By Kate Tummarello - 12/18/13 06:52 PM EST
Senate Commerce Committee members called for Congressional action on the issue of data brokers, or companies that track consumers online and offline for marketing purposes.
The hearing coincided with the Committee’s release of its report on data brokers, based on an investigation that began last year.
The Committee heard from witnesses that data brokers collect sensitive information to target ads to consumers outside of laws that govern sensitive information, such as laws regarding financial and health information.
Sen. Ed Markey (D-N.J.) called the testimonies “a real invitation for us to act.”
“There probably aren’t enough laws on the books to protect people against that.”
In a heated exchange with Experian Senior Vice President of Government Affairs Tony Hadley, Sen. Claire McCaskill confronted the data broker representative over reports from earlier this year that an Experian affiliate was selling consumer data to an identity theft operation.
McCaskill said reports such as those demonstrate the “desperate need for Congress to look at how consumers can get this information.”
Currently, consumers have to “sacrifice privacy as the price of admission to the Internet,” Sen. Richard Blumenthal (D-Conn.) said, comparing data broker tracking to government surveillance.
Consumers “privacy interests may be just as much at risk,” he said.
Committee Chairman Jay Rockefeller (D-W.Va) said data broker tracking is worse than government surveillance.
“I can’t prove its wrong, but there’s something lethal about” data brokers tracking consumers, he said. “There’s something unfair about it.”
Representatives of the data broker industry responded to these calls by citing the economic benefits of consumer tracking and self-regulations in the data broker industry.
Jerry Cerasale, senior vice president of government affairs for the Direct Marketing Assocation, pointed to an industry initiative that allows consumers to opt out of online tracking.
Sen. Cory Booker (D-N.J.) questioned the ad industry program, saying that he’s “a pretty tech savvy … guy, and I’ve never heard of this.”
Cerasale also cited a study from his group that found a $156 billion boost to the U.S. economy from “data-driven marketing.”
Consumer data “helps break down the barriers to entry so small business can come in and compete with the big boys,” he said.
Cerasale encouraged lawmakers to “focus on the improper use of data and figure out how to prevent the improper use of data” rather than limit the collection of data.
Hadley said tracking “brings lower prices and greater convenience to consumers.”
He pushed back on a proposal from the Federal Trade Commission that data brokers create a website that consumers can visit to see what information the companies have about them.
“I don’t know how to define data broker,” he said. “Everyone exchanges data and sells data. That is … the business model of the Internet.”
A comprehensive data broker website could include thousands of websites, which wouldn’t be meaningful to consumers, he said.