Harvesting data and selling profiles : the shadowy world of Data Brokers
Acxiom, Experian, Epsilon, CoreLogic, Datalogix and PeekYou, those are companies whose names are vastly unknown to the general population. But for those companies, the general population has very little secrets. They are called data or information brokers, and their business model is as simple as it is occult : harvesting as much data as possible, about pretty much anyone, crossing and enriching that data in order to draft as many different profiles as possible and selling those profiles to third parties. In order to better understand this business as shadowy as lucrative, sometimes operating in grey area of the data protection laws of many countries, it’s time to have a serious talk about data brokers.
A lucrative business, built on harvesting data
With a market revenue estimated at 200 billion dollars yearly, and a growth predicted to increase exponentially in the next years, the data broker industry is nothing to scoff at. If those companies seem keen on staying outside the scope of public scrutiny, the raw materials used to bolster their income is relatively transparent : the data, any data, from as many sources as they can, and from every person possible.
At their core, those companies live and die by their ability to collect personal data : names, mail, physical adresses, and telephone number, but also income, investments and real estate owned, age, gender and opinion, consumer habit, sexual orientation and political affiliation. And once that « Big » data is collected, their work truly begin.
Crossing as many entry point as they can about every person they collected data about, those companies proceed to « enrich » the digital file linked to a specific name. Then, those entry points are linked, and the different files about those very real persons -like you and me- are merged to create a general profile, with the use of a hefty dose of algorithms.
The raw materials transformed, it’s now time to wrap up the final product.
The art of profiling, in the name of marketing
Selling a single « point » of data, like a name or a telephone number linked to nothing else, is not very lucrative. Selling as much information as possible about an identified person can be marginally better. But the real money comes from a different scale of information, with the use of the aforementioned profiles the data brokers previously cross-referenced.
Through their collection and enrichment of data, those brokers can accurately draw some finely tuned profiles, including elements such as age, ethnicity, socio-economic background, political opinions, and consumer habits. And by merging those profiles together, they can built an extensive database of groups and sub groups including very real, very tangible persons that share many similarities. And those databases are worth a very high amount of money, especially to marketing companies.
Indeed, why bother with general ads that will reach many people but incite only a few persons to buy the product advertised, when you can have precisely targeted ads that will maximise the effect of your ad campaign ? This is profiling, and this is why those companies are making billions.
With the use of algorithme, fuelled by the sheer amount of information freely given on social networks by nearly every person on the planet, collected and aggregated by the data brokers, it seems the targeted ads have never been smarter.
As an exemple, did you ever wonder how you sometimes find an ad for a product you just talked about, not a few minutes ago ? This is not unlawful wiretapping, nor is it some technological mind reading.
This is profiling done right (or very accurately but extremely wrong, depending on your opinion on the matter).
An industry fuelled by misgiven consent and grey areas of privacy laws
With their never ending quest to collect and process as much data as they can, one could only wonder how lawful those business practices truly are. Surprisingly, it seems that those data brokers tend to comply with regulations or, perhaps more accurately, smartly dance around those.
After all, there is no shortage of data freely given on the internet, by people who don’t really want to read all terms of services of every website and every application. By giving their consent without prior thought, those people are unaware that they contribute to a thriving market they don’t even know about, a market where they are both the final target and the main product.
Moreover, some of those companies could very well abuse one of the basis of data processing present in the GDPR : the legitimate interest, which could be a way for them to bypass the need to ask the consent of the person concerned by the enrichment, the processing and the sale of their personal data.
All in all, even if this industry could somewhat operate in the confine of the different data protection laws, it wouldn’t be such a bad thing to shine a light on those companies, in order for the general public to be better informed of the fate of their data.
Or perhaps, to prevent the birth of the next Cambridge Analytica.