UPDATE 1-FTC questions data brokers about consumer info business

Tue Dec 18, 2012 12:46pm EST

WASHINGTON Dec 18 (Reuters) - The Federal Trade Commission, the U.S. consumer protection agency, has asked nine companies that specialize in collecting and selling consumer data to provide information about their business practices.

Data brokers, usually companies that have no direct dealings with consumers, have come into the limelight in recent years because of the large amount of medical, financial and other personal information that they glean from online activities.

The FTC said on Tuesday it has contacted Acxiom Corp , CoreLogic Inc, Datalogix, eBureau, ID Analytics, Intelius, Peekyou, Rapleaf and Recorded Future.

The agency, which does not have the power to write rules on data collection, issued a report in March that urged Internet companies to voluntarily allow consumers to preserve some privacy online by giving them the right to say they do not want to be tracked as they move from website to website.

The FTC also called on Congress to pass broad privacy legislation that would allow consumers to see how their online data is collected, used and sold, and give consumers the ability to stop such practices.

The FTC inquiry announced on Tuesday is similar to one made in October by Senator John Rockefeller, a West Virginia Democrat. The senator's probe is not yet complete, a spokesman said.

CoreLogic said it was reviewing the FTC request. "The company looks forward to working with the FTC to discuss the benefits of the appropriate use of consumer data," said spokeswoman Alyson Austin in a statement.

The Direct Marketing Association, a trade group, said that the FTC probe would reassure consumers that their data was being treated responsibly.

"The incredible growth of ecommerce - with online spending on Cyber Monday soaring to $1.46 billion this year - is strong evidence that consumers are delighted with the results of data-driven marketing," DMA executive Jerry Cerasale said in a statement. "E-commerce is exploding because responsible data-driven marketing is meeting consumers' needs."

Jeff Chester, director of the Center for Digital Democracy, said he hoped the FTC work would eventually give consumers a chance to see what information about them was available and correct it if necessary.

"The data broker business, which now comprises far-reaching partnerships between numerous small and large companies, should not be permitted to operate without ensuring transparency and control to the individual consumer," he said in an emailed statement.

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