The NSA is snooping on us! OK, that’s old news. The newer news is that it ain’t just the NSA. There’s an industry called “data brokers” and they are making millions/billions/gazillions by gathering and sharing our search history, buying habits and marriage status with advertisers and marketers. We know the big ones: Google, Facebook, Yahoo, Microsoft. You may be surprised to learn that a number of other companies have been doing this longer: Axciom, Epsilon and Experian are just some of the Big Data companies. The prevalent paradigm is that companies offer consumers free or low-cost services in exchange for your data. That paradigm may be changing…..but not necessarily for the better.
Bernard Marr offers this not-too-far-in-the-future scenario: “Just imagine you are sitting on your sofa watching American Idol on TV when you and your partner have a little spat about who should be voted out. For whatever reason the little disagreement escalates into a full-blown argument. What’s different this time is that your TV, using its in-built microphone, picks up your feud and sells this information in real-time to a marriage-counseling provider who is then able to stream an ad for their services right to your living room. Crazy futuristic vision? No, this exact scenario was outlined in a recent patent application by one of the major broadband and telecom companies in the U.S.
It’s right around the corner. Health care, energy services, employment, locational services are all entering the Big Data world. Your thermostat can adjust your energy use to limit over-consumption — and collect data indicating where you are in your home. GPS devices can track your workouts — and tell app makers, or anyone who buys the information from them, where you’ve been. Secondhand data brokers get their hands on all sorts of information generated on phones, in Internet stores and in other contexts, creating sometimes-extensive profiles of individuals. Advertisers, lenders and employers can buy those profiles to find the right consumers for their product or the right employees to hire. Those same data can be used to discriminate against people. The issue is large enough that it triggered a White House ‘Big Data’ report that explains the dangers and the needed protections. It is absolute must-read stuff for anyone seriously studying the implications. It’s a much bigger issue than you’d imagine.
Incredibly, there are currently no federal laws regulating the collection and distribution of personal consumer data unless the data is used to evaluate creditworthiness; then the Fair Credit Reporting Act applies. But otherwise, you have no legal right to know what data brokers know about you; no recourse in the event data brokers maintain inaccurate data about you; no right to know who your data is shared with or sold to. Most data brokers are not Credit Reporting Agencies subject to the FCRA. They’re free to do whatever they want with your data, even make up assumptions about you, and distribute your dossier to anyone they please. Efforts in Congress to get some protections have gone nowhere during this decade’s perpetual state of impasse.
In 15 minutes, you can learn about … from Allesandro Acquisti in a 2013 TED talk. (Click here for the video) He details social experiments that he conducted in which he tested loss of privacy “or transparency” in employment and marketing environments. What he proved is that privacy is not about having something negative to hide, but protecting you from manipulation. In once test, he created Facebook profiles, manipulating traits, then started sending out résumés to companies in the U.S. They followed up and discovered that these companies were monitoring and searching for the resume candidates and acting on the information they found on social media. Discrimination was happening through social media for equally skilled candidates. Similarly, they created an experiment where buyers were more attracted to advertisements that contained composites of people known to the targeted customer. The composites were assembled from Facebook-identified pictures of friends and family, altered just enough so that the target only subconsciously recognized them. So next time you are looking for a certain product, and there is an ad suggesting you to buy it, it will not be just a standard spokesperson. It will be one of your friends, and you will not even know that this is happening.
But the rest of us privacy non-geeks, there is an interesting development what warrants our attention. There are some new services that allow us to take control of this process by selling our personal data ourselves. A new generation of platforms like Datacoup, Handshake and Meeco are entering the market. All three are personal data marketplaces set to launch this yeaer and their goal is to cut out the data-mining middleman by allowing users to share their personal information with companies — and get paid for it. In theory, selling your own data allows you to reap different rewards, depending on the platform. With Datacoup, for example, you receive a set rate each month, depending on the amount of information shared, while Handshake allows you to negotiate a price. Meeco, meanwhile, pays with special offers from brands that users show interest in, rather than cash.
For example, Datacoup will give you a monthly check for about $8 for letting their API gather information from your Twitter or Foursquare profiles. With Handshake, you can negotiate to receive $10 for filling in a questionnaire about your buying habits. Meeco offers a private cloud to store your information and share your brand preferences, you might get a 50-percent discount on a pair of jeans. Granted, none of these services will make you independently wealthy, but their alleged goal is empowerment, not profit. Some of the uses of these platforms include allowing companies or individuals to share their data with a wide variety of companies, from universities and favorite brands to hedge funds and retailers. Data buyers also benefit from the two-way marketplace. While data brokers export information from different, often outdated, public registries, customer-produced data is fresher and more accurate.
Ultimately, whether these new data empowerers succeed will be driven by the extent to which customers are worried enough about their privacy to embrace such services. Given that habits are hard to change and selling your own data isn’t exactly lucrative, the forecast is more long-term than around-the-corner. As the White House Big Data report indicates, there will need to be done to legally regulate online data privacy in order for them to flourish. Unfortunately, legislation always moves more slowly than technology. A 2014 report by the U.S. Federal Trade Commission showed that data brokers operate with a fundamental lack of transparency and called for more accountability. It recommends new laws that would enable consumers to learn of the existence and activities of data brokers and provide consumers with reasonable access to information about them held by these entities. Of course, these reforms won’t happen with the current Congress — but this problem isn’t going away anytime soon and, with luck, the current Congress will.