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Home / Business / Facebook, longtime friend of data brokers, is becoming its stiffest competitor

Facebook, longtime friend of data brokers, is becoming its stiffest competitor

For years, Facebook has been a best friend of data brokers, who collect hundreds of millions of dollars a year and sell the Americans' personal information. Now the world's largest social network is about to destroy that relationship – a sign that the company believes it has overshadowed its data-gathering machine.

Facebook said late Wednesday that it prevents data brokers from helping advertisers target people with ads, eliminating one of the key methods that Facebook users have about their friends and lifestyle with their offline data about their families, Finance and Health

Data brokers have played a silent but crucial role in driving users' attention to Facebook ads for years. They have also, according to the critics, secretly contributed to the seemingly omnivorous eerieness of users who saw their Facebook pages promoting things they had never mentioned. For example, a marketer looking to approach new moms could use data brokers' information to send Facebook ads to all women who bought baby food with a store reward card.

Acxiom, Experian and other data brokers once had a prize with a program called "Partner Categories" that allowed advertisers to access the shadow profiles created with data from Facebook and the brokers to target their audiences. The data brokers got some of the money when the advertising they were hiring became a sale, and Facebook also shared some data with the brokers to see how well his ads were doing.

A Facebook director said in a statement that the company will shut down this program over the next six months, which "will help to improve people's privacy on Facebook." Privacy professionals saw the move as a dominance claim from the social network, which has increasingly consolidated its power over the last few years Intime's level of detail over the lives of its users ̵

1; and wants advertisers to pay for its expertise.

"Facebook is officially in the data mining business," said Joel Winston, privacy advocate in Pittsburgh. "It's a definitive signal that Facebook's data collection and identity-targeting technology is light-years away from its competitors."

[Facebook makes its privacy controls simpler as company faces data reckoning]

The move comes as Facebook fights a major privacy scandal in the wake of a political data company's revelations, Cambridge. Analytica took advantage of the site's loose privacy policy and mistakenly received data from more than 30 million Facebook users. The company has taken steps in recent days to see how users can see and limit what Facebook knows about them, which CEO Mark Zuckerberg describes as a "major breach of trust."

In 2015, Facebook restricted the data outside of developers, including the researchers who gave data to Cambridge Analytica, could gather from users and their friends. Christopher Wylie, whistleblower of Cambridge Analytica, told The Washington Post that Cambridge Analytica has paired Facebook data with data brokers to build its electoral profile.

But the social network continued to strengthen its ties to data brokers collecting and repackaging user information. This year, Acxiom said its involvement in Partner Categories helped its advertisers "connect Facebook better with people more inclined to buy certain products or services," adding that its customers are most of the top 10 Insurers, retailers, car manufacturers and hotels in the country, telecommunications giants and banks. A year earlier, in 2014, the Federal Trade Commission issued a report stating that data brokers had gathered information about almost every American and said that brokers "operate with a fundamental lack of transparency."

Facebook collects much of its 2 billion users of online information that data brokers are trying to collect everything else including billions of bits of information from voter lists, property records, buying histories, loyalty card programs, consumer surveys, car dealers Records and other databases. The brokers use this raw data to create models that predict (with varying degrees of success) many hundreds of details about a client's behavior, finances, and personality: age, marital status, household income, crossword puzzles, interest in buying a pet's probability, to have a funeral plan. The data brokers then sell these consumer profiles to marketers and large corporations who are looking for a huge and targeted customer base – also on Facebook, which is now responsible for a fifth of global online advertising.

Acxiom, the Arkansas-based broker, has been working With Facebook since 2013 and sales of more than $ 880 million last year, Facebook estimated the loss of its data-sharing program at $ 25 million in revenue and profit of the company. In a statement released late Wednesday, Acxiom said Facebook had alerted him to the news that day. "Today, it's more important than ever for companies to be able to count on companies that understand the critical importance of ethical data and strong data governance, which is one of the strengths of Acxiom," said Chief Executive Scott Howe. The stock plunged more than 30 percent on Thursday morning.

Representative of the data broker Experian did not respond to questions and the data broker Oracle Data Cloud declined to comment. The Experian share moved slightly lower, while the Oracle shares rose by about 1 percent. Facebook shares climbed about 3 percent, helping break weeks of losses.

Data broker models are often complicated and oddly detailed: Acxiom has classified people as one of 70 "household phase clusters," including "Career-Centered Singles." "Football and SUVs", "Apple pie families" and "Rolling Stones". Advertisers who want more information – served directly from the source – have increasingly turned to Facebook, where they can retrieve first-party data-the actual customer-not just third-party data that has been collected and analyzed remotely.

Facebook and the data brokers have often processed the same types of personal information that advertisers find impossible to resist. For example, Experian operates a Newborn Network that sells advertisers detailed information derived from personal spending and demographics from women who predict them as new and expectant mothers. The company says it captures "more than 80 percent of all births in the US". But Facebook users also enjoy sharing baby photos and highlighting their life events – a more direct way to share the same information with sellers of baby food, baby cots, and maternity wear.

Advertisers can continue to work with data brokers to gather information and engage with customers. You just have to do it outside of Facebook. Critics pointed out some ways, such as Facebook's Custom Audience tool, which allows advertisers to target their customers based on financial and other data they have obtained from the Internet.

Some data privacy experts hailed Facebook's data brokers as a step toward preserving the user's privacy. "It's long overdue that Facebook faced the grave erosion of consumer privacy through its alliance with powerful data brokers," said Jeffrey Chester, executive director of the non-profit Digital Democracy Center in Washington.

[Why Facebook users’ data obtained by Cambridge Analytica has probably spun far out of reach]

Chris Sperandio, Data Privacy Officer of the Marketing Data Start-up segment, said the move also helps Facebook avoid growing questions about the source of its user information. This is fast becoming an important topic: A far-reaching privacy policy coming to Europe in May, the General Data Protection Regulation, will increase the company's liability and ensure it knows where its data comes from.

"Third-party data is supplied by a vendor, and this data provided by vendors is often collected through questionable means," said Sperandio. "The fact that a third-party makes the data muddy, especially if the user is not clear how the third party has received the data."

But some critics doubted the impact of moving to a site could sell access to their users' information as the biggest money maker. Facebook, according to privacy experts, networks a wide range of real-time information – friendships, photos, work histories, interests and consumer tastes, as well as mobile, location and face recognition data – that advertisers see as broker information from legacy receipts and state protocols derived. You wonder if advertisers need to pay data brokers.

"We do not know enough about Facebook's data discovery to see if relinquishing partner categories helps users avoid privacy invasions," said Frank Pasquale of the University of London's Maryland Professor specializing in algorithms and privacy. "Even if we had this knowledge, we have little reason to trust Facebook that we are actually implementing it – there could be a change of course if media attention has gone elsewhere."

Elizabeth Dwoskin contributed to this report ,

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