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Bob Butler
Bob Butler
Morrisville, NC USA 
Bob Butler is CEO of Thinker Media, an independent digital publisher. Previously, Mr. Butler was a COO/GM of a LexisNexis division of Reed Elsevier. He also founded Time Matters Software, one of the most widely used information and document management systems in the US legal market.
 

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Posted in Business

Big Data, Big Brother's Big Brother

Aug. 11, 2014 11:38 am
Categories: Business Processes


I was commenting on Paul Duginski's excellent political cartoon Big Brother's Here when I realized my confidentiality agreement with my former employer had expired, and this was a subject I could now talk about. So I'm expanding on the comment, posting it as a blog.

I was really surprised to see Paul's accompanying blog mention Acxiom, of Little Rock, Arkansas. Paul has amazing insight and instincts to be talking about them in the context of George Orwell's Big Brother from the book "1984." Acxiom is having more impact on all our futures than any other company we never heard of.

I first was exposed to the core of what Acxiom does in 1989 when a colorful entrepreneur named Hank Asher was looking for help with his startup, first called Database Technologies (DBT) that ultimately became known as Seisint (from seismic intelligence). It was at DBT in 1989 that I first saw how public records were being mined and aggregated into large indexed databases to create readily accessible profiles on individuals. It was fascinating. Remember, this was before the Internet, email, and the Seagate ST-251 40 megabyte hard drive was the giant of the day. Of course Hank, in an effort to impress me, ran a search on me. I remember how creepy it was... and I remember how much of the information was wrong. It was also my first hint that my older brother – who was a private investigator who had watched too many episodes of the Rockford Files – was cloning my identity, a problem that dogged me for years.

By 2004, I was a C-level executive at LexisNexis when it decided to expand from its business supporting lawyers and accountants to enter what was euphemistically called the "Risk Management" business. Initially, this was all about identity verification, principally for the government, banking, and the credit industry. LexisNexis acquired Seisint for a reported $770 million and soon after acquired ChoicePoint for billions. All in an effort to keep up with Acxiom.

While there have been a few media stories about Acxiom (mostly them trying to control the story), even fewer seem to understand and pay attention to who they are and what they are up to. The unverifiable perception on the street was that ChoicePoint was largely directed by geeks and Acxiom was largely directed by spooks (former CIA, NSA, and the like).

Basically, what the NSA is to the government, Acxiom is to corporations.

A principal difference from the NSA is that Acxiom "officially" doesn't use surveillance to gather information, they simply buy the information