Editor’s Note: The data brokerage industry has emerged as a multi-billion dollar force, fundamentally reshaping how information is collected, sold, and used. As data privacy concerns intensify, professionals in cybersecurity, information governance, and eDiscovery must understand the risks and opportunities posed by this rapidly evolving sector. Companies like Experian, Equifax, and Acxiom wield vast amounts of personal data, often without user consent, raising significant questions around security, privacy breaches, and regulatory oversight. With the growing importance of data wrangling tools and biometric technologies, businesses face an urgent need to balance innovation with ethical and legal responsibilities. This article provides crucial insights into the current state of the data brokerage industry and highlights the critical considerations for professionals navigating this complex landscape.
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Industry News – Data Privacy and Protection Beat
Data Brokerage Industry Under Scrutiny Amid Privacy Concerns
ComplexDiscovery Staff
The data brokerage industry, a multi-billion dollar behemoth, is becoming increasingly scrutinized as concerns about privacy violations and ethical breaches grow. Companies like Experian, Equifax, and Acxiom are on the frontlines, aggregating vast amounts of data from various sources and selling it for profit. This process often involves collecting data without user consent, leading to significant concerns about privacy, security, and how this data is ultimately used. Current estimates place the number of worldwide data brokers at around 5,000, with over 1,700 registered in the United States alone.
Experian, arguably the largest data broker in the U.S., maintains a consumer database of over 300 million individuals and 126 million households. The company’s ConsumerView U.S. database provides potential buyers with insights into demographics, interests, behaviors, and credit information. Similarly, Equifax’s centralized employment and income verification service, known as The Work Number, had over 136 million active records in 2021.
Acxiom, now known as LiveRamp, holds data on approximately 260 million people and has operations in more than 60 countries. Acxiom’s extensive reach demonstrates the global scale of data brokerage, with 20,000 servers collecting data on 700 million individuals worldwide. These figures stress the value placed on consumer data and underline how the industry remains lightly regulated.
Companies like TargetSmart and i360 focus particularly on voter data, with TargetSmart claiming to provide access to over 171 million cell phone numbers and a wide array of voter information. i360 boasts data on more than 270 million U.S. adults and predictive models that include voting history and political affiliations. Alarmingly, research indicates that only about 50% to 60% of data broker data is accurate, raising significant concerns about its potential misuse.
The industry’s growth poses various risks, including privacy violations, unwanted ads, data breaches, and even criminal activities like phishing and identity theft. The situation is exacerbated by the lack of transparency, with consumers often unknowingly having their data collected and sold. Privacy laws lag behind these rapid advancements, making legislative action crucial.
California, Vermont, and Oregon have begun to tackle these challenges by requiring data brokers to register with state authorities. California, home to leading data brokers like Experian and CoreLogic, has enacted laws demanding greater transparency from these companies. Similarly, Vermont, the first state to enact data broker legislation, requires yearly registration and transparency about data practices.
Mississippi and Kansas stand out as the best states for privacy, with notably low cybercrime rates and strong consumer protection laws. On the other hand, states like Alaska and Nevada struggle with high rates of cybercrime and weaker privacy protections. These disparities highlight the uneven landscape of data privacy across the United States.
The increasing demand for advanced data wrangling tools and techniques also plays a significant role in shaping the industry. The global data wrangling market, estimated at $2.2 billion in 2023, is projected to reach $7.9 billion by 2030. Effective data wrangling ensures that raw, messy data can be transformed into valuable insights, driving strategic decision-making and operational efficiency. However, the sheer volume and variety of data, along with the need for privacy compliance, present considerable challenges.
Despite the risks, the need for accurate, well-prepared data will only grow. Companies are increasingly investing in data wrangling solutions to meet regulatory requirements and improve data quality. As such, businesses must balance the benefits of data-driven insights with the ethical and legal responsibilities of handling consumer data.
Biometric authentication is another area showing promise for improving data security. With technologies like facial recognition and fingerprint scanning becoming more prevalent, industries can leverage these advancements to enhance payment security and reduce fraud. Already, companies like J.P. Morgan and Amazon are implementing biometric solutions to streamline transactions and protect user data.
As data continues to be a crucial commodity, the business world must navigate the delicate balance between innovation, privacy, and ethical data management. Legislative measures and advanced technologies are essential in setting a path forward that protects consumer privacy while allowing businesses to thrive in a data-centric world.
News Sources
- Data Broker Statistics and Trends
- Data Wrangling Strategic Business Report 2023-2030: Growing Focus on Predictive Analytics Enhances Need for Robust Data Wrangling Tools
- After yet another data breach, how can you protect yourself?
- Beyond Passwords: How Biometrics Revolutionize The Payments Landscape
- AI Readiness Requires A Unified Data Architecture
Assisted by GAI and LLM Technologies
Additional Reading
- OpenAI and Anthropic Collaborate with U.S. AI Safety Institute
- 56% of Security Professionals Concerned About AI-Powered Threats, Pluralsight Reports
Source: ComplexDiscovery OÜ