Acxiom part of FTC data-broker probe

The Federal Trade Commission on Tuesday opened an investigation into data brokers, the companies that collect and sell information about consumers for marketing and other purposes.

The agency issued administrative subpoenas to nine information resellers, requiring each company to provide extensive details about how it collects information about consumers; how it uses, stores, analyzes and shares that data; and whether the company allows consumers to access and correct the records the company holds about them. Some of the companies named in the inquiry do not directly sell information about consumers but offer analytics services in which they categorize, score or evaluate consumer data.

The companies include Little Rock-based Acxiom Corp., one of the world’s largest information resellers, which manages customer databases for major banks, automakers and retailers.

A statement from Acxiom spokesman Jonathan Portis said the company could not comment on the FTC request because it had not seen theletter. The statement also said Acxiom looks forward to cooperating with the FTC.

The investigation also includes eBureau, a company in St. Cloud, Minn., which, on behalf of clients like credit card companies, lenders, insurers and educational institutions, evaluates and scores online consumers in the market for those companies’ products; Intelius, a company in Bellevue, Wash., that offers people-search services and background checks; and PeekYou, a company that analyzes social media sentiment.

In an e-mail message in response to a reporter’s query, Gordy Meyer, the president of eBureau, wrote that the company “welcomes the opportunity to describe, to the FTC, its practices and the benefits we provide to businesses as well as consumers.”

Representatives of other companies did not immediately return e-mails from a reporter seeking comment.

“Data brokers aggregate huge amounts of data on individuals and have the capacity to create powerful profiles combining information about what you do offline and online,” David C. Vladeck, thedirector of the FTC’s Bureau of Consumer Protection, said Tuesday. “We worry that this information may be used in ways that could be harmful to consumers.”

In a statement, the Direct Marketing Association, an industry trade group, welcomed the FTC investigation, saying the results would highlight the “significant benefits” consumers derive from receiving marketing pitches that are based on information about their personal tastes and activities.

Yet some legislators and regulators say they are taking a harder look at the industry because of practices that are opaque to consumers.Unlike consumer reporting agencies, for example, which are required by federal law to show consumers their credit reports and allow them to correct errors in their own records, data brokers who collect and sell consumer information for marketing purposes are not required to give individuals access to the records those companies hold about them. In its report earlier this year, the FTC asked Congress to consider enacting regulations to give consumers some rights to data collectedabout them.

The FTC’s investigation represents at least the fourth inquiry into the industry this year.

In July, Reps. Edward J. Markey, D-Mass., and Joe Barton, R-Texas, co-chairmen of the Bipartisan Congressional Privacy Caucus, started an examination into the practices of nine data collectors. That investigation is continuing; the lawmakers held a public briefing in the House with executives from the companies last Thursday.

In October, Sen. John D. Rockefeller IV, D-W.Va., opened his own investigation into nine information resellers. (Each investigation involves different companies, although a few companies were included in more than one inquiry). The Government Accountability Office has also started its own research into the industry.

But the FTC’s 15-page administrative orders require each company to provide much more detailed information than the legislators asked for.

“We are going to get a huge amount of data,” Vladeck said. “We are going to get answers.”

Business, Pages 20 on 12/19/2012

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