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Government Cracks Down on Big Data Companies

Tuesday, 18 Dec 2012 | 3:36 PM ET
Brand X Pictures | Getty Images

The government is going after an industry that has long been hiding in the shadows, collecting your personal information and selling it for profit without your knowledge -- the data broker business.

The Federal Trade Commission is investigating how nine data brokers obtain and use information about consumers, the agency said Tuesday.

Data brokers, which collect and sell consumers' personal information, came under fire earlier this year when the FTC pushed the industry to have more transparency in their business practices. Now, the agency is taking further action by asking nine companies to disclose details regarding where they get consumer information, how they share that data and how they are allowing consumers to access their own information that is being sold.

The companies are Acxiom, Corelogic, Datalogix, eBureau, ID Analytics, Intelius, Peekyou, Rapleaf and Recorded Future.

Currently, data brokers are not required by law to disclose to consumers what information they obtain or how they are using it. Consumers don't even have the opportunity to correct misinformation that may be collected about them.

Yet data brokers sell the information they harvest about consumers—everything from online and offline behavior to household incomes and shopping habits—to different companies in various industries, including marketing companies.

While there are laws that regulate how data collected by these brokers are used in some cases, including employment and insurance instances, there is little regulation in tracking consumer behavior.

"Consumers are often unaware of the existence of data brokers as well as the purposes for which they collect and use consumers' data," the FTC said in its statement posted on its website. "This lack of transparency also means that even when data brokers offer consumers the ability to access their data, or provide other tools, many consumers do not know how to exercise this right."

Consumers may have never heard of data brokers like Acxiom, but they have probably heard of some of their partners.

According to the Acxiom's website, it partners with companies including Yahoo, Google and Microsoft to help its clients better target consumers. And Datalogix partnered with Facebook earlier this year to track effectiveness of ads on the social site.

Acxiom and Corelogic both said in statements to CNBC that they look forward to cooperating with the FTC. The other seven companies being investigated did not immediately respond to a request for comment.

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