On August 20, 5 million people tuned in to watch a summer baseball game, a pretty impressive figure considering MLB playoffs don’t begin until October. Now consider that those numbers aren’t for major league baseball or even college, but for little league baseball. Last Wednesday, 13-year-old Mo’ne Davis and her Philadelphia team battled and lost admirably to their Las Vegas counterpart, the latest event in a string of brushes with early fame. Sports fans and parents alike seem to endorse little league baseball, but one has to wonder: in an age when amateurism is being redefined at the collegiate level, will the public ever find little league baseball to be exploitative?

Like college football, little league baseball has seen a relatively quick surge in revenue. In 2012, even before Mo’ne Davis took America by storm, Little League Inc. had assets of nearly $85 million. Also like college football, the players are not the ones collecting the revenue. A majority of the revenue generated is used to maintain the Little League headquarters in Williamsport, Pennsylvania, as well as the domestic regional offices and the international facilities in Canada, Hong Kong, and Poland.

As the NCAA can attest, if organizational revenue increases from television contracts while players remain unpaid, some may declare the league exploitative. But Little League, Inc. can rest assured knowing its players won’t be seeking the same redress as current or former college athletes. For starters, Little League, Inc. hasn’t sold its athletes’ rights to merchandisers. The NCAA did, and that was generally what the recently decided O’Bannon v. NCAA was all about.

Secondly, the best college athletes not only earn their organizations money, they do so in lieu of their own earnings. Star athletes in basketball, football, hockey, and baseball often choose between college or receiving compensation from a domestic or foreign league. In 2008, NBA point guard Brandon Jennings chose to play professional basketball in Italy rather than play college basketball in the U.S. Mo’ne Davis et al., as entertaining as they may be, do not have similar opportunities considering minors lack the traditional capacity to contract in the United States, and child labor, even in Europe, is frowned upon.

Although it shouldn’t worry about being sued by its players, Little League Inc. might have to worry about its volunteers. Behind the play of child stars stands 1.25 million non-paid volunteers who ensure little league games are run effectively. Think it’s unlikely they would sue after volunteering to work for no money? So too, most likely, did Major League Baseball. So too, most likely, did several media giants in NYC.

Can all volunteers now sue their “employer,” even if it’s a non-profit? Is anything keeping Americorps and Salvation Army volunteers from suing those establishments? Not exactly. The Southern District of New York held fairly recently in a suit brought by Fox Searchlight Studio interns that the unpaid’s legal status generally depends on the motivation of the organization using them. Fox was found to be using interns in lieu of employees, and it was mainly to benefit them financially rather than offer experience to the interns. If Little League, Inc. keeps expanding its volunteer base in order to continue generating revenue, then it too may be thrown a curve ball.

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Andrew Blancato (@BigDogBlancato) holds a J.D. from New York Law School, and is a graduate of the University of Massachusetts, Amherst. When he’s not writing, he is either clerking at a trial court in Connecticut, or obsessing over Boston sports.

Featured image courtesy of [Edwin Martinez via Flickr]

Andrew Blancato

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“You may not know them, but data brokers know you,” Federal Trade Commission (FTC) chairwoman Edith Ramirez said at the release of an FTC report about the data broker industry. Data brokers know where you live, what you buy, what medical conditions you have, your background, interests, and even the names of your kids. It sounds like something out of a sci-fi movie, so it is no wonder most Americans have no idea the thriving market for their personal information even exists. Here’s everything you need to know about how data brokers collect your information, what it is used for, and what protection you have.

What are data brokers?

Data brokers are companies that compile and resell or share the personal data of consumers. The FTC released a report on May 27, 2014 examining nine companies in the industry: Acxiom, CoreLogic, Datalogix, eBureau, ID Analytics, Intelius, PeekYou, Rapleaf and Recorded Future. These companies derive a whopping $426 million in annual revenue from their products.

The information set held by these companies is massive. Acxiom estimates it holds roughly 1,500 pieces of data per consumer. Another broker dwarfs Acxiom with 3,000 data points for nearly every U.S. consumer. One broker is said to maintain about 700 billion aggregated data elements and adds more than 3 billion pieces of data each month. Another database has information on 1.4 billion consumer transactions alone, such as credit card purchases. Watch an in-depth look at data brokers by 60 Minutes below.

Where do data brokers find their information?

Contentions with the data broker industry arise from the fact that information gleaned does not come directly from consumers. Data brokers garner a lot of information from publicly available sites. A site relaying U.S. Census data can provide information regarding local demographics and real estate value. These firms get additional information from voter records, tax records, court records, mortgages and property information, driving records, and numerous other avenues. Companies can scour social media sites, such as LinkedIn, for any publicly-available information. Data brokers also gain a lot of information from card loyalty programs, credit cards, and advertising agencies that may follow a user’s online activities. If you recently bought a subscription to Forbes Magazine or purchased a new dress from a catalog sent to your home, these data brokers will know. By compiling all this information, brokers begin to paint a profile of you, including your age, race, income, social security number, religion, political affiliation, criminal history, movie preferences, gun-ownership, gym membership, and hobbies.

