Buying and Selling Data, Part 2
Data brokers collect vast webs of data on you — but what do they actually do with that information?
Previously, we looked into how data brokers and other companies collect your data. But what exactly do they do with it?
The vast amount of information that data brokers collect is analyzed, sorted, and then sold to other companies. When data brokers know everything about you and everyone else, they can predict your future behavior and try to influence it. If they know, for example, you lean left politically and are in the age range of 25–35, they can look at the purchasing behavior of people with similar demographics and recommend, say, a New York Times subscription to you. Data brokers can also use the breadcrumbs of data they collect to determine when you have major life events occurring, such as when you become a new parent.
Why buy data?
This sort of information is a goldmine for companies, many of whom primarily buy from data brokers to create targeted advertising campaigns. Retailers can purchase lists of potential consumers categorized by trait. Data brokers are more than happy to provide lists of people who like mystery novels or have gluten allergies or any number of other attributes.
But data brokers don’t just try to sell you stuff. Companies often turn to data brokers to detect fraud and security risks. Basically, if your behavior pattern drastically changes, you might have been the victim of identity theft. Using your previous data, companies can detect this sooner rather than later.
Data has also been immensely helpful to researchers and engineers. People are more willing to tell their deep dark secrets — or at least mildly embarrassing behavior — to their Google search bar than they are to a lab assistant. Data from health apps, some of which make clear to their users that the data they input is anonymized and being used for research, can be a huge asset to fields like women’s reproductive health, which historically understudied. Online behavior has also been used to train machine learning algorithms and AI.
One of the darker sides of data brokers is their work on political influence campaigns. The most well-known instance of data brokers getting involved in politics is Cambridge Analytica, which worked on the Trump presidential campaign in 2016. Using the profiles they created, they targeted African-American voters with ads that discredited Hillary Clinton, attempting to suppress the Democratic vote.
Breaches, discrimination, and other threats
Unsurprisingly, this vast web of data commerce has had negative consequences.
People search websites, which are owned and operated by data brokers make it easy for stalkers and abusers to find information about their victims, including their address and phone number.
Pretty much any company that has data on you has the potential to be hacked or have some sort of data leak. The most well-known instance of this possibility is the 2017 Equifax data breach, in which over 145 million people had their data exposed by hackers. When these companies have so much information on you, the potential consequences of that data being leaked are enormous.
Data brokers can also expose consumers to threats themselves. In 2015, two data broker firms illegally sold the information of people seeking payday loans to companies that scammed them out of their money. The FTC found that of the 500,000 people whose data was sold, over $7 million was stolen from their bank accounts by the scammers.
The potential impacts of data brokers are even worse. Because your profile includes so much of your personal information, mortgage lenders or landlords could deny you based on race or income, a practice that would essentially constitute digital redlining.
Your data could also be classified by data brokers as high-risk by something as simple as researching a medical condition for a family member or looking up a motorcycle dealership. Using your innocent Google searches, a data broker could deem you likely to engage in high-risk behavior. This information could then be used by insurance companies to increase your rates.
What’s worse is that data brokers aren’t always right. It’s very difficult to even find out what information they have on you and nearly impossible to get them to change it.
What can we do?
To create any sort of systemic change that will hem in data brokers’ power, government regulation is necessary. Currently, data brokers aren’t regulated the same way similar industries, like credit reporting are, despite offering more information and being used in a similar way.
There hasn’t been much regulation at the federal level to curb the reaches of the data broker industry, but there have been some attempts at the state level. Vermont passed a law requiring data brokers to register publicly, however, several simply didn’t register, and most remained opaque about their practices. Other states, like California, have passed digital privacy laws that allow users to opt-out of websites selling their data.
While there have been some steps forward, data brokers have not been hugely impacted and continue to be secretive about where they get their data from and what they do with it.
Want to opt-out yourself? Good luck. You can try to remove yourself from most of the people search sites, but the process is difficult and complicated. Some companies require you to do it by mail or charge you a fee to see what information they have on you. Here’s a guide to getting your data off these sites.
See part one of our deep dive into the data brokerage industry for more on how data brokers collect information.
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