Data brokers, a big business at the expense of you

In an airport waiting room, a group of passengers are entertaining themselves until the next flight. Most of them have a smartphone, a tablet or a laptop between their hands. There is a girl who is trying to convince her parents to buy her something that she saw on the screen of her mobile phone.

This scene is very usual: tired parents because of their children’s desires. Before, this situation was more common when they were in front of the television, but now everything revolves around the Internet. Brands take advantage of this, as they launch ads and campaigns addressed to their potential customers.

Finally, the parents of the girl gave up and took the wallet out of their bag. They shopped online by accepting the cookies of the website which they haven’t read and also clicked on the checkbox which says that they have read the terms and conditions of payment.

When it comes to reading things on the Internet, everybody lies. Lots of people think that the general terms and conditions are a mere formality but in fact, they are more than that.

Data brokers, they know a lot about you

Every move you do on the Internet is registered. Databases save all kind of information about users: if they surf the web from home, from work or on the go; at what time they do it; how long they stay on every website or the devices they use.

Databases record if something on the Internet grabs your attention, what things you add to your wishing list, the link you send to your contacts or the content you share on your social networks. This process is well known as Big Data, and everything suggests that this market will grow a lot in the next years.

The information gathered through devices has a big value. Inside the big data, data brokers are entities which collect and classify users’ information. After this process, they create customer profiles to sell them to companies, and this is how they make a lot of money.

The clients of data brokers buy that information to set personalized messages and create marketing campaigns. Companies which know their clients’ desires generate more sales than their competitors, and this due to data which users undervalue. We used to think that a like on Facebook or a simple e-mail address were not important.

However, the main problem is not how much they know about us, but it’s how they use the information they have gathered. Moreover, people barely know who is behind data brokers companies, another thing that should worry us.

What is known about data brokers?

When it comes to talking about privacy on the Internet and users’ information, Facebook and Google come to mind. Nevertheless, in the report of the Federal Trade Commission of the United Stated, none of these IT companies is mentioned.

Acxion and Experian are some of the names which appear in the document, and they are also some of the biggest data brokers. You won’t find a lot of information about these companies. What is known it is that they specialised on certain niches, as in this way they become competitive.

The majority of clients of data brokers are credit institutions. In fact, Experian is a particular case where a data broker company is also a credit entity. According to Amnesty International, Experian has a database of 235 million American consumers and, though AI can not prove it, they say that this information might discriminate against people who ask for credit.

Imagine for a while that health insurance companies buy information from data brokers. They might drive up their products to certain people or not sell it to people who are not very healthy.

Sensitive data and its margin of error

When you look for information about data brokers, Acxiom is one of the most famous. The FTC’s report says that their database has information about 700 million consumers all over the world, and three thousand of them are from the US market.

Companies like Acxiom gather most of the information without the prior consent of users, another feature of this industry, according to FTC. In 2012, the Commission reported that these companies collected information about demographic data and consumers’ preferences, but also, they used religion convictions, ethnicity and political leanings to create users’ profiles. This data violates people’s privacy.

Data brokers companies say that they do not infringe privacy when they create consumers profiles, as they use information to benefit users and offer them advertisements of products and services which cover their necessities.

The margin of error of this industry is something that should worry us. A high officer of this area revealed to Amnesty International: “The industry is based on the margin of error”, in other words, it is not an exact science to collect information, cross-referencing in databases and create profiles.

So, the overview of these companies is that they have sensitive data about consumers, and they can commit mistakes when they work with this information. Now it’s time to wonder how this situation affects users?

What about data brokers in the United Kingdom?

Data brokers are into the spotlight. In 2015, The Information Commissioner’s Office (ICO) collected the names of around 1,000 data brokers which work in the United Kingdom. The ICO also wrote the obligations data brokers have to operate within the British law.

Some of those obligations consist in answering a letter sent by the ICO. Data brokers need to report these questions: how they comply with the law (including what data they share), how they get people’s consent to share their data, and a list of all companies they’ve worked with in the last six months.

The data brokers registered by the ICO are obligated to provide this information. If they don’t, they will have to face court actions and fines of 2,500 pounds.

How to protect sensitive data on the Internet?

Data security is one of the most popular topics on the ODS blog. We talked about the importance of protecting your devices when using a public Wi-Fi. Now you can avoid phishing attacks easily with these steps and finally, it is vital to know the safest way to buy online.

Protecting private information might be a utopia for those who want to develop part of their professional activity on the Internet, or even for those who want to take advantage of living with the Internet connection. To protect our sensitive data, we need to know how companies will use it from the moment we buy online or when we leave our name and e-mail address in a traditional shop.

It is tedious to read websites’ cookies, and the terms and conditions use every page you visit, especially when you shop online or install applications on your devices. Reading and becoming aware are useful habits for people to know how data brokers will use consumers’ sensitive data, and once they know it, they need to wonder if providing this information is necessary or not.

Users may realise that they are vulnerable on the Internet, and they need to protect themselves. Some people work with sensitive data, like entrepreneurs and freelancers and they need to preserve their privacy online. In order to meet these needs, the ODS team prepare people who want to increase their security online. In the end, users have the last word, but their personal information may be used without their permission.