DMA Comments on FTC “Data Broker” Report:
Demonstrates Major Benefits to Consumers While Citing Only Theoretical Harm
Washington, D.C., May 27, 2014 – The Direct Marketing Association (DMA) today responded to the findings of a new report released by the Federal Trade Commission (FTC) entitled: “Data Brokers: A Call for Transparency and Accountability.”
“We appreciate the Commission’s ongoing interest on these issues. The calls for notice, choice and transparency are consistent with existing hallmarks of the ethical standards for our industry, which DMA has produced and enforced for more than 40 years,” Hudson said. “DMA members provide consumer protection through strong self-regulatory practices, specifically outlined in our Guidelines for Ethical Business Practice.”
“DMA has long supported transparency and choice for its members,” said Hudson. This is accomplished through our DMAChoice.org mail opt-out service and in collaboration with the Digital Advertising Alliance (DAA), which provides notice and choice to consumers concerning online behavioral advertising.
“One interesting thing about this report is that after thousands of pages of documentation submitted over the two years of thorough inquiry by the FTC, the report finds no actual harm to consumers, and only suggests potential misuses that do not occur,” said Peggy Hudson, DMA senior vice president of government affairs.
The FTC Report is the result of an investigation into the data broker industry, following reports by the Senate Commerce Committee and the Government Accountability Office released last year. The FTC went further than those reports, however, recommending specific legislative action. While recognizing the complexity of the data-driven marketplace, they contend that any bill attempting to regulate the industry should consider: Consumer access to their data (which could include a centralized online portal); Choice for both marketing and sensitive data; Disclosure of data sources; and Prominent notice of use of marketing data.
While the Report conflates marketing data with risk mitigation products, Hudson explained that existing self-regulatory protections and sectoral laws – like the Fair Credit Reporting Act (FCRA) – shield consumers from speculative harms and already ensure that these harms do not become a reality. Marketing data is used exclusively for marketing purposes. Data that influences eligibility decisions is currently regulated by federal law, notably the FCRA, Health Insurance Portability and Accountability Act (HIPAA), and Gramm-Leach-Bliley Act (GLB).
“DMA and its members look forward to continuing to discuss these important issues with the FTC,” said Hudson. “We are pleased to see that the FTC is endorsing the White House’s approach, recognizing the benefits of data.” The White House Report on Big Data issued last month emphasized the great value from data that improves the lives of consumers.
A recent Value of Data study commissioned by DMA’s Data-Driven Marketing Institute (DDMI), and independently conducted by Professors John Deighton of Harvard Business School and Peter Johnson of Columbia University, corroborated the importance of big data to the American economy. It revealed that the exchange of data across the Data Driven Marketing Economy (DDME) is vitally important for small businesses to compete effectively with big players and for innovation across the marketplace. Specifically, the study estimated that 70% of the DDME, or $110 billion in revenue and 475,000 jobs nationwide depend on the ability of firms to share data across the DDME. The DDME relies on strong-self regulation and the current harms-based approach of existing federal law to boost our economy. Any further regulation or legislation in this area could adversely affect the growing benefits our society enjoys from Big Data, Hudson said.
About Direct Marketing Association (DMA)
The Direct Marketing Association (www.thedma.org) is the world’s largest trade association dedicated to advancing and protecting responsible data-driven marketing. Founded in 1917, DMA represents thousands of companies and nonprofit organizations that use and support data-driven marketing practices and techniques. DMA provides the Voice to shape policy and public opinion, the Connections to grow members’ businesses and the Tools to ensure full compliance with ethical and best practices as well as professional development.
In 2012, the Data-Driven Marketing Economy (DDME) added $156 billion in revenue to the U.S. economy and fueled more than 675,000 jobs. The real value of data is in its exchange across the DDME: 70 percent of the value of the DDME – $110 billion in revenue and 478,000 jobs – depends on the ability of firms to exchange data across the DDME.
## ## ##