All That Data, All That Secrecy

Big Brother may know who you are, but do you know who Big Brother is? If you showed up at the Federal Trade Commission’s workshop on the privacy implications of database marketing Tuesday, the answer is probably still no. The Commission took a hard look at the likes of Acxiom and Abacus, massive marketing databases that cover the purchasing habits of at least 90 percent of America’s 100 million households.

WASHINGTON — Big Brother may know who you are, but do you know who Big Brother is?

If you showed up at the Federal Trade Commission’s workshop on the privacy implications of database marketing Tuesday, the answer is probably still no.

The Commission took a hard look at the likes of Acxiom and Abacus, massive marketing databases that cover the purchasing habits of at least 90 percent of America’s 100 million households.

Little is known about the databases, but privacy advocates have made hay of gaffes such as the subpoenaing of Monica Lewinsky’s book purchases by special prosecutor Ken Starr and sporadic problems with prisoners who have handled databases from jail. So they repeated their call to open the databases today, despite the absence of nearly every major marketing database vendor in the United States.

“I think it’s a major disservice to the FTC and to the public if companies like Acxiom don’t appear to explain what they do,” Privacy Times publisher Evan Hendricks said.

Still, lobbyists pointed with pride to industry-funded studies (PDF) that claim databases lead to lower prices and more variety for consumers. And they promise more, soon.

“We don’t have a lot of information,” said Rick Lane, a lobbyist for the U.S. Chamber of Commerce. He urged FTC officials, now entering their seventh year of privacy probes, to go slowly. “We don’t have the facts, but we’re all saying the same rhetoric we’ve been saying for five years now.”

Privacy advocates, already badly outnumbered at the session, had seized on the issue of database secrecy even before the workshop began.

In a series of letters, e-mails and faxes sent late last month, Jason Catlett, president of Junkbusters Inc., asked 66 corporate executives who favor databases and make use of them — in other words, his opponents — to submit their own marketing dossiers for examination.

If they said no, he reasoned, it would show that even the masters of the marketing worried about privacy. If they said yes, however, it would reveal that database companies granted individuals working with the industry access to information that the common consumer is denied.

Catlett also asked database company Acxiom to open all consumer records for examination by their subjects.

“The direct marketers are hiding behind their one-way mirrors,” Catlett said. “I wanted to turn that one around.”

Eight of the 66 — including DoubleClick chairman Kevin O’Connor — gave qualified “yes” responses, which typically asked that Catlett not break the law in gathering information. Acxiom said releasing the information would violate privacy, even with consent of the target.

“Aside from the obvious potential to embarrass the targeted survey individuals by making a public disclosure of certain nonpublic information, I would suggest that your discussion at the FTC Workshop focus on the types of information you gather rather than the individual details of your collection efforts,” Acxiom chief privacy officer Jennifer Barrett wrote Catlett.

Earlier Tuesday, I-Behavior Inc. president Lynn Wunderman showed how her company melded online and offline profiles that companies could use to determine the best ways to sell to Internet-connected customers. Wunderman was careful to explain that her company combined purchase data from retailers but did not track people’s Web movement with cookies or any other sort of technology.

Later, Michael Pashby, president of the Magazine Publishers Association, told the crowd that publishers were careful to protect privacy. But he passed when activist Evan Hendricks suggested consumers ought to be able to opt out of marketing lists by just marking a check box on subscription forms.

“Any time you give people an option, response declines,” Pashby said.

The workshop showed how companies that gather information about customers can swap it with others through clearinghouses such as Abacus, which supplies the demographic muscle behind more than 1,500 mail-order catalogs. In effect, anyone can buy a database and send it off to one of hundreds of companies in the United States that would add still more specifics about, say, 40-year-old men who drive Nissan Maximas and live in the suburbs of the nation’s 10 largest cities.

But getting more may prove to be tough, as long as the companies that assemble the databases refuse to show.

Ron Plesser, an attorney for the Direct Marketing Association, conceded that pro-privacy forces have turned up the heat. But he said that legislation is not in the cards to control what the companies do — not just yet anyway.

The DMA, he said, is looking “at a lot of things” to keep people happy with the job direct marketers are doing.

Bob Smith, publisher of Privacy Journal in Providence, R.I., agreed the FTC would go slow on the database vendors.

“They interviewed me about this a couple of months ago, and this really seems like 1992 stuff,” he said. “It really is not cutting edge. If they wanted to publicize the horror stories, they know where to find them. They really don’t want privacy experts to come in and point out the flaws in these systems.”

Author: Will Rodger

News Service: Wired News

URL: http://www.wired.com/news/politics/0,1283,42406,00.html