Feds say it's time to regulate Big Data

May 27, 2014: 3:00 PM ET
NEW YORK (CNNMoney)

For years, data brokers have been collecting and selling billions of pieces of your personal information -- from your income to your shopping habits to your medical ailments. Now federal regulators say it's time you have more control over what's collected and whether it will be used at all.

The Federal Trade Commission recommended the creation of a website that would provide us with the information we need to find out what data is being collected about us, where it came from and how to opt out entirely.

"Right now consumers have very little information, to the extent that they know at all, that these activities are taking place," FTC Chairwoman Edith Ramirez said in a conference call Tuesday.

Currently, data brokers scour public records, track the stores you shop at and the websites you browse (among other things) to collect your information and create consumer profiles.

The brokers then sell this information to marketers, retailers, banks and other companies so they can better target you for promotional offers, new products and other sales efforts.

Related: Big Data knows you're broke

The multi-billion dollar data broker industry has come under increased scrutiny in recent years by privacy advocates, federal regulators and lawmakers who say the process needs to be more transparent.

The FTC has found that many data firms operate "behind the scenes," buying and selling massive amounts of data, typically without our knowledge.

Your kids' test scores tracked online

One of the companies studied by the FTC, for example, stores information on more than 1.4 billion consumer transactions and adds 3 billion new data points to its database each month.

"The extent of consumer profiling today means that data brokers often know as much -- or even more -- about us than our family and friends," Ramirez said in a statement.

To increase transparency, the agency wants Congress to pass legislation that requires retailers to notify consumers when sharing their information and to make it harder to collect sensitive information, such as health data, by requiring "express consent" from consumers.

Related: Big Data is secretly scoring you

Senator John "Jay" Rockefeller of West Virginia, who heads the Senate Commerce Committee, has already sponsored legislation that mirrors the FTC's call to give consumers more control over their data.

But so far Rockefeller's bill has gone nowhere.

Last fall, data giant Acxiom (ACXM) launched a website that gives consumers a snapshot of the information it sells to retailers and marketers. The site allows consumers to correct some of the data collected about them and opt out if desired.

While 500 million people had visited the site as of this spring, only a small fraction had edited or changed their data or opted out entirely, Acxiom said at a conference in Washington D.C. in March.

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