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Top Stories from the Front Page
of the International Herald Tribune, Monday, March 9, 1998
Big Corporate Brother:
It Knows More About You Than You Think
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By Robert O'Harrow Jr. Washington Post Service
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CONWAY, Arkansas - Most Americans have probably
never heard of Acxiom Corp., a giant information service tucked
near the rolling Ozark foothills. But chances are that Acxiom
knows quite a lot about them. Twenty-four hours a day, Acxiom
electronically gathers and sorts information about 196 million
Americans. Credit card transactions and magazine subscriptions.
Telephone numbers and real estate records. Car registrations and
fishing licenses. Consumer surveys and demographic details.
What Acxiom does is perfectly legal - assembling an array of facts
from scattered sources. But the phenomenon known as ''data warehousing''
or ''datamining'' represents yet another example of how traditional
American notions of personal privacy have become obsolete, outstripped
by technology's ability to peer into personal lives.
In a flash, data warehouses can assemble electronic dossiers that
give marketers, insurers and in some cases law enforcement a stunningly
clear look into an American's needs, lifestyle and spending habits.
And without aggressive action to preempt the companies, individuals
have no control over facts that are gathered and disseminated
about them.
The explosion of data warehousing has sharpened the ethical, legal
and political questions about an individual's right to privacy
in an increasingly open society.
Access to minute details about prospective customers was once
just a marketer's dream. Now, privacy advocates say the fulfillment
of that dream represents an unprecedented intrusion into individual
lives.
"The whole thing is scary," said Jim Settle, former supervisor
of the FBI's National Computer Crimes Squad and now a security
consultant. "It's not the government you need to worry about.
It's private industry."
Acxiom can often determine whether an American owns a dog or a
cat, enjoys camping or gourmet cooking, reads the Bible or lots
of other books. It can often pinpoint an American's occupation,
car and favorite vacations. By analyzing the equivalent of billions
of pages of data, it often projects for its customers who should
be offered a credit card or who is likely to buy a personal computer.
Some say this power is fundamentally benign and ultimately benefits
consumers by allowing quicker loan approvals and fewer annoying
direct mail pitches. "The data has always been there," said Donald
Hinman, an Acxiom executive. "It's just that now, with the technology,
you can access it."
Acxiom is a leader among hundreds of companies around the United
States that maintain vast electronic reservoirs. These companies
include such retailers as Sears, Roebuck and Co., gift shop chains
like Hallmark Cards Inc. and insurance companies like Allstate.
Data warehouses glean much of their information from consumers
themselves, who often do not realize that the facts they provide
in credit card applications or at the checkout counter are valuable
commodities in this new age of information trading.
Companies like Acxiom are under few obligations to divulge their
files to consumers, and state and federal lawmakers are only beginning
to address some of the privacy questions raised by aggressive
data gathering.
Although banks and retailers have long kept files on customers,
few have had the technological capability to sort information
from various sources - everything from government records to magazine
subscriptions - to produce a clearer picture of their patrons.
"Technology has been the enabler," said Mr. Hinman, who likens
the advances to the invention of the printing press. "Today it's
almost unbounded, our ability to gather, sort and make sense of
the vast quantities of information."
The number of data warehouses - large and small, using faster
computers, the Internet and other networks - exceeds 1,000, a
10-fold increase in five years. Only a few - like Metromail Corp.
and R.L. Polk & Co. - have grown as large or powerful as Acxiom.
"They have gone on an information-collecting binge," said Charles
Morgan Jr., chief executive of Acxiom, describing the datamining
explosion. "There's just this insatiable appetite for more information
to make better decisions."
Privacy anxieties have drawn the attention of legislators and
regulators in Washington and across the country. New federal restrictions
on the use of credit reports and driving records took effect in
the autumn; the Department of Health and Human Services recently
made recommendations about the use of personal health information.
The Clinton administration has pressed companies using the Internet
to disclose more about their information gathering.
The number of privacy bills introduced in state legislatures last
year topped 8,500, according to an analysis by StateNet, which
tracks legislation.
But privacy specialists say such scattershot efforts lag far behind
the race to build larger, faster data repositories.
"We have witnessed an enormous transformation in information collection
and use, without any of the concomitant political debate," said
Joel Reidenberg, an author and a law professor at Fordham University
in New York. "This stuff has dramatically increased and changed,
largely hidden from public view."
Credit reporting is a booming business, but officials at the big
three U.S. bureaus - Experian Inc., Equifax Inc. and Trans Union
Corp. - declined to divulge how many reports they issue, saying
such information could help their competitors.
Associated Credit Bureaus Inc., a trade group, says 600 million
reports were sold last year, a 25 percent jump since 1991. These
reports typically contain a person's name, age, Social Security
number, past and current addresses, as well as information on
credit and payment histories.
There also has been an uncharted increase in the number of World
Wide Web sites selling reports with personal data that helps locate
individuals, evaluate them for jobs or bolster legal cases against
them. These details frequently are culled, legally, from credit
reports.
As of 1999, the Direct Marketing Association will require members
to disclose how they gather and use marketing research data. But
such disclosure has its limitations. Acxiom, for example, will
discuss how it gathers data but says it is technically impractical
to allow individuals to see their files.
The company does not typically provide reports on individuals.
Rather, it identifies thousands or millions of people at a time
who fit particular profiles: for instance, people of a certain
age or weight who read certain magazines, drive certain cars or
use certain credit cards could all get personalized promotions
from a vacation company.
The company does allow people to opt out of its databases, but
fewer than 300 people had done so by the end of last year, according
to Jennifer Barrett, group leader in charge of privacy issues.
Ms. Barrett said that is because Acxiom does not abuse information.
"The real issue is not what information is collected on you,"
she said. "It's how it's used."
But Leslie Byrne, former director of the U.S. Office of Consumer
Affairs, offered a different explanation, saying, "In my travels,
most people don't have a clue what's being gathered about them."
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