New York, NY, February 13, 2014—The Direct Marketing Association (DMA) expressed disappointment today following the introduction of the “The Data Broker Accountability and Transparency Act of 2014″ (DATA Act), a bill that would stymie the responsible use of data across the entire data-driven marketing economy, stifle innovation, and ultimately hurt consumers.
Introduced by Senator John Rockefeller (D-WV), Chairman of the Senate Commerce Committee, and Senator Edward Markey (D-MA), the DATA Act would require that “data brokers” provide consumers with ability to access and correct marketing information, and to opt-out of having that information used for marketing purposes. A data broker is defined in the bill as any company that “collects, assembles, or maintains personal information concerning an individual who is not a customer or an employee of that entity in order to sell the information or provide third party access to the information.”
“Time and again, Congress has found that access and correction to consumer data are necessary only when the information is used for eligibility purposes, and marketing is not an eligibility purpose,” said Peggy Hudson, DMA’s senior vice president of government affairs. “Imposing an access and correction regime on marketing data is not necessary to protect consumer privacy and doing so would make it harder for companies to keep data secure at a time when consumers are more concerned about identity theft than ever before,” she continued.
The introduction of the DATA Act is the latest chapter in Senator Rockefeller’s ongoing focus on “data brokers,” which began in October 2012 with the launch of a Senate Commerce Committee investigation into nine companies. The investigation was expanded to include 12 additional companies in September 2013. The Government Accountability Office (GAO) released a report on data brokers in November 2013, undertaken at the request of Senator Rockefeller. The Senate Commerce Committee released the findings of its investigation in December 2013, on the eve of a hearing by the full Committee to examine the practices of data brokers. Over the course of the Senate Commerce investigation, the companies targeted have submitted tens of thousands of pages explaining their business models and the incredible value that responsible data use provides to consumers. The Senate Commerce Committee and the GAO both failed to find any wrongdoing on the part of these businesses.
“It is unfortunate that after receiving all of that evidence, and despite the fact that no harm has been discovered, Chairman Rockefeller continues to want to hamstring an industry that is the brightest beacon of American innovation—creating products and services that consumers love and demand—and the engine of the U.S. economic and employment growth—for no good reason,” said Linda A. Woolley, DMA’s CEO and President.
“Data is the new gold, and the responsible use of consumer data is the fuel that drives the U.S. economy,” said Hudson. A recent study entitled, The Value of Data: Consequences for Insight, Innovation & Efficiency in the U.S. Economy, found that the data-driven marketing economy (DDME) added $156 billion in revenue to the U.S. economy and fueled more than 675,000 jobs in 2012 alone—and 70 percent of that value was dependent on the ability to exchange data across the economy. The study, commissioned by DMA’s Data-Driven Marketing Institute and conducted independently by Professors John Deighton of Harvard Business School and Peter Johnson of Columbia University, found that the DDME was “made in America” and that the exchange of data across the DDME is vitally important for small businesses to compete effectively with big players and for innovation across the marketplace.
DMA members deeply value consumer trust and understand that responsible data practices are critical to building and maintaining customer relationships, and DMA has spent nearly 100 years ensuring that data-driven marketers respect consumer choices while remaining able to provide the products and services consumers most desire with the convenience and value they demand. The entire DDME is subject to DMA’s longstanding and enforceable self-regulatory framework, the DMA Guidelines for Ethical Business Practice, and DMA has consistently demonstrated that self-regulation delivers robust yet flexible standards that adapt quickly to technological changes, provide robust and meaningful choices to consumers, and are an effective means of enforcing ethical standards on the data-driven marketing community.
Americans have fully embraced a data-driven way of life. The responsible use and sharing of data for marketing provides tremendous benefits to the U.S. economy and the American workforce, for small and large businesses, and for individual consumers and society as a whole. Unnecessary legislation that stops the responsible exchange of data would hurt consumers by limiting choices and raising prices. It would impact billions of dollars in revenue and hundreds of thousands of jobs, make small business less competitive, and stifle innovation. DMA continues to support industry self-regulation as the most efficient and effective means to safeguard consumer privacy while ensuring that responsible data flows continue to benefit consumers and the economy.