Would more transparency on the part of data brokers be good for investors?

I came across an article in The Wall Street Journal about “device fingerprinting.” Device fingerprinting is information collected about a remote computing device for the purpose of identification. Data brokers use fingerprints can be used to fully or partially identify individual users or devices even when cookies are turned off.

Back in 2014, the Federal Trade Commission produced a report addressing the lack of transparency in the data broker industry.  While the report does not explicitly use the term device fingerprinting, the FTC does describe web crawling on particular websites containing public information and the use of application programming interface among the methods used to collect information.  Based on its description, device fingerprinting appears to take its place among these collection methods.

The FTC has recommended that Congress pass legislation that would provide consumers with access to the information data brokers collect on them.  It was also recommended in the report that consumers be allowed to opt out of a data brokers collection efforts. For further transparency, the FTC also recommended that a central website listing data brokers and describing their data collection policies be created.

In March 2015, Senator Ed Markey, Democrat of Massachusetts, introduced S. 668, the Data Broker Accountability and Transparency Act of 2015.  The thrust of the bill appears to focus on the accuracy of the data collected and shared; the transparency about why information is being collected; and the ability of the consumer to review the information collected and requesting that information not be used for the purposes collected.

It would be surprising to see the bill go beyond these three main restrictions.  Congress has shown over the past two decades a wariness about regulating commerce on the internet.  Regulating broadband, the on-ramp that gets the consumer to the information superhighway is one thing.  Regulating the actual commerce moving on that highway is a different story.

Ironically, it would especially put net neutrality advocates in a tight position between so called openness and privacy.  It is the open network architecture of the internet that allows for apps to capture information from websites and transmit the information to third-parties for packaging and analysis.  This is the openness that net neutrality types were advocating for. The millions of Americans who supported the open internet campaign may not like the result of net neutrality, that their privacy may have been put in some jeopardy.

S. 668 has been in committee for six months and shows little sign of moving to a vote much less the floor.  Since the language of the bill does not necessarily sound the death bells for the data broker industry, even if it passes and compliance costs increase, the increase in demand for data that the industry provides may offset these costs.

About Alton Drew

Alton Drew brings a straight forward and insightful brand of political market intelligence. Alton Drew graduated from the Florida State University with a Bachelor of Science in economics and political science (1984); a Master of Public Administration (1993); and a Juris Doctor (1999). You can also follow Alton Drew on Twitter @altondrew.
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