Data Mining & Privacy: Who’s Watching Them Watch You?

by Robins Kaplan LLP

Data Mining & Privacy: Who’s Watching Them Watch You?

Recently, the Federal Trade Commission issued a detailed report that summarized extensive data collection efforts that it uncovered in its study of the data brokerage industry. The FTC recommended that Congress require the data broker industry to give consumers greater control over their personal information to police the questionable data practices the study revealed. 

Yet, just a few weeks later, a Wall Street Journal headline read, “Facebook to Give Advertisers More User Data.”  The article summarized Facebook’s efforts to vacuum up its users’ web browsing habits and sell that data to advertisers. According to media reports, Facebook collects web browsing histories by placing code on its users' computers, thereby gathering data about the websites its users visit. Facebook apparently also gathers data about which apps its users have downloaded onto their mobile devices.

Facebook’s sale of web browsing history demonstrates the steady growth of mining of customer data—and brings with it a number of questions about data mining, consumer rights, and data privacy.  Many assume that someone is regulating the space, protecting consumers, and providing a legal framework on which businesses can rely to guide legitimate commercial interests.   

Data mining’s big surprise? Right now, a substantial legal and regulatory void exists regarding data mining’s most critical privacy and business questions. 

Data collection: Harmless or harmful?

Data brokers collect and store billions of data elements covering virtually everyone in the United States.  Brokers collect and aggregate data regarding everything from shopping preferences to healthcare data to public records such as lawsuits and arrests. Often the nature of the information sold is disturbing: a list of individuals in financial distress, diabetics, smokers in the household, and political and religious affiliations.  Recent reports reveal utterly shocking data aggregation, for instance the identity of rape victims, AIDS victims, and people with addictions.  Frequently this information is gathered and sold without consumers’ knowledge.  As an FTC Chairwoman put it, “you may not know them, but data brokers know you.”

At first glance, some of the data these companies collect may appear fairly harmless.  For instance, software-generated groupings could simply label a person assumed to be a “biker enthusiast.”  That might lead to the individual receiving special offers from the local motorcycle dealer.  But that same person could also pay higher fees for life insurance because insurers reason that the person engages in risky behavior. 

The information gathered by data brokers poses a risk to consumers, including the denial of opportunities based on inaccurate information, public disclosure of information  many consumers regard as private (e.g. their health), or even something as menacing as stalking.  Moreover, storing vast amounts of aggregated data indefinitely may create security risks.

Regulating data mining

The opaque nature of how companies use consumer data to make credit, housing, employment, and similar determinations led to the passage of the Fair Credit Reporting Act (“FCRA”) in 1970.  The FTC has brought over 100 law enforcement actions under the FCRA since then, but huge portions of the data mining business fall outside the statute.

In February 2014, Senators John D. Rockefeller and Edward Markey[1]  introduced a bill to address those shortfalls. The proposed legislation would require data brokers to disclose more information about their practices.  It also would require brokers to give consumers more control over the information these companies collect and sell. 

In addition, the FTC has called for transparency across the data broker industry, providing more information about the sources of data brokers’ information, and giving consumers access and the ability to correct data used for marketing and risk mitigation products.  Other proposals encourage data brokers to be more accountable by conducting due diligence on their customers’ use of the data, and creating contractual requirements that prohibit their customers from using the data in an unlawful manner.

The data broker industry generally opposes the proposed legislation, asserting that effective self-regulation is the preferred solution in an industry that is changing quickly and growing rapidly.   Yet many caution those collecting, aggregating and selling data to take steps to get out ahead of legislative and regulatory efforts.  The absence of standards only serves to lead to further abuses and unwanted media attention—all of which could easily create a backlash against the industry. 


Tremendous benefits can flow from the insights of data mining—especially as powered by new big data technologies.  But a backlash of consumers offended by the continued encroachment on their privacy, coupled with the risks of long-term storage of that data, could easily lead to upending business models based on fluid use of consumer’s data.  A proactive effort to regulate data collection and aggregation efforts is more likely to preserve the beneficial insights and opportunities data mining has and will continue to offer. 

[1] Democrat of West Virginia and Democrat of Massachusetts, respectively

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Robins Kaplan LLP | Attorney Advertising

Written by:

Robins Kaplan LLP

Robins Kaplan LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.