Firms That Collect And Resell Data Are Known As _____.

Data has become a crucial resource in the digital age, fueling advancements in various sectors. Businesses across industries leverage data to gain insights, improve decision-making, and enhance their overall performance. However, the collection, analysis, and resale of data have given rise to a specific type of company known as data brokers. These firms play a significant role in the data ecosystem, acting as intermediaries between data sources and data users.

Understanding Data Brokers

Data brokers, also known as information brokers or data aggregators, are entities that specialize in collecting information about individuals and businesses from various sources, analyzing and enhancing that information, and then reselling it to other organizations. Unlike companies that collect data directly from consumers through their own services, data brokers gather data from a wide range of public and private sources.

How Data Brokers Operate

The operations of data brokers involve several key steps:

1. Data Collection: Data brokers collect information from a multitude of sources, including public records, commercial transactions, online activities, and surveys.
2. Data Aggregation: Once collected, the data is aggregated and organized into comprehensive profiles. This involves linking data points from different sources to create a unified view of individuals or businesses.
3. Data Enhancement: Data brokers often enhance the data they collect by appending additional information, such as demographic data, lifestyle information, and purchasing habits.
4. Data Analysis: Data brokers analyze the aggregated and enhanced data to identify patterns, trends, and insights that can be valuable to their clients.
5. Data Resale: Finally, data brokers resell the data and insights they have gathered to a variety of clients, including businesses, government agencies, and marketing firms.

Sources of Data

Data brokers obtain information from a wide array of sources, including:

• Public Records: Data brokers collect information from public records, such as property records, voter registration lists, and court records.
• Commercial Transactions: Data brokers gather data from commercial transactions, such as credit card purchases, online retail transactions, and loyalty program data.
• Online Activities: Data brokers track individuals' online activities, including website visits, search queries, and social media interactions.
• Surveys: Data brokers collect data from surveys and questionnaires, often offering incentives for participation.
• Mobile Apps: Data brokers collect data from mobile apps, including location data, usage patterns, and personal information.
• Social Media: Data brokers gather data from social media platforms, including profiles, posts, and connections.

The Role of Data Brokers in the Data Ecosystem

Data brokers play a crucial role in the data ecosystem, serving as intermediaries between data sources and data users. They provide valuable services to both sides of the equation, enabling data to be efficiently collected, analyzed, and utilized.

Benefits for Data Users

Data brokers offer several benefits to organizations that use their services:

• Access to a Wide Range of Data: Data brokers provide access to a vast amount of data that would be difficult or impossible for individual organizations to collect on their own.
• Data Aggregation and Enhancement: Data brokers aggregate and enhance data from multiple sources, providing a more complete and accurate view of individuals and businesses.
• Data Analysis and Insights: Data brokers analyze data and provide insights that can help organizations make better decisions, improve their marketing efforts, and mitigate risks.
• Efficiency and Cost Savings: Data brokers allow organizations to focus on their core competencies by outsourcing data collection, analysis, and management.

Benefits for Data Sources

Data brokers also provide benefits to organizations that provide data:

• Monetization of Data Assets: Data brokers allow organizations to monetize their data assets by purchasing data and reselling it to other organizations.
• Compliance with Privacy Regulations: Data brokers help organizations comply with privacy regulations by ensuring that data is collected and used in a responsible and ethical manner.
• Data Security: Data brokers implement security measures to protect data from unauthorized access and misuse.

Ethical and Legal Considerations

The activities of data brokers have raised several ethical and legal concerns.

Privacy Concerns

One of the primary concerns about data brokers is the potential for privacy violations. Data brokers collect and aggregate vast amounts of personal information, often without individuals' knowledge or consent. This information can be used to create detailed profiles of individuals, which can be used for a variety of purposes, including targeted advertising, credit scoring, and risk assessment.

Transparency Concerns

Another concern is the lack of transparency surrounding data broker activities. Many data brokers operate in the shadows, making it difficult for individuals to know what information is being collected about them and how it is being used. This lack of transparency can make it difficult for individuals to protect their privacy and control their personal information.

Accuracy Concerns

The accuracy of data collected by data brokers is also a concern. Data brokers often rely on automated processes to collect and aggregate data, which can lead to errors and inaccuracies. These inaccuracies can have negative consequences for individuals, such as being denied credit or being targeted for unwanted advertising.

