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FTC orders data brokers to explain use of consumer profiles

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The Federal Trade Commission has ordered nine data brokers to explain how they collect and use information about consumers, the agency announced Tuesday.

The orders are the latest move by the FTC to study the operations of an industry capable of creating detailed profiles of users based on their Web browsing history, Internet searches and publicly available offline sources such as magazine subscriptions and government databases.

Advertisers use the data to target online ads and offers. Such information is also playing an increasingly prominent role in political campaigns. President Obama’s reelection campaign amassed the most detailed and sophisticated database of voters in history, in part by using information collected by data brokers.

“We really just want to learn more about their business models and their business practices,” said Tiffany George, an attorney with the FTC’s division of privacy and identity protection.

The FTC this month issued a report on how mobile apps have made it easier for companies to collect personal information on children without their parents knowing. The child privacy issue is likely to produce a significant legislative effort in the coming Congress. U.S. Reps. Edward J. Markey (D-Mass.) and Joe Barton (R-Tex.), who co-chair the Bipartisan Congressional Privacy Caucus, held a hearing last week featuring representatives of data brokers, privacy advocates and two FTC commissioners.

The companies covered the FTC’s legal orders are Acxiom, Corelogic, Datalogix, eBureau, ID Analytics, Intelius, Peekyou, Rapleaf and Recorded Future. They have been instructed to provide the sources of the information they collect, explain how they handle it, and explain what ability consumers have to access and potentially correct information about themselves.

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