and the risks created by their opaque business practices. It’s a daunting problem with potential roadblocks to reform, including questionable practices by the U.S. government.
DEFINING DATA BROKERS
Data brokers collect personal information about consumers from companies and other sources and then sell or license it for profit. The brokerage industry brings in big money, with most estimates north of $200 billion per year.
Although Google and Facebook are known for collecting data used to target advertising, data brokers operate differently. They collect very specific information that they can link directly to a person’s identity.
Look at websites like Spokeo. Data is readily available that includes a person’s name, address, phone numbers and location. But that’s just a taste of the public data that’s online. Brokers build profiles of people and then license or sell the information to third parties.
Who are these third parties? There’s no shortage of buyers.
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