Discrimination Concerns

Data brokers can also be used to discriminate against individuals based on their personal characteristics. For example, data brokers can be used to identify individuals who are likely to be high-risk borrowers or who are likely to be interested in certain products or services. This information can be used to deny individuals access to credit, housing, or employment opportunities.

Legal Framework

The legal framework governing data brokers is complex and varies from jurisdiction to jurisdiction. In the United States, the Fair Credit Reporting Act (FCRA) regulates the activities of data brokers that provide consumer reports. The FCRA requires data brokers to provide individuals with access to their consumer reports and to correct any inaccuracies.

The California Consumer Privacy Act (CCPA) grants California residents the right to know what personal information is being collected about them, to delete their personal information, and to opt-out of the sale of their personal information. The CCPA applies to data brokers that do business in California.

The European Union's General Data Protection Regulation (GDPR) regulates the processing of personal data of individuals within the EU. The GDPR requires data brokers to obtain individuals' consent before collecting and processing their personal data.

Examples of Data Brokers

Several prominent companies operate as data brokers, collecting and reselling data on individuals and businesses. Here are some notable examples:

1. Acxiom: Acxiom is one of the largest and most well-known data brokers in the world. It collects and aggregates data on hundreds of millions of consumers worldwide, providing insights to businesses for marketing, risk management, and other purposes.

2. Experian: While primarily known as a credit reporting agency, Experian also operates as a data broker, collecting and selling data on consumers for marketing and other purposes.

3. Equifax: Similar to Experian, Equifax is a credit reporting agency that also engages in data brokering activities, providing data and insights to businesses.

4. TransUnion: TransUnion is another major credit reporting agency that collects and sells data on consumers for marketing and other purposes.

5. Oracle: Oracle is a technology company that has expanded into the data brokering space through acquisitions and partnerships. It collects and sells data on consumers and businesses for a variety of purposes.

6. LexisNexis: LexisNexis is a data broker that specializes in providing legal and business information. It collects and aggregates data from public records, news sources, and other sources.

7. CoreLogic: CoreLogic is a data broker that specializes in providing real estate and property information. It collects and aggregates data from public records, MLS listings, and other sources.

The Future of Data Brokers

The future of data brokers is uncertain. As privacy concerns continue to grow, governments are likely to impose stricter regulations on data broker activities. This could make it more difficult for data brokers to collect and sell data, and it could also increase the cost of doing business.

However, data brokers are likely to adapt to these changes. They may focus on collecting and selling data that is less sensitive or that is collected with individuals' consent. They may also invest in new technologies that can help them protect data privacy.

Ultimately, the future of data brokers will depend on the balance between the benefits of data-driven innovation and the need to protect individual privacy.

Navigating the Data Broker Landscape

Given the prevalence of data brokers and their impact on individual privacy, it's essential to understand how to navigate this landscape effectively. Here are some practical steps individuals can take:

1. Be Mindful of Data Sharing: Exercise caution when sharing personal information online, whether through social media, online forms, or mobile apps. Consider the privacy implications before providing data.

2. Review Privacy Policies: Take the time to review the privacy policies of websites and services you use. Understand what data is being collected, how it's being used, and whether it's being shared with third parties.

3. Adjust Privacy Settings: Configure privacy settings on social media platforms and other online services to limit the amount of personal information that is publicly available.

4. Use Privacy-Enhancing Tools: Consider using privacy-enhancing tools such as VPNs, ad blockers, and privacy-focused browsers to protect your online activity from tracking.

5. Opt-Out of Data Collection: Some data brokers offer opt-out options, allowing individuals to request that their data be removed from their databases. Take advantage of these options where available.

6. Exercise Your Data Rights: Familiarize yourself with data privacy laws in your jurisdiction, such as the GDPR or CCPA, and exercise your rights to access, correct, or delete your personal data.

7. Stay Informed: Stay informed about data privacy issues and the activities of data brokers. Follow news and research from reputable sources to stay up-to-date on the latest developments.

Conclusion

Data brokers play a significant role in the data ecosystem, collecting, analyzing, and reselling data to various organizations. While they offer benefits such as access to a wide range of data and data analysis insights, their activities also raise ethical and legal concerns, particularly regarding privacy, transparency, and accuracy. As the digital landscape evolves, it's crucial for individuals and organizations to understand the role of data brokers, navigate the data broker landscape effectively, and advocate for responsible data practices. By doing so, we can harness the power of data while safeguarding individual privacy and promoting a more ethical data ecosystem.