In a letter to federal legislators, the Direct Marketing Association advised members of Congress to “proceed with caution” when considering the regulation of data brokers.
“New restrictions on data or third-party data providers could have negative consequences not only for data providers, but for the countless entities that rely on such data sources to improve their marketing and grow their businesses,” wrote Linda A. Woolley, acting president and CEO of the DMA.
Last month lawmakers sent letters to nine national data brokers expressing concern that the companies have “developed hidden dossiers on almost every U.S. consumer.” The letters requested information that include a list of each entity from which the companies have received data about consumers, the type of data received (including queries about social media and mobile activity), as well as whether consumers can obtain information about themselves or opt out of collection.
Emphasizing that the data collection performed by the companies is perfectly legal, the DMA explained that marketing databases are not individual “look-up” services, but merely “high-tech ways for companies to pursue the same goal that marketers have always had – namely, reaching a group of consumers likely to enjoy their products and services.”
The DMA argued in its letter that even if information about consumers is inaccurate – something the legislators worried about in their letters – the “only ‘harm’ consumers might experience from inaccurate marketing data is an irrelevant advertisement.” And mandating heightened accuracy standards for marketing data would actually decrease consumers’ privacy, Woolley wrote, because companies would be forced to acquire more personally identifiable information in order to increase accuracy.
To read the DMA’s letter, click here.
Why it matters: “Quite simply, in the digital age, data-driven marketing has become the fuel on which America’s free market engine runs,” Woolley wrote. “From global brands to start-ups, marketing helps companies to find customers, grow, and create jobs. Put another way, unnecessary restrictions on marketing could undermine economic and job growth.” If the lawmakers consider regulating the industry, the DMA said self-regulation would provide the most efficient and effective method of addressing commercial data practices.