2.2 Data Brokers & the Shadow Economy

There is an entire industry built around collecting, packaging, and selling information about you — and you have almost certainly never interacted with it directly. This is the data broker industry, sometimes called the shadow economy of personal information.

What is a data broker?

A data broker is a company whose primary business is aggregating personal information from many sources and selling it to third parties. Unlike social media platforms or retailers, data brokers have no direct relationship with the individuals in their databases. They collect data about you without your knowledge, and you are not their customer — you are their product.

The Federal Trade Commission's landmark 2014 Data Broker Report examined nine leading brokers and found they collectively held data on hundreds of millions of people, with individual companies holding up to 3,000 data points per person. The nine companies studied had a combined database of one trillion data points (FTC, 2014).

How brokers obtain your data

Data brokers source information from multiple channels:

• Public records — court records, property records, voter registrations, birth and marriage certificates
• Loyalty programmes — supermarket reward cards and retail loyalty schemes track purchasing behaviour over years
• App SDKs — many free mobile apps include third-party software development kits (SDKs) that collect location, contact, and usage data and sell it to brokers
• Scraped online profiles — social media, forums, and professional networks are systematically scraped for names, interests, and connections
• Purchase and financial data — from retailers, banks, and credit agencies that sell aggregated transaction histories

Enrichment: combining data into profiles

Raw data from one source is rarely valuable alone. Brokers enrich it by linking records across sources, creating comprehensive profiles that include demographics, purchasing patterns, medical interests, political affiliation, net worth estimates, and hundreds of behavioural attributes. Companies like Acxiom (now LiveRamp), Experian (which operates a dedicated marketing services arm), and LexisNexis Risk Solutions maintain profiles on hundreds of millions of people worldwide.

Who buys broker data?

Broker data has a wide customer base: insurers pricing policies, employers screening applicants, political campaigns targeting voters, hedge funds modelling consumer trends, and — controversially — law enforcement agencies purchasing location data to avoid warrant requirements (a practice challenged in US courts).

Your takeaway

You exist in broker databases whether or not you use social media, whether or not you have a smartphone, and whether or not you have ever 'agreed' to any terms with these companies. Knowing this industry exists is the first step. Module 7 of this course covers your legal rights to access and delete broker records where law provides them.