philip lelyveld The world of entertainment technology

Inside the Shadowy World of Data Brokers

[Philip Lelyveld comment: I've heard this many times over the years.  If you can't communicate it clearly to regulators, why should you be trusted to self-regulate?  "Sharing the view of the industry at large, Kleinberg says he thinks the responsibility should come from within because regulators don't have a deep understanding."]

"In 2012, the data broker industry generated $150 billion in revenue. That's twice the size of the entire intelligence budget of the United States government -- all generated by the effort to detail and sell information about our private lives," Rockefeller adds.

The largest of these companies -- Acxiom, Datalogix, Epsilon and Experian -- are bridging together data from the online and offline worlds and selling it to the likes of Facebook, Twitter and others to enhance their respective ad products. The general approach is to group and categorize consumers for marketers' online ad targeting efforts. Programmatic ads are then sold and targeted based on these profiles, which the industry insists are anonymous and not personally identifiable.

Regulators and legislators across the political spectrum are making it a top priority to investigate these data brokers and enact laws that could curtail their way of business. But as more troubling details about the operation and seemingly unrestricted reach of these data brokers come to the surface, it's unclear what can or will be done to rein in their most damning practices.

While he freely admits "the ability to look at that individual data is a little scary," he adds that "anyone who's buying digital media today is buying data."

From that the debate usually pivots around the promise of self-regulation versus the need for legal protections and regulations.

Sharing the view of the industry at large, Kleinberg says he thinks the responsibility should come from within because regulators don't have a deep understanding. "I think that the industry organizations are actually taking it very seriously and putting together standards that accommodate reasonable privacy restrictions like allowing people to opt out," he says.

"I think consumers care less than we think in the moment. They care in the abstract sense," Kleinberg says. "I can't tell you of an example where data has been abused."

To embolden the case for self-regulation, the industry needs to do more to explain what data means, Kleinberg adds. "The terms data and big data get lumped together as this big sinister beast and a lot of it is not innocuous ... it's anonymized by obscurity," he says. "We should not rush to judge all of it without understanding that nuance."

See the full post here: http://www.cio.com/article/750322/Inside_the_Shadowy_World_of_Data_Brokers?page=1&taxonomyId=3006