What is this data used for?

Individual data points are compiled to form a profile of potential consumers who can then be targeted for specific products. The information allows companies to more accurately target consumers for advertising campaigns and gain information about consumer preferences. The FTC report shows that data brokers usually package data into two forms:

1. Data elements: Age, family, and interests.
2. Data segments: Compilation of interests used to to create a list of people with similar characteristics. Here are some examples of these list segments: “African-American Professional;” “Allergy Sufferer;” “Bible Lifestyle;” “Biker/Hell’s Angels;” “Plus-Size Apparel;” “Twitter User with 250+ friends.” Other categories include people with high cholesterol or those interested in novelty Elvis items.

Data brokers then use this information to create various products in three different categories:

1. Marketing: This includes mail, email, telemarketing, mobile, and TV campaigns. To target consumers, marketers use a process called “onboarding.” Onboarding allows marketers to load offline information, such as magazine subscriptions or store loyalty cards, into cookies that digital advertisers use to target consumers. Cookies are stored in a computer’s browser and allow advertisers to promote their products on numerous Internet services.
2. Risk Mitigation: This includes identity verification. These products use analytics to help banks comply with “know your customer” identity verification requirements under the USA Patriot Act. Products also include fraud detection to track patterns of attempted fraud. For instance, these products can track how long an email address has been used or whether a delivery address matches a listed consumer.
3. People Search: This includes products generally intended for use by individuals. Products can search for someone’s criminal record, ancestry, phone number, telephone history, or social media information. Most come in the form of fee-based search products.

Does the data make our lives easier?

Many people would agree that products that help to verify one’s identity are a good thing. Companies that can link consumer purchases to personal information like an address, phone number, and email drastically reduce chances of fraud. Some also see personalized advertising as a good thing. Say you are a senior citizen. Rather than scrolling through the Internet and seeing ads for baby strollers or discounted student loans, you might see ads for healthcare services. Targeted advertising means you receive information and discounts for things you actually use instead of products with no relevance to your life. Ideally the more information data brokers have about you, the more they can target your individual tastes. While each individual piece of data has little benefit, the aggregation of this data by data brokers is immensely beneficial to companies doing market research to improve and tailor their products.

How are data brokers changing political campaigns?

The use of personal data is not limited to what you buy. In the 2012 elections, campaigns contracted with political data brokers to match voting records with cookies on computers. Voter registration lists have long been used to target voters. Combined with more information, these lists now take a powerful form in the digital arena. Political microtargeting allows campaigns to utilize information from data brokers to deliver a specific message to a target demographic. Data can help campaigns decide which voters are most likely to respond to a specific ad or which groups need to be targeted with a specific message. Candidates can target registered Democrat or Republican voters with online ads and can even target based on how much the individual has donated to campaigns before.

President Obama’s 2012 re-election campaign was among the first to use big data to its advantage. The 2012 team assembled an analytics department five times the size of that in its 2008 campaign. Some insights into the use of data in Obama’s 2012 campaign:

• As TIME describes, the team discovered that East Coast women between 40 and 50 were not donating as much as hoped. This demographic was the most likely to hand over cash for the chance to dine with a gravitational celebrity. The campaign’s solution? A fundraising drive with the prize being a dinner with Sarah Jessica Parker.
• The campaign used data to predict how much money they would get from each fundraising email. They also used demographics to determine which groups would be most responsive to an email signed by either Barack Obama, Michelle Obama, or Joe Biden.
• The campaign bought data from brokers regarding the television-viewing habits of Ohioans. The campaign was able to combine lists of voters with lists of cable subscribers and then coordinate the information of watching habits. Using this information, they targeted campaign ads to specific demographics at the exact time these niche voters were watching TV. This led to the campaign buying airtime in shows like Sons of Anarchy and the Walking Dead rather than traditional news programming. Watch for more on the use of big data during Obama’s reelection campaign below.

Little information is disclosed on just how much data campaigns can access. Inevitably the collection and effective use of data will play a huge role in the 2016 presidential election, but not all consumers are happy with that. The regulation of the use of data for political purposes raises questions of free speech and privacy. Others claim microtargeting actually offers more privacy, since the data does not include names or physical mailing addresses. It may be hard, however, for consumers to opt out of political advertising. Even lists like the National Do Not Call registry have exceptions for political campaign calls. According to a study by the University of Pennsylvania, 86 percent of Americans said they did not want political advertising tailored to their interests.

What are the problems with data brokers?

There is a certain “creepiness” factor to data collection without consumer consent. Target tried to market products to new parents by identifying them even before the baby was born. Data showed that pregnant women purchased products like cocoa butter and calcium tablets. Target began sending targeted mail to these women. But instead of finding it helpful, the women found the fact that Target knew they were pregnant to be unnerving.

