CFPB Launches Long Overdue Probe Of Unaccountable Data Broker Market

Privacy

from the belated-and-likely-doomed-efforts-to-competently-regulate dept

We’ve noted for a while that the performative histrionics surrounding TikTok are really just a distraction from our corrupt failure to police dodgy data brokers or pass even a basic privacy law for the internet era. U.S. companies don’t want to lose money by empowering consumers or being ethical, and the U.S. government doesn’t want to get warrants for data it can buy cheaply from brokers.

As a result, story after story after story showcases how the intentionally convoluted data broker market now routinely traffics in all manner of sensitive consumer data, whether it’s your daily movements (say, the last time you visited an abortion clinic), your granular browsing habits, or even your mental health data. Any efforts to change this dynamic are quickly dismantled by data broker lobbyists, forcing the dwindling number of policymakers who actually care about this stuff to get creative.

The Consumer Financial Protection Bureau (CFPB), one of numerous privacy-adjacent regulators industry giants have attempted to lobotomize, has announced that it’s going to finally start conducting an inquiry into the data broker space, and whether any of these companies are violating the Fair Credit Reporting Act:

“Modern data surveillance practices have allowed companies to hover over our digital lives and monetize our most sensitive data,” said CFPB Director Rohit Chopra. “Our inquiry will inform whether rules under the Fair Credit Reporting Act reflect these market realities.”

Whether this actually results in anything substantive remains to be seen. Like most of the regulatory state, the CFPB has been under relentless attack by policymakers who like to pretend that letting giant, predatory companies and industries run amok results in near-mystical Utopian outcomes, despite two straight generations’ worth of data violently debunking the concept.

For decades data brokers have been hoovering up vast troves of sensitive consumer data, and selling it to any nitwit with a nickel. That’s resulted in just a steady parade of ugly scandals U.S. policymakers do little to nothing about. Post-Roe, it’s a problem that’s only going to get dumber and more dangerous, yet, by and large, federal leaders have proven too corrupt and captured to do literally anything about it.

Since there’s no meaningful U.S. privacy law for the Internet, and government regulators have pretty widely been lobotomized via corruption, most data brokers really don’t see much in the way of actual oversight or scrutiny. As such it’s fairly easy for them to brush off complaints simply by claiming that the sensitive data they collect is “anonymized” (a meaningless term).

Given that this data can easily be sold to any number of global governments (including Chinese intelligence), the myopic fixation on TikTok as somehow the most pressing of all tech policy issues, continues to be a massive distraction from the actual problem.

This is just the opening phase of a CFPB inquiry, and any substantive action could be years away, assuming it arrives at all. And like most such pursuits, any actual fine will likely be a pittance compared to the money made by being unethical. The CFPB says its request for information will be published in the Federal Register, and the public will have until June 13, 2023 to submit their comments.

Filed Under: abortion, cfpb, data brokers, location data, mental health, privacy, regulation, roe, social media, warrants