States and authorities take action against data brokers sharing your location and habits.
A Growing Movement to Regulate Data Brokers and Protect Personal Information
A growing number of lawmakers and regulators are taking significant steps to rein in businesses that profit from the mass collection and sale of private data. Data brokers, which collect data related to nearly every aspect of a person’s life, have come under scrutiny for their practices. These brokers obtain data from websites and apps that people use daily, often without their knowledge or consent.
CFPB Set to Propose Rules for Data Brokers
The Consumer Financial Protection Bureau (CFPB) is one federal agency that is taking action to increase regulations around data collection. CFPB Director Rohit Chopra announced that the agency would establish rules for data brokers, with a particular focus on the use of artificial intelligence and its impact on individuals’ financial health. The CFPB intends to release a proposal next month to place data brokers under the Fair Credit Reporting Act, a law that holds organizations accountable for fairness and privacy. The details of these rules have not yet been revealed.
“It’s critical that there’s some accountability regarding misuse or abuse of our private information and activities,” said Chopra. The CFPB’s proposal is the broadest effort to regulate data brokers to date.
Massachusetts Considers Location Data Ban
In addition to federal efforts, Massachusetts legislators are considering regulations for data brokers. State Rep. Kate Lipper-Garabedian and State Sen. Cynthia Creem introduced the Location Shield Act, which aims to prohibit the sale of cellphone location data by brokers. The bill is designed to protect sensitive information that can reveal personal details about individuals, such as their religious, racial, political, or sexual minority affiliations. It also addresses concerns about the use of location data to track and potentially prosecute women who have had an abortion.
If Massachusetts’s bill succeeds, it will be the first state to ban the collection of location data.
The Risks of Data Brokerage
Data brokers have faced scrutiny for their role in circumventing warrant requests and indirectly targeting users. While data brokering is technically legal, it is often misunderstood by the public. Brokers can collect information through various means, including purchasing data from third-party companies, scraping public databases, and directly tracking users’ activities through popular apps. This data collection can have unintended consequences and be used to individuals’ detriment.
Attempts have been made to set guidelines for data brokers, such as Vermont’s requirement for registration and disclosure of operations and California’s Consumer Privacy Act. However, these rules have limitations, and companies still have significant leeway in their operations.
The need for a national privacy framework that includes regulations for data brokers has been emphasized by lawmakers, but progress in Congress has been slow.
Overall, the movement to regulate data brokers and protect personal information is gaining momentum, with both federal and state efforts underway to establish rules and safeguards.
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