Companies Scramble for Consumer Data
Corporate competition to accumulate information about consumers is intensifying even as concerns about government surveillance grow, pushing down the market price for intimate personal details to fractions of a cent.
Over recent years, the surveillance of consumers has developed into a multibillion-dollar industry conducted by largely unregulated companies that obtain information by scouring web searches, social networks, purchase histories and public records, among other sources.
The resulting dossiers include thousands of details about individuals, including personal ailments, credit scores and even due dates for pregnant women. Companies feed the details into algorithms to determine how to predict and influence consumer behavior.
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Basic age, gender and location information sells for as little as $0.0005 per person, or $0.50 per thousand people, according to price details seen by the Financial Times. Information about people believed to be "influential" within their social networks sells for $0.00075, or $0.75 per thousand people. Slightly more valuable are income details and shopping histories, which both sell for $0.001.
According to industry sources, most people's profile information sells for less than a dollar in total. "You're not worth much," said Dave Morgan, founder of one of the first companies to use web surfing data to target online ads.
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As basic information on consumers becomes ubiquitous, data brokers are tracking down even more details. For $0.26 per person, LeadsPlease.com sells the names and mailing addresses of people suffering from ailments such as cancer, diabetes and clinical depression. The information includes specific medications including cancer treatment drug Methotrexate and Paxil, the antidepressant, according to price details viewed by the FT.
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LeadsPlease offers a discount for bulk buyers. The price of a record drops to $0.14 if a buyer purchases 50,001 to 100,000 names.
Another company, ALC Data, sells a list of consumers with specific ailments sorted by credit score. "In the current economy, targeting prospects who have good credit, bad credit or a lack of credit can dramatically affect results," the company states in its marketing materials.
Buyers of ALC's "MH2 Credit Ailment Masterfile" in the past 12 months include Blue Cross Blue Shield, the insurance group, mobile operator Sprint Nextel and TXU Energy, the Texas energy utility, according to usage details on ALC's website.
ALC also tracks more than 80 percent of all U.S. births and competes fiercely against other data brokers in the baby sector. The company recently unveiled a new "Newborn Network" database containing information about prenatal and postnatal mothers, as well as their aunts, grandmothers, close friends and neighbors. "It is a saturated market," says Lori Magill-Cook, an executive vice-president at ALC.
The U.S. Federal Trade Commission and a congressional committee are investigating the data broker industry to understand what these companies know and how the information is used. Few laws exist in the U.S. that protect the privacy of an individual's data.
The industry operates under self-regulatory guidelines, which bar the collection of information about children, specific health and financial data. Under the guidelines, the tracking and selling of information derived from medical records and prescriptions are allowed if patients' names and other identifying data have been deleted. LeadsPlease and ALC state that the patient-specific ailment information they sell is not sourced from such records, but has instead been revealed by the patients themselves.