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SOCIAL MEDIA LAW
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Monday, November 26, 2012

Lawmakers Voice Dissatisfaction With Responses From Data Brokers

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A bipartisan group of House lawmakers Nov. 8 said that how data brokers collect and use consumer information remains a mystery despite receiving details from nine companies, including several that collect information from social media websites.

Data brokers sell consumer information to third parties for various purposes, such as to verify a person's identity, according to a consumer privacy report issued by the Federal Trade Commission in March. The report said that concerns have been raised about the industry's lack of transparency.

On July 25, eight lawmakers, including Reps. Joe Barton (R-Texas) and Edward Markey (D-Mass.), co-chairmen of the bipartisan House Privacy Caucus and members of the House Energy and Commerce Committee, sent letters to nine companies, asking them to detail their data-handling policies and practices. Rep. Henry Waxman (D-Calif.), ranking member of the panel, also participated.

The nine companies responded to the inquiries in August, but the lawmakers did not make the responses public until November.

"The data brokers' responses offer only a glimpse of the practices of an industry that has operated in the shadows for years," the lawmakers said in a statement. "Many questions about how these data brokers operate have been left unanswered, particularly how they analyze personal information to categorize and rate consumers."

The lawmakers pointed out that several of the companies indicated that they mined consumer information from social media websites like Facebook and LinkedIn. Four of the companies–Acxiom Corp., Harte-Hanks Inc., Intelius Inc., and Meredith Corp.–said that they collect information directly from social media sites. Epsilon Data Management LLC and Merkle Inc. explained that they use social media information collected by third parties.

Several of the companies, such as Acxiom and Intelius, emphasized that they only collect publicly available social media data.

Most of the companies, with the exception of Acxiom, rejected the "data broker" label, the lawmakers explained. "One company called itself a 'data provider,' while another reported that since it only 'analyzes' data, [it] should not be considered a data broker," they said.

In its March report, the FTC recommended that Congress enact legislation to give consumers access to information data brokers hold about them, but in the meantime the commission called on data brokers to explore the idea of a centralized website to provide information to consumers.

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