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Reaction Mixed To FTC Data Broker Report

The Federal Trade Commission got plenty of input on its just-released report concluding that the data broker business needs to operate more transparently either on its own dime or with the help of Congress or perhaps both.

Reps. Joe Barton (R-Texas) and Bobby Rush (D-Ill.) welcomed the findings and said they would continue to push for legislation giving consumers greater control over their personal information.

Barton is co-chair of the Bi-Partisan Privacy Caucus and has long pushed for more privacy protections online, particularly for children. 

"I have been skeptical of this industry for quite some time and have introduced legislation along with my friend Rep. Bobby Rush that places some guidelines on data brokers to give consumers access and control [the Data Accountability Act]," said Barton in a statement. “As the co-chair of the Bi-Partisan Privacy Caucus, I will continue to champion the individual right to privacy, and I plan to continue to put pressure on the data broker industry to do the same.”

“[T]he FTC’s new data brokers report should be essential reading for consumers," said Rush.

The Center for Digital Democracy, one of the leading voices for a tougher government approach to privacy, suggested the results were not a surprise, and the government reaction, sadly, wasn't either.

"The Federal Trade Commission has issued a powerful and disturbing privacy wake-up call," said CDD executive director Jeff Chester. "The report reveals the largely invisible Big Data-driven complex that regularly spies on every American, comprehensively following our activities both online and off. It delivers a critical 'black eye' to the data broker industry, which has cynically expanded their surveillance on Americans without regard to their privacy. Unlike the White House’s Big Data reports issued earlier this month, the FTC study provides a much more realistic—and chilling—analysis of an out of control digital data collection industry."

But, said Chester, "the commission’s calls for greater transparency and consumer control are insufficient. The real problem is that data brokers—including Google and Facebook—have embraced a business model designed to collect and use everything about us and our friends—24/7.  Legislation is required to help stem the tide of business practices purposefully designed to make a mockery out of the idea of privacy for Americans."

The Software & Information Industry Association (SIIA) also put out the welcome mat for the study, and for more transparency, but not for legislation, and it also pointed out, as did the FTC, the benefits of big data. “As the report recognizes, ‘data brokers’ serve a wide range of valuable roles, from verifying identities, preventing fraud and improving marketing outreach," the association's president Ken Wasch said.

“We share the Commission’s goal to enhance the level of transparency and accountability of data brokers. This can – and should – be done without new legislation or regulation," said Wasch. "SIIA and industry leaders are committed to building on current best practices to ensure consumer trust and confidence in the marketplace. On the contrary, burdensome new legal requirements threaten to impede data-driven innovation and hurt the ability of U.S. companies to create jobs and drive economic growth."

Daniel Castro, director of the Center for Data Innovation, argued that the lack of transparency that troubled FTC is instead a function of the business.

“There’s a bit of irony in the FTC’s critique of data brokers as not being sufficiently transparent since the point of a broker (in any industry) is to facilitate transactions without causing unnecessary friction," he said. "Requiring companies to provide consumers with a notice after every transaction would hinder, not help, commerce and do little to promote additional consumer trust. The FTC seems to be stuck in a notice-and-choice world while everyone else is trying to move on. This reminds me of the Visa commercial where everything works smoothly and efficiently until some guy tries to pay with cash instead of a credit card and mucks up the line. Ideally a broker should be neither seen nor heard – they are intentionally in the background of transactions.”