Data brokers

Data brokers are companies that collect, aggregate, analyze, and sell personal information about consumers without having a direct relationship with those individuals. These companies operate largely behind the scenes of the digital economy, accumulating vast databases of consumer information from both public and private sources to create detailed profiles used primarily for marketing, risk assessment, and other business purposes.

How they work

Data brokers obtain personal information through various channels:

• Collection from public records (court records, property records, voter registrations)
• Purchase of consumer data from other companies (retailers, financial institutions, social media platforms)
• Scraping of publicly available information from websites and social media
• Inference of additional data points through analysis and algorithms
• Tracking of online behavior through cookies, device fingerprinting, and other technologies

Once collected, this data is processed, combined, and categorized to create detailed consumer profiles. These profiles are then sold or licensed to third parties for various purposes, including targeted advertising, credit decisioning, insurance underwriting, and fraud prevention.

Consumer impact

Privacy erosion

Data brokers collect and process vast amounts of personal information, often without consumers' knowledge or meaningful consent. Many consumers are unaware of the extent of information being collected about them, who has access to it, or how it's being used. This creates a fundamental asymmetry of information and power between data brokers and consumers.

Limited transparency and choice

Consumers typically have minimal visibility into data broker practices and limited ability to control the collection and use of their personal information. Unlike direct business relationships where consumers can choose to engage with a company, data brokers collect information about consumers without establishing a direct relationship, making it difficult for individuals to exercise choice regarding their data.

Potential for discrimination

Data broker profiles can potentially enable discriminatory practices when used for decisions regarding credit, insurance, employment, or housing. By categorizing consumers based on various attributes, data brokers create segments that can serve as proxies for protected characteristics like race, religion, or socioeconomic status, even when those characteristics aren't explicitly identified.

Security vulnerabilities

The consolidation of large volumes of personal data creates security risks. Data brokers become attractive targets for hackers, and breaches of these vast repositories can expose sensitive personal information of millions of consumers, leading to identity theft and other forms of fraud.

Examples of major data brokers

Acxiom/LiveRamp

LiveRamp (formerly Acxiom) is one of the largest data brokers globally, maintaining detailed profiles on hundreds of millions of consumers. The company's data onboarding services connect offline customer data with online identifiers, enabling cross-device tracking and targeted advertising. LiveRamp has faced criticism for its extensive data collection practices and the creation of unique identifiers called "RampIDs" that connect individuals' online and offline identities without transparent consumer consent.

Experian

Beyond its role as a credit reporting agency, Experian operates as a major data broker, offering marketing services that leverage vast amounts of consumer information. Through its Experian Marketing Services division, the company provides audience segmentation, targeting, and identity resolution products based on consumer data.

Oracle Data Cloud

Oracle Data Cloud (formerly BlueKai) provides data services that help marketers target consumers across digital channels. The platform processes trillions of data points monthly from various online and offline sources to create detailed audience profiles. In 2020, Oracle faced scrutiny after security researchers discovered billions of records from its BlueKai database had been left exposed on an unsecured server.

See also

• LiveRamp