Big Data Gets Bigger: Consumer and Privacy Groups Call on FTC to Play Greater Role in Data Mergers/ Investigation and Public Workshop Needed
By: Jeff Chester | Feb 6 2015
Washington, DC: The Center for Digital Democracy (CDD), along with U.S. PIRG, Consumer Watchdog, and Public Citizen, called on the Federal Trade Commission to launch an investigation into the impact on the American public of growing consolidation in consumer offline and online data sources and digital marketing applications. The groups also asked for the FTC to hold a public workshop focused on ensuring Americans receive 21st century safeguards protecting their privacy in online transactions, and a truly competitive marketplace.
The letter comes after the approval by the Department of Justice of the “Big Data”-driven acquisition by the Oracle Corporation of data broker Datalogix. The merger—announced in late December and approved just three weeks later—would create, in Oracle’s words, “the world’s most valuable data cloud” for digital marketing, connecting and unifying “a consumer’s various identities across all devices, screens and channels.” The deal is the second recent major data broker acquisition by Oracle, which purchased leading online consumer information firm BlueKai last year. The Oracle/Datalogix transaction should have triggered involvement by the FTC, given its expertise on the digital data industry, the groups noted.
The letter to FTC Chairwoman Ramirez also underscored that the Oracle/Datalogix merger raised serious privacy and consumer concerns, which required scrutiny by the Bureau of Consumer Protection as well. The combined companies’ datasets include financial, racial, location, and other sensitive data, as well as issues involving the EU/U.S. Safe Harbor agreement and the Google and Facebook Consent Decree settlements. The merger also implicates a number of consumer-protection matters, such as financial marketing and auto sales, where the FTC has a congressional mandate to protect the public.
The group’s letter to the FTC (attached below) provides an inside look at the role of consumer data in today’s digital marketplace, in which companies not only amass enormous amounts of information on consumers’ online and offline activities, but exchange that information with partners and affiliates for the purposes of analytical scrutiny and personalized targeting. “This transaction,” the letter explains, “highlights the crosscutting dimensions of the contemporary ‘Big Data’ digital marketplace, where competition and consumer-protection issues are intertwined.”
“The American public deserves to know how the consolidation and use of their information affects their daily lives,” the letter concludes, “from the prices they pay and the services they are offered to what this transaction means for their privacy. We urge the FTC to develop a more effective approach to identifying new problems and threats to competition and consumer protection in the Big Data era.”
“The Oracle/Datalogix deal reflects the digital data ‘arms race’ underway where companies are amassing powerful and detailed sets of information to track and target a consumer anywhere, anytime,” explained Jeff Chester, CDD’s executive director. “Control over an individual’s information, and the capabilities to use it effectively in today’s Big Data era, are falling into fewer hands. Unfortunately, these critical mergers suffer from ‘premature approval syndrome,’ sanctioned by regulators without adequate analysis and discussion. As the country’s chief regulatory agency protecting privacy and the online consumer marketplace, the FTC needs to show greater leadership by fostering 21st Century safeguards.”
“Our letter also urges antitrust authorities to update their market analysis to reflect that digital markets aren’t the same as markets for groceries or steel,” said Ed Mierzwinski, consumer program director for U.S. PIRG. “21st century markets need a 21st century analysis that takes into account the unique ways that fewer, bigger firms leverage even greater market power over consumer data through partnerships and joint ventures.”
“The Oracle/Datalogix deal is an example of how powerful companies are amassing unprecedented amounts of data, distorting traditional markets, limiting competition and consumer control,” said John M. Simpson, Consumer Watchdog’s Privacy Project director. “The FTC needs to act quickly and decisively to ensure its regulatory procedures keep pace with the threats of 21st century data-driven markets.”
“As evidenced now by Oracle’s acquisition of Datalogix, a handful of Data Titans hope to aggregate personal and private data about everyone, so they know where we go, what we do, whom we see, what we want, what we think and what we say,” said Rob Weissman, president of Public Citizen. “The marketers’ intrusion on our privacy is vastly outpacing public protections, or even public awareness. Consumer protection authorities need to take a very hard look at the Oracle deal and industry concentration more generally. There’s no reason for us to be racing toward a dystopian future of total surveillance.”