Others worry about the effects of outdated data. Consumers have little access to immediately change what information that brokers have on them, such as an address change or marriage. This means people could potentially be prevented from making a purchase solely based on outdated information. Outdated information becomes more offensive when the deceased remain on data broker lists and continue to receive offers in the mail. Some women revealed stories of experiencing a miscarriage yet continuing to receive insensitive mailings from Gerber and American Baby Magazine.

Companies that have such specific information about segments of consumers may take advantage from the data. An example from the FTC looks at the case of a consumer labeled to be a biker enthusiast. This person might get more coupons for motorcycles and gear, but they could also see higher insurance rates if companies use this information to conclude this individual engages in risky behavior. Watch a Congressional hearing on the industry’s issues below.

An Acxiom presentation to the Consumer Marketing Organization in 2013 indicates further issues with potential discrimination. Acxiom placed customers into “customer value segments.” Data showed that while the top 30 percent of customers add 500 percent of value, the bottom 20 percent actually cost 400 percent of value. The bottom 20 percent call customer service numerous times and cost the company in returns. The company would be better off ignoring these customers altogether, and data brokers can help companies to identify these costly customers. These high-cost customers could then face higher prices or poor service without even being aware they are discriminated against.

Do people have any protection?

The problem most people have with the collection of data is that they have no say in it. They are not aware when information is being collected, nor are they in control of what it is used for or if it is correct. The resale and illegal use of the data is prohibited. Data brokers also suppress protected lists such as phone numbers on the Do Not Call Registry.

Some data brokers do try to protect consumers. Some voluntarily remove information regarding children and teens from their data. Others provide ways to edit and review what data the broker has on you. Acxiom uses aboutthedata.com for this very purpose. Epsilon allows consumers to review information, but reviewing the information costs $5 and requests can only be made by postal mail. Trying to review information collected by every broker is extremely time consuming. Watch for more on how to protect yourself below.

No laws require brokers to maintain the privacy of consumer data unless it is used for prohibited purposes. Federal law protects the confidentiality of medical records. The Fair Credit Reporting Act (FCRA) restricts the search of information when determining eligibility for employment, credit, or housing; however, most data does not fall under the scope of FCRA.

What is the FTC pushing for?

The FTC report recognizes the immense value of data brokers to both companies and consumers; however, the FTC has offered the following recommendations to improve the industry and bolster consumer protection:

• Create a central database where consumers can see what information about them was collected. The database should also allow consumers to opt out from the data collection.
• Require brokers to list their data sources.
• Increase industry visibility and consumer awareness.
• Comprehensive legislation to prevent the discriminatory use of data. For instance, some categories infer sensitive statistics. “Metro Parents” are single parents primarily high school-educated handling the stresses of urban life on a small budget. “Timeless Traditions” are immigrants who speak some English but generally prefer Spanish.
• Adopt a series of best practices, including better protection for minors, improving data security, preventing unlawful discrimination, and restricting collection to only needed data.

The Direct Marketing Association (DMA) and other groups attacked the FTC report. In an interview with the Washington Post, Stuart Ingis of the DMA said, “You’d think if there was a real problem, they’d be able to talk about something other than potential” abuses.

The data broker lobby is very powerful. Senators John D. Rockefeller (D-WV) and Edward Markey (D-MA) led the regulatory push by proposing the DATA bill on February 12, 2014, requiring data brokers to be transparent about the information they collect. But considering the fact that political campaigns benefit from data broker information when targeting voters, it is unlikely there will be new legislation on data brokers in the near future. In the meantime, expect data brokers to know much more about you than you know about them.

Resources

Primary

FTC: Data Brokers: A Call for Transparency and Accountability

Ed Markey: Markey, Rockefeller Introduce Data Broker Bill

White House: Big Data: Seizing Opportunities, Preserving Values

Senate: A Review of the Data Broker Industry

Additional

Yahoo: FTC Wants More Transparency for Data Brokers

Data Privacy Minitor: FTC Report Seeks Congressional Review

Privacy and Security Law Blog: “Getting to Know You, Getting to Know All About You”

Washington Post: Brokers Use Billions of Data Points to Profile Americans

ProPublica: Everything We Know About What Data Brokers Know About You

Slate: What Do Data Brokers Know About Me?

CNN: Why Big Companies Buy, Sell Your Data

New York Books: How Your Data are Being Deeply Mined

Pulitzer Center: Consumer Data Privacy in Politics

Time: Inside the Secret World of the Data Crunchers Who Helped Obama Win

ProPublica: Everything We Know So Far About Obama’s Big Data Operation

AdWeek: Confessions of a Data Broker

Alexandra Stembaugh

Alexandra Stembaugh graduated from the University of Notre Dame studying Economics and English. She plans to go on to law school in the future. Her interests include economic policy, criminal justice, and political dramas. Contact Alexandra at staff@LawStreetMedia.com.

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