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Data Brokers Under Fresh Attack from Congress – DMA Leading the Fight


Post Date: February 13, 2014
By: Rachel Thomas

After months of inquiries and Congressional hearings during which, DMA and our members participated fully and respectfully a new bill was introduced in the Senate late yesterday, the “The Data Broker Accountability and Transparency Act of 2014” (DATA Act), that would stymie the responsible use of data across the entire data-driven marketing economy, stifle innovation, and ultimately hurt consumers.

“Time and again, Congress has found that access and correction to consumer data are necessary only when the information is used for eligibility purposes, and marketing is not an eligibility purpose,” said Peggy Hudson, DMA’s senior vice president of government affairs in a press release today.  “Imposing an access and correction regime on marketing data is not necessary to protect consumer privacy and doing so would make it harder for companies to keep data secure at a time when consumers are more concerned about identity theft than ever before,” she continued.

We Are All Data Brokers Now

Introduced by Senator John Rockefeller (D-WV), Chairman of the Senate Commerce Committee, and Senator Edward Markey (D-MA), the DATA Act would require that “data brokers” provide consumers with ability to access and correct marketing information, and to opt-out of having that information used for marketing purposes.  A data broker is defined in the bill as any company that “collects, assembles, or maintains personal information concerning an individual who is not a customer or an employee of that entity in order to sell the information or provide third party access to the information.”  That is a very broad definition that would include most DMA members and marketers.

The bill would give consumers the ability to access and correct the information held on them by businesses, and allow people to opt-out of having that information used for marketing purposes. The bill is a recasting of Senator Rockefeller’s data security proposal from last Congress, and comes after quite a long interest in this part of the industry:

  • October 2012 saw the launch of a Senate Commerce Committee investigation into nine companies.  The investigation was expanded to include twelve additional companies in September 2013.
  • The Government Accountability Office (GAO) released a report on data brokers in November 2013, undertaken at the request of Senator Rockefeller.
  • The Senate Commerce Committee released the findings of its investigation in December 2013, on the eve of a hearing by the full Committee to examine the practices of data brokers.
  • Over the course of the Senate Commerce investigation, the companies targeted have submitted tens of thousands of pages explaining their business models and the incredible value that responsible data use provides to consumers.

Despite Years of Investigation, There Is No Harm

Here’s the key:  The Senate Commerce Committee and the GAO both failed to find any wrongdoing on the part of these businesses.   It very unfortunate that after receiving all of that evidence, and despite the fact that no harm has been discovered, Chairman Rockefeller continues to want to hamstring an industry that is the brightest beacon of American innovation – creating products and services that consumers love and demand – and the engine of the U.S economic and employment growth.

Data is the New Gold. DMA Will Educate Policymakers and Fight For Our Industry

A recent Data-Driven Marketing Institute study entitled, The Value of Data: Consequences for Insight, Innovation & Efficiency in the U.S. Economy, found that the data-driven marketing economy (DDME) added $156 billion in revenue to the U.S. economy and fueled more than 675,000 jobs in 2012 alone – and 70% of that value was dependent on the ability to exchange data across the economy.  The study,was conducted independently by Professors John Deighton of Harvard Business School and Peter Johnson of Columbia University, and found that the DDME was “made in America” and that the exchange of data across the DDME is vitally important for small businesses to compete effectively with big players and for innovation across the marketplace.  Senator Rockefeller and his fellow committee members quoted from the Value of Data study in the hearings in December, acknowledging the value of data-driven marketing to the economy and consumers.

DMA member are responsible marketers.  The entire DDME is subject to DMA’s longstanding and enforceable self-regulatory framework, the DMA Guidelines for Ethical Business Practice, and DMA has consistently demonstrated that self-regulation delivers robust yet flexible standards that adapt quickly to technological changes, provide robust and meaningful choices to consumers, and are an effective means of enforcing ethical standards on the data-driven marketing community.

DMA will continue to fight this bill and the potential harm to our industry.   However, we also believe in transparency as a foundational principle in responsible data-driven marketing. Our Data Protection Alliance of members and partners is developing new self regulation guidelines in this area, which we will release soon.

 

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