In 2019, the global data brokering market was valued at 232.634 billion USD. According to reports by Transparency Market Research (TMR), the market is expected to continue expanding at a compound annual growth rate (CAGR) of 6.8 percent over the next few years, reaching a value of 365.71 billion USD by the end of 2029.
The increasing adoption of big data, smart data, and business intelligence solutions from a variety of industries coupled with the global popularization of smart devices, social media, and the internet as a whole are fueling the rise of data broker companies.
What are data brokers?
As their name suggests, data brokers are companies dedicated to collecting data through the internet and public records to further provide or sell that information to other companies from various industries. Such data includes a person’s name, date of birth, age, gender, phone number, email address, location, interests, and buying habits. In some cases, data brokers might also know someone’s health status, income levels, and political views.
The data is then shared with other companies working in marketing, risk mitigation, health, and finance among others. A marketer might, for example, use a person’s interests and buying habits to target them with offers delivered to their invoice. Or, a bank might check a customer’s details while reviewing a loan application.
The privacy and ethical concerns posed by data brokering
In 2017, Equifax, one of the biggest data brokers in the United States, announced a data breach that exposed the personal information of 147 million people, including their names, dates of birth, and Social Security numbers. The data breach exposed the vulnerability of those whose information has been collected by similar entities. In general, the more a person’s information is on the internet, the greater the risk of falling victim to a leak or cyberattack.
In addition to the aforementioned privacy and security concerns, data brokers pose an ethical dilemma as the information they share is used without the owner’s explicit consent. In the majority of cases, the consent required to collect a person’s information is buried in the fine print of most websites’ privacy policies and/or terms and conditions.
However, the consequences of agreeing to such terms can be damaging. In the hands of a bank or financial company, a person’s financial history might be used without their knowledge to deny them a loan application. Or, someone’s health data can be assessed and used to set higher insurance rates. Data brokers like Experian, for example, are known to sell information to political parties, which use it to personalize online advertisements about any given political issue.
Existing strategies to opt out of data brokers
It is possible to remove personal information from a data-collecting site by filling out an opting-out form or contacting them directly via phone or email. Yet, it’s likely that this data will be acquired by the same brokers in the future. Furthermore, as there are reportedly over 4000 data brokers operating worldwide, someone’s data might have been collected by more than one of these companies.
Services like Incogni can send automatic opt-out requests and ensure that the information isn’t re-acquired.
Alternatively, it’s recommended to follow several preventive measures, such as avoiding loyalty schemes, setting social media accounts to private, using a VPN, and keeping the number of online accounts to a minimum.