The Business of Personal Data Brokers and Online Privacy

by August 2, 2018

ProPublica recently published a story on how health insurance companies are buying up people’s personal information to set costs.(Photo courtesy of DARPA/Wikimedia Commons)

The clash between privacy and the internet has surged in the past year with Facebook’s misinformation debacle, the European Union’s proposed privacy laws and countless stories of companies targeting consumers in the most unconventional ways.

Advertisement has had a seismic shift as companies found a nuance on how to deliver their products to consumers more effectively. That strategy — collecting personal data information — has had a lasting impression on various organizations.

The latest entities tapping into the public’s personal data are health insurers. It seems like every other week a new industry is falling fond of this method to connect with consumers online, and the dangers of this strategy rely around the questions that can’t be answered straightforward from those companies that collect personal data.

ProPublica recently published a story on how health insurance companies are buying up people’s personal information and using machine learning algorithms to predict how much your health care costs based on several pieces of information such as race, income and personal habits.

The stories reporter can generate by looking at different companies across several industries exploring personal data mining can be profound because it can help the public better understand how far companies will go to know about their consumers — and to keep companies accountable that gather personal information from American citizens.

State Laws

California is among the leader for pushing a new piece of legislation titled the California Consumer Privacy Act. The new law hopes to shine light at how companies compile the various personal information from California residents.

Among the provisions in the new law are options for California residents to opt out from having their data sold by companies, the right to request deleting personal information and having companies compile Californians’ data in an easy format. Data brokers who make their profits from collecting people’s data are among the biggest losers.

Some other state like Illinois have less stringent laws that gives consumers the right to know what companies do with their information and what other business they share it with. Illinois’s “right to know” bill came at the heels from federal government’s rollback on regulations limiting access to consumer protections.

States now have been on the move to step up and protect their citizens. Are there any proposed measures similar to ones in California or Illinois? Contact your local consumer protection advocates. Or if you want to take your story to a fresh new angle, research law firms that are backlogged with consumer protection cases or ones defending tech companies.

Unregulated industry

While there are plenty of companies that buy personal information to market their product of service, the act itself is left by lawmakers who have a challenging time adapting to the digital age. For example, Quartz finds that you (if you’re a Facebook user) end up making $12 in revenue for Facebook, according to an analysis from the news outlet in 2016.

Law firms in Pennsylvania, Tennessee and California are testing with the idea of using geofencing — a smartphone’s ability to locate your parameters — to pop up ads for personal injury lawyers in patient’s phones whenever they are in emergency rooms. The practice is uncontested with federal laws only protecting America’s medical information such as the Health Insurance Portability and Accountability Ac, or HIPAA.

Look into your local tech companies that are teaming up with service industries trying to target consumers more efficiently with geofencing or by collecting their personal data.