The ad industry is weighing in against a Consumer Financial Protection Bureau proposal that could restrict data brokers' ability to sell certain types of financial information about consumers for ad targeting purposes.
The agency's proposal, issued in outline form in September, could expand the sweep of the Fair Credit Reporting Act -- a federal law that prohibits consumer reporting agencies from sharing information about people's financial circumstances except for specific purposes, including credit or insurance underwriting, job applications, and government benefits applications.
Specifically, one portion of the proposal would apply the law's restrictions to data brokers that sell information about people's payment history or income, and criminal records. Those companies would no longer be allowed to sell such data for advertising or marketing. Instead data brokers would only be allowed to sell that type of information for the specific purposes allowed by the Fair Credit Reporting Act.
That portion of the proposal would “severely hinder small and start-up businesses’ ability to find new customers, diminish and damage market efficiencies that exist today, and harm consumers by causing prices to rise,” the industry group Privacy for America said in comments filed with the agency Monday. Members of the group include the American Association of Advertising Agencies, Association of National Advertisers, Digital Advertising Alliance, Interactive Advertising Bureau and Network Advertising Initiative.
“If a data services company uses income information in combination with data provided from a client about an intended advertising audience, the proposal in the outline would make this process impermissible,” the group writes. “This is an absurd result of the overreach that the outline proposes, and the negative impacts of this approach would be felt more acutely by small businesses that rely on data services companies than their larger counterparts in the marketplace.”
The agency is also contemplating restrictions on the sale of aggregated or anonymized data.
Privacy for America argues that prohibitions on the use of aggregated data “would upend privacy protective practices that seek to understand how groups of consumers act instead of imposing meaningful protections for any individual consumer.”
The privacy advocacy group Electronic Privacy Information Center generally supports the agency's proposal.
“Today, data brokers construct deeply revealing dossiers of individuals’ personal information, both in terms of the breadth of data points included and the sensitive nature of much of that data,” that group wrote in comments filed Monday.
The organization added that information amassed by data brokers “is used to inform targeted advertising and influence consumer behavior.”
The privacy watchdog also argued that even data that's been aggregated or “nominally 'anonymized,'” could still be linked to individuals.
“For example, data pertaining to a neighborhood may not be covered by the [Fair Credit Reporting Act] because it may not be possible to link the data to an individual, but household- or device-level data is reasonably linkable to individuals,” the group wrote.