Do you ever get creeped out when an ad on a Web site seems to know something about you? Maybe the ad is from a business located only in your town, or the ad seems to know that you are recently single? Are these just good guesses or is the Internet profiling you? The answer to this question is tangled in the roots of a relatively secretive multibillion-dollar industry.
Data profiling is a way to create user profiles that can be offered to advertisers.
The more an advertiser knows about you, the more they can target an ad to you.
Information about you is collected every time you go online: your search habits are logged to create a profile, your profile information on Facebook is used to target ads, some free e-mail services serve up ads based on what's written in your messages, and your online purchases are tracked.
In some cases, this data has been aggregated to create a profile of your habits, interests, and purchases. Profiles are then auctioned in the form of banner ads sold to companies that have products or services associated with your interests. Their goal is to serve up ads that are more likely to induce consumers to click through and make online purchases.
While reputable Internet publishers like Google say they do not use sensitive search data to profile users for advertising sales, there are over 100 other ad networks that buy and sell user data for advertising purposes.
Industry advocates say these profiles reveal no personal data and simply use cookie tracking to record web history and a user's IP address (the unique identifier of every computer or network on the Internet).
But privacy advocates worry that the combination of offline and online data to profile consumers is creating a "Wild West" of data auctioning.
Three privacy groups are petitioning the FTC to establish some oversight on data auctions; The U.S. Public Interest Research Group, the Center for Digital Democracy and the World Privacy Forum. Ed Mierzwinski of U.S. PIRG says, "In the last year or two companies have developed an unbelievable ability to combine online and offline data in real time. The banks own the data about your purchases and when it is connected with the data from your online habits, it is powerful information."
With so many companies collecting our data, placing cookies on our computers, and trading information about us, it's hard to know if or how that data is being combined with information about what we buy. The worry is that if companies start profiling consumers without regulation, a form of "social discrimination" could occur.
Certain offers are made to certain groups of people in a form of redlining called weblining. It's a play off the term used in real estate to describe the practice of lenders drawing a line on maps to indicate certain neighborhoods where they won't make loans.
The petition to the FTC asks for the following actions:
Compel companies to make the collection of data an opt-in scenario where consumers intentionally choose to participate as opposed to the opt-out options that presently exist for some publishers. Require companies to change their privacy policies to acknowledge that they are auctioning data, some of which may make users disclose real identities. Address weblining and the security risks associated with this type of data trading. And finally compensate users financially for the value of their data.