How Should We Regulate the Giants of Data Collection?


By Paul RosenzweigThe George Washington University Law School

Search engines and other Web services owned by the giants of data collection open up the world to you and frequently it don’t cost you a penny. When you click on a link, or search the Web, or send an email and a company collects data about you, they will be marketing that data to others. You are the product.

Screenshot of a search box for images
Using search engines like Google actually has a price even though we think it’s free. (Image: Creative Instinct/Shutterstock)

Is Google Actually Free?

What looks like a free service—Google Search, for example—isn’t free. You’re giving Google, or whatever your search engine of choice is, something of value in exchange—knowledge of who you are. And that, in turn, leads to getting something of value in return. You get the search service without having to pay for it.

So, the flip side of thinking about data brokers marketing you is to ask yourself this question: How much would I pay per Google search if it were charged to me and if I had to pay for the service?

Frankly, we wouldn’t know how to value Google search—free email, cloud storage, or favorite apps. But we do know that instead of paying cash, we get them all for free; and in turn, the host service learns something about us, as well. So far, it’s been a pretty good deal for each of us.

This is a transcript from the video series The Surveillance State: Big Data, Freedom, and YouWatch it now, on Wondrium.

Giants of Data Collection Need to Be Regulated

As one presidential review of data collection put it, “The velocity, volume, and variety of data collection are increasing all the time.” To give you some idea of just how big this market is, consider this: The commercial data broker Acxiom claims to have collected 1,500 data points per person—on average—on 700 million consumers. 

It analyzes and markets information about your lifestyle and personal preferences to its partners and customers—companies like Macy’s. The information Acxiom collects ranges from major life events like a wedding or a baby’s birth to your browsing history and shopping habits. 

It has also begun business relationships with social media giants like Facebook and Twitter. If you wondered, it’s a billion-dollar-a-year business for Acxiom alone. So let’s think about that. How should we regulate this market?

Federal Trade Commission Has Some Ideas

The Federal Trade Commission (FTC) has recommended that consumer data brokers be more transparent and give consumers greater control over their personal information. The FTC chairwoman at the time, Edith Ramirez, said:

An image of the FTC building in Washington, DC.
The FTC has recommended that consumer data brokers be more transparent. (Image: Kurt Kaiser/Public domain)

We found that data brokers collect billions of pieces of data on nearly every American consumer, often merging online and offline information—Ramirez said—Data brokers are also making potentially sensitive inferences about consumers—about their health, financial status, and ethnic backgrounds. And consumers have little if any window into this process, let alone meaningful control or choice about how their data is shared among businesses.

In response to that problem, the FTC said that Congress should consider enacting legislation to make data broker practices more visible to consumers and to give consumers greater control over the immense amounts of personal information about them collected and shared by data brokers. That was the start of a campaign to increase government control over data–broker activities.

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What’s Next for Data Regulation?

Image of a keyboard with a Google button instead of the enter button
It’s difficult to place collection limitations on new technologies. (Image: Jane0606/Shutterstock)

So, where will this lead? What’s likely to happen in the next few years? At least two results seem certain to follow. First and foremost, the growth in regulation of data brokers is part of a broader trend to regulate and control the collection of data generally. The arc of the law and policy is increasingly in favor of regulated data collection, analysis, and use. As the general counsel of Microsoft has put it, “Data will soon become a regulated commodity.”

Second, in the consumer context, expect that regulation to rely on something called the principle of responsible use. Responsible use is the idea that instead of focusing on privacy protection efforts and anti-collection rules, the appropriate focus is on rules relating to analysis and use. 

The rationale behind the idea is that it’s becoming increasingly difficult to place collection limitations on new technologies. As a consequence, data brokers and cloud storage providers can no longer be effectively regulated through restrictions on their tools of collection. That’s because collection limitations fundamentally destroy the value of big data aggregation. 

The whole point of data collection is to discover something new and different. As the White House Council of Advisors for Science & Technology said, “Limits on collection defeat the positive benefits that big data enables: new, non-obvious, unexpectedly powerful uses of data.”

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We Haven’t Got to the Hard Part Yet

Inevitably, this will mean data brokers—and those who store data for the brokers—will be scrutinized for how they use the data they collect. Former secretary of Homeland Security Michael Chertoff and one of his senior advisors, Mary DeRosa, have written that the right way to gauge privacy protections is through consumer expectations.

We need a flexible conception of responsible use that responds to the context in which data is provided. We all assume, for example, that the data we provide to an app developer can be used to improve the app we’ve purchased. By contrast, we have a much higher expectation of privacy when that data is collected by the app developer and traded to third parties.

The FTC’s regulation of commercial data brokers is just beginning. Increasingly, aggregators who collect data from consumers will need to be careful how they use it. Because if they aren’t careful, they can anticipate a challenge from the government.

Common Questions about How We Should Regulate the Giants of Data Collection

Q: How can we use search engines for free?

We may not purchase these services directly, but the giants of data collection who own these Web services know that the data we provide them about ourselves is valuable to other companies.

Q: What’s the FTC’s recommendation for data collection regulation?

The FTC has recommended that the practices of the giants of data collection or any smaller companies that collect data become more transparent so people can actively choose whether they want to share that information or not.

Q: How can consumer expectations gauge privacy protections?

The data aggregators have to realize that if they are allowed to collect data, they have to use it responsibly. This means that consumers will expect data gathered by a company is used to improve that companies services.

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