The Business of Data Brokers: Who are they and how do they sell your information?
On any typical day of opening Instagram to engage with the content, checking on your Amazon order, and posting on Twitter, you’re essentially contributing to a dark industry in the world of data brokers.
Data brokers collect, categorize, and sell your data to 3rd parties interested in obtaining your information. They track your online behavior and interests to create a digital profile for anyone who wishes to purchase your information as a product usually to the highest bidder.
Who are they?
They are large companies operating in a 200-billion-dollar industry under names you probably never heard of. They’re not the giants like Google or Facebook who you may think actually sell information. Instead, they operate in the shadows as digital collectors.
What do they know about me?
Data brokers collect data points or units of information and use them to create aggregated profiles. They collect information such as your full name, age, email, gender, birthday, phone number, home address personal interests, political views, religious views, weight, height, etc…
Data brokers obtain this basic information to better understand your interests and patterns.
You found a good discount for sushi and make a reservation online for your friend’s birthday. Meanwhile, you post the picture of the night all over social media and give the restaurant a good review. You already revealed so much that data brokers have enough to sell your information to marketing agencies, travel agencies, fitness clubs, events, and many other 3rd party entities.
They know if you’re pregnant, going through a divorce, depressed, or even suicidal. They even know your credit score to see if you’re underprivileged or wealthy.
However, what they collect isn’t necessarily accurate and is only presumed. If you search for specific medications for research purposes, they might classify you as a health risk and will sell your data to health clinics, gyms, personal trainers, medical manufacturers, or pharmaceutical companies. If your friend sends you a video on a trip to the Bahamas, then they’ll label you as an avid traveler and promote flash plane ticket sales.
How do they collect my data?
Data brokers collect your information by tracking your online and offline activities.
Whenever you purchase something online, fill in a survey, accept cookies when visiting a website, or use APIs from social media apps and e-commerce sites, they create a digital persona of you.
E-commerce sites are a goldmine for collecting identities. Many of these platforms use customer data platforms (CDPs), software to help businesses mine data for profit. If you clicked on an item you want to purchase but didn’t, you’ll still be targeted with ads promoting a product similar to that item.
Browsing fingerprinting functions like tracking cookies use hidden website scripts to pinpoint what browser you’re using, device, preferred language, time zone, video and audio equipment, and so on. What’s worse is that they work even if you’re not logged in or are in Incognito mode. One of the biggest methods for them to track you down is finding your IP address. Many websites use IP addresses to identify where their visitors are clicking from to improve their services and sell that information.
Once they collect this data with your consent, they move on to offline data which is available by digging through public records. They already have your basic information like your name and email, now they will find out your driver’s license, property records, any business license, and anything else they can find.
First-party brokers:
They work by collecting huge amounts of data when you use their products. Any platform that allows you to like, share, comment, search, order, or interact in any way reveals more about your identity. They establish a direct relationship with their customers who don’t know that they’re consenting to give away all their information. They hide such schemes and use misleading wordplay to mask their intentions.
Third-party brokers:
They work as the name suggests – not directly with the customer. They operate as separate contractors and mine your personal information and aggregate them to identify patterns. Once they categorize all this information, they sell this information to marketing agencies or any entity with a specific target audience.
Types of data broker
Being under the microscope is stressful enough. Here are the different types of data brokers to look out for.
Marketing and advertising data brokers:
These companies are responsible for the annoying emails that appear in your inbox. Unlike a newsletter to which you've subscribed, these emails appear suspiciously after searching for something similar to the ad. Their job is to gather data about people to help create targeted ads. They collect basic information such as gender, age, income level, location, etc… They will then aggregate the data and auction it to the highest bidder.
Risk-mitigation data brokers
They operate by using your information to send you targeted offers. By studying your information, they can know where to categorize you for specific ads and not waste money on mass advertisements to the wrong target audience. Let’s say, you’re someone who regularly goes to the gym. These brokers will then not put you in a health risk category and won’t target you with ads medical-related ads.
They can assess your financial status to see what kind of offers to send you. If your online purchases are within a constrained budget, then you’ll be seeing ads for products and services within the range of your budget.
Fraud detection data brokers:
They’re considered to be the white knights of data brokers. They collect data to detect if you’re committing any possible fraud. Institutions like banks work with these agencies to run background checks on people if the bank suspects anything out of the ordinary.
How do they make a profit?
We established that they collect your data but it isn’t technically sold, rather it’s leased to multiple 3rd parties by subscription contracts. The biggest demands are bundled “identities” meaning the part of you that searched for new gyms in your town or you that did a quick search on why you always have a headache. The aggregated personal data is what sells the most. The more personal and sensitive, the higher the value. Personal information is sometimes more valuable than any product that can be sold on an e-commerce website or a platform selling specific products.
Who is buying my data?
Marketing agencies need your information to send you specifically targeted ads without wasting time and money to broadcast a wide range hoping to catch new customers and grab interest. Hospitals target health-risk individuals by studying their information. Political parties see which mindset you skew towards and attract you with more targeted ads. Even individuals are reaching into their wallets to expand their small businesses. Anyone that has a product or service is acquiring your data for their benefit.
Is all of this legal?
The answer to the million-dollar question is: it depends. Data brokers operate on the shadow limit of the law and don’t need your consent. If you live within the EU or in the US or Canada, then you can count on your data to be somewhat protected. But the people living in places like China or Russia, need to get ready for your data to be taken away from them.
Because once your data is out there, then it isn’t yours anymore – it’s theirs. Most people consent to giving up their data without knowing that they did it. It happens all the time when clicking “accept” whenever you access a new website. When you’re on a free-to-use platform and have nothing to purchase to lift its revenue, then know that you are the product. They’re getting away with selling your identity whether you like it or not.
How to erase yourself online
You can remain hidden from any data broker radar continuously. You have the option to request your removal from a data broker’s database by contacting them directly. Some companies can also fulfill the request for you or you can visit some websites which provide a list of data brokers along with their contact information.
One of the most effective ways to practice safe internet browsing is by not constantly signing up to website accounts with your primary email. It helps to create a dummy email for certain tasks you wish to get done. You can utilize the option to browse on secure web browsers like Tor or DuckDuckGo. The more you keep yourself out of registration pages, accepting cookies, and email listings the more you’ll be off of a data broker’s watch. You also have the option to opt-out of any 3rd party tracking cookies and clear any ties with certain websites.
VPNs can help
VPNs are software services that have a built-in end-to-end encryption structure that protects your internet requests when you’re online. This is good to preserve your online privacy as it also changes your local IP address to that of a country you can choose from. SwoshsVPN offers 140 servers from 60 country nodes to choose from to get started with protecting your online identity and not fall victim to data brokers.