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<\/p>\n\n\nCollecting and selling user data is a common practice, where that data is sourced from websites and applications. Individuals\u2019 online activities create data that enables companies to optimize their marketing efforts and create better experiences for their customers.<\/p>\n
The data resulting from browsing websites, shopping, interacting on social sites, and other online activity, is collected, processed, and sold by a variety of companies, websites, and analysis firms. In fact, data collection and data selling are a big part of the modern digital economy.<\/p>\n
Let’s look at the what, when, why, and how of companies that collect and sell user data.<\/p>\n\n\n
User data collection refers to the practice of gathering information about users or visitors to websites, apps, or online properties or services. This data can include various types of information, such as:<\/p>\n
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Before companies can process, package, or sell user data, they first need to collect it.<\/p>\n
Data comes from nearly everywhere online, even when many people think they’re not doing anything. Browsers, apps, and other software can record IP addresses, revealing location. They also log browser type and version, operating system, device type, and whether a paid or free version of an app is in use.<\/p>\n
Search history is valuable, too. Websites track the pages visited, search terms, what\u2019s clicked on, and other activities. They also track the sites or pages visited before and after, items added to the shopping cart but not purchased, and detailed purchase information, including shoe size, favorite color, credit card details, and shipping address.<\/p>\n
Ultimately, each of our digital interactions is a rich source of data, revealing who we are, what we like, and how we live. Companies want as much user data as they can get to use for targeted advertising, product development, website and app optimization, personalization, or to sell to third parties as a revenue stream.<\/p>\n\n\n
79% of global companies collected personal data<\/a> on individuals living in North America, Western Europe, and other developed regions in 2023.<\/p>\n Typically, companies collect a vast amount of user data, ranging from basic personal information like names, email addresses, and birthdates to more extensive details about behavior, interests, location, and even physical characteristics, depending on the company\u2019s data needs or sales goals.<\/p>\n Organizations use various methods, like website tracking via cookies, forms completed by customers, and purchase records to build data profiles. This information can be used and stored across a company, from marketing to customer service to finance.<\/p>\n While data enables personalization, marketing, product improvement, and business insights, companies must balance data collection practices with user privacy concerns and compliance requirements from data protection regulations such as the General Data Protection Regulation (GDPR)<\/a> and the California Privacy Rights Act (CPRA)<\/a>.<\/p>\n\n\n Before selling data, companies typically process it in various ways to make it valuable and useful. It can be categorized by type of data or target demographic, for example. It can be from first- or third-party sources. It could be identifying or not, or have been de-identified.<\/p>\n Some data is made anonymous, ensuring the identities of individuals are not revealed to buyers. This anonymized data is still useful for understanding broader demographics and improving customer experiences, similar to Google\u2019s planned switch from third-party cookies<\/a> to newer strategies like Topics<\/a>. Other data can make an individual identifiable without aggregation, including names, ID numbers, and email addresses<\/p>\n However, not all companies follow good data processing practices. Some may fail to secure user consent before collection where required. Some may not store data securely, limit employee access to it, or fully anonymize it when needed. While companies and data brokers typically do not make data publicly accessible, breaches can occur, leading to stolen data being sold illegally or otherwise misused, e.g. for credit card fraud or identity theft, causing harm to individuals and damaging companies\u2019 reputations.<\/p>\n\n\n Companies collect data to predict demographics, learn about customer preferences, recommend products, and more. This data can be used directly by a company for purposes like emailing customers about sales or improving their website, or it can be sold to other companies or data analysis firms. Common uses include:<\/p>\n Data is valuable because it helps companies understand customers better, predict trends, and increase profits.<\/p>\n As noted, however, data is not always collected or used respectfully or compliantly. Consumers are increasingly savvy about access to their personal data online and fed up with intrusive practices by companies. Some of these intrusive practices can include unsolicited emails, endless ads for something they\u2019ve already bought, or feeling like their devices are spying on them.<\/p>\n Often, when individuals are active online, such as when shopping, they agree to terms and conditions or privacy policies that allow their data to be used for marketing purposes. The agreement to such policies can often be built into the transaction. Though they agreed to the policies, few people actually read the terms and conditions before agreeing to such terms, and may not appreciate what they\u2019ve agreed to.<\/p>\n While so-called click-wrap agreements are generally legal, in recent years there has been more scrutiny from data protection authorities on such agreements. In fact, some large tech platforms have been fined for detailing consent-related terms or practices regarding data collection and use of personal information deep in their terms and conditions rather than more prominently. Such actions are dubious under the GDPR, for example, which requires users to be accessibly informed about data processing and user rights, and requires user consent to be informed as well.<\/p>\n\n\n The sale of user data is big business. Companies may collect data for their own business needs, but they can also sell it as well. Under some data privacy laws, companies are required to explicitly disclose whether they sell personal data and to enable individuals to opt out of such sales. Companies that sell data can be broadly categorized into two groups.<\/p>\n\n\n\nHow is data processed before being sold?<\/h2>\n\n\n
What does it mean for companies to collect and sell user data?<\/h2>\n\n\n
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What kinds of companies sell data?<\/h2>\n\n\n\n
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