Data brokering & the marketplace you didn't sign up for
S1E26 | Highlights and impact of this week's top tech themes.
Hi, Friends —
✰ Welcome to [our digital disco]! For those celebrating, I hope you had a lovely Thanksgiving holiday.
Today’s special release explores data brokering and its impact on national security. You can also check out my last newsletter here.
Imagine your most personal data — your name, family members, address, financial details, and more — becoming currency in a marketplace you didn't sign up for.
This is the concept behind data brokering, a practice in which brokers accumulate personal data and sell it to interested parties. Most individuals aren’t aware this market exists, nor have they given consent for their data to be sold.
The data industry has become a lucrative, shadowy sector in the digital landscape. This week in [our digital disco], we’re exploring how the data market has come to be, and some particularly-concerning consequences threatening national security.
Let’s dive in.
☞ What is data brokering?
Data brokering is the collection and sale of digital, personal information—including names, addresses, geolocation, financial information, even details about one's health and family.
The origins of data brokering can be traced to the digital revolution: As the internet advanced, more and more aspects of our lives became digitized, creating a vast landscape of data that could be harvested and exploited. Data brokers operate within legal bounds in many countries, including the United States, where regulations have struggled to keep pace with technological advancements.
Companies engaged in data brokering compile information from varied sources, such as public records, social media, online transactions, and surveys. Brokers then sell this aggregated data to a wide range of clients, including marketers, advertisers, financial institutions, governments, and even criminal groups who can profit from this data. The data brokers themselves are also a diverse crew. Some are specialized firms dedicated to this practice, while other participants include massive corporations, seeking to monetize the vast data they accumulate. Major players include Oracle, Equifax, Experian, CoreLogic, LexisNexis, and Verisk.
Why does it matter? The erosion of personal privacy raises concerns about identity theft, targeted advertising, and even national security risks (more on that below). The lack of comprehensive regulations also allows data brokers to operate with minimal transparency, leaving individuals vulnerable to the potential misuse of their personal information.
Pros: Businesses can potentially benefit from data brokering by utilizing insights gained from aggregated and anonymized data to inform strategic decisions, enhance marketing strategies, and improve customer experiences. By understanding consumer behaviors and trends, companies can tailor products and services, optimize advertising campaigns, and increase operational efficiency.
Cons: Perhaps the most pressing security concern is that of data exploitation. Companies can exploit brokered data to bombard individuals with targeted advertisements, shaping their preferences without their informed agreement. Malicious actors may engage in identity theft, leveraging the acquired personal information for fraudulent activities and causing financial harm. Cybercriminals also exploit the data for phishing attacks on individuals, companies, or government agencies. Finally, if sensitive data about citizens or military personnel falls into the hands of non-allied nations or state-sponsored entities, this information might be exploited for intelligence purposes, allowing adversarial countries to gain insights into the strengths, weaknesses, and strategies of the U.S. populace and military.
☞ A visible threat to national security
Data brokers exploit everyday internet users through the trade of personal information without explicit consent. An even more pressing concern emerges when we consider the data specific groups. Researchers at Duke University recently highlighted the alarming ease with which brokers transact sensitive information about U.S. military personnel, presenting a significant threat to the personal safety of these individuals, their families, and national security overall.
Shockingly, U.S.-based data brokers are peddling this information for as little as $0.12 per record, raising serious concerns about the privacy and safety of military personnel. The researchers uncovered the extensive availability of personal information, even regarding individuals' children and homeowner status. The brokers also failed to vet the buyers — increasing the potential for personal or classified data to fall into the wrong hands. Finally, data brokers incentivize bulk purchases; in other words, buyers save money by buying personal records en mass. This economic model further underscores the need for robust regulations to protect individuals from unauthorized access to their personal information.
Data brokering has thrived amid an environment marked by lax regulations. The historical trajectory showcases a steady expansion from individual data points to comprehensive profiles, revealing a landscape where personal information transforms into a lucrative commodity.
Looking ahead, the absence of robust regulatory frameworks poses a continued risk of exploitation, with individuals, particularly marginalized groups, remaining especially susceptible. The challenge lies in striking a balance between leveraging data for beneficial advancements while mitigating potential societal harm. There have been a number of legislative efforts presented to help mitigate data brokering spanning across the Federal Trade Commission, Congress, and individual states. No comprehensive bill has been passed, however, to prevent illegal use and sharing of sensitive consumer data and address evolving data broker practices.
The trajectory of data brokering's past and future converge on the critical need for comprehensive, forward-thinking regulations. Crafting ethical guidelines to govern data usage becomes imperative to navigate the evolving landscape responsibly. Acknowledging the power dynamics inherent in data brokering and addressing concerns related to privacy, security, and potential societal inequalities will shape a future that could maximize the benefits of data-driven innovations, while minimizing the risks associated with unchecked exploitation.
✿ As always — any and all feedback is welcome! In the meantime, give someone a hug and say an ‘I love you’ this week. Make the world a little happier.