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FTC calls for Congress to crack down on consumer data harvesting

Commission says measures needed to rein in brokers

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The US Federal Trade Commission (FTC) is calling for stricter regulations on companies that gather and sell personal information.

The FTC said in a recent report (PDF) that it believes Congress should look to enact a new set of laws that will allow consumers to control when and how their personal information gets used for applications such as targeted advertising and market analysis.

The aim of the report, released Tuesday by the commission, is to provide the public with a clearer picture on how "data broker" firms operate. Collecting public information such as voting records, finance information, or purchase and browsing histories, the specialized firms seek to pool data in specific areas, then combine findings with those of other firms to create a larger picture of how people act both online and offline.

While many data brokers put their findings to use in marketing and market analysis campaigns, other records are used for more benign applications such as identity verification and fraud protections.

The primary concerns, according to the FTC, lie in how these data brokers go about collecting data and to what extent they allow users to see where and how information is collected and stored.

In its study, the commission noted that many of the data brokers it studied were not giving users a clear picture of just what information they were gathering and how it would be put to use.

"Data brokers acquire a vast array of detailed and specific information about consumers; analyze it to make inferences about consumers, some of which may be considered quite sensitive; and share the information with clients in a range of industries," the FTC said.

"Much of this activity takes place without consumers' knowledge."

To address the issue, the FTC recommends that Congress consider new legislation that would aim to provide clear rules and regulations on data collection, storage, and transparency. The proposed rules would include requirements that brokers allow users to view and opt out of their data collection programs. Other proposals include requirements that brokers explain how data is analysed and what assumptions are made (such as medical conditions) by analysis tools.

The Commission also suggests that brokers themselves should consider settling on a series of best practices to help individual firms craft policies for data collection, retention, and transparency.

"As part of privacy by design, data brokers should strive to assess their collection practices and, to the extent practical, collect only the data they need and properly dispose of the data as it becomes less useful," the FTC wrote.

"This is particularly important in light of companies' increased ability to collect, aggregate, and match consumer data and to develop secondary uses for the data in ways that consumers could never have contemplated when they provided the information." ®

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