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What Your Data's Worth: Probably Not As Much As You Think
Originally published on Wed April 30, 2014 12:39 pm
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Right now, information about the kind of purchases you make, the prescriptions you pay for, the stores and websites you frequent, it's all gathered up by data brokers. That data profile is then bought and sold, and the price is a lot lower than you might think. While your age, income, race, and other factors play a role, the cost of an individual profile is just a fraction of a penny. So what makes the data brokerage industry big business?
Emily Steel is a correspondent for the Financial Times, and has spent a lot of time looking into how this works. Emily, welcome to the program.
EMILY STEEL: Thank you.
CORNISH: So, you've actually developed an online calculator that shows how much an individual's data might be worth. Explain how it works?
STEEL: Yeah. So what we did is on the very basic level, most all of these companies know basic information about you, such as your age, your gender, and your location. So the price for that is very, very cheap. That sells for about .0005 cents per person or about 50 cents per a thousand people. But you add in more specific details, like if you're influential in your social network, then that jumps up to .00075 cents per person or 75 cents per a thousand people.
CORNISH: So, Emily, let's try the calculator here. I'm going to check off a couple of boxes. Am I a millionaire? No.
CORNISH: Nonprofit, that's the business I'm in. It goes up to and 80th of cent. And then things get interesting when it says, like: Are you expecting a baby, no; are you a new parent, no. But I gather this health section is really important.
STEEL: Yes, the health section is very important. As soon as you start checking off those items that say: do you have acid reflux or ADHD, depression, or cancer, then the price really jumps up.
CORNISH: I'm going to check arthritis than high cholesterol. Oh, and I checked off obesity and it went up to 60 cents right away.
STEEL: Right, I guess the lesson from that is that the more sensitive the data, the harder it is for these data brokers to get their hands on that information. And, at the same time, the demand from pharmaceutical companies, marketers, and others to use that information is at a very big high.
CORNISH: I'm trying to get up over a dollar here. I feel like I would be a very unhealthy person.
STEEL: So, one of the things that really kind of changes the way that the state has valued is there's a couple of times in a person's life where they are making huge life decisions that are likely to influence purchases they make for years to come. One of those times is when you are engaged, and then another time is when you're having a baby.
CORNISH: Now, ultimately the level of detail that these companies have about us, I mean it's really astounding. And you write of a Senate Commerce Committee investigation which found that a list of rape victims, their information, was worth quite a bit.
STEEL: Yeah. So, the Senate Commerce Committee, led by Senator John Rockefeller, has conducted a series of investigations. And one of the topics that he is most concerned about is how data brokers are collecting information about people who are financially vulnerable, or have certain health conditions. So during one of the hearings, there was a woman who revealed that this one company, MEDbase, she had found that they were selling lists of rape victims for as little as seven cents a name.
And that really shocked people because they thought, number one, why does a company need to sell that information? And number two, if they're selling it, there is probably a market for that data. And how in the world are companies using that information? And then number three, is that something that could really take advantage of people who are in a dire situation?
CORNISH: Emily Steel is with the Financial Times in New York. Emily, thanks so much for talking with us.
STEEL: Thank you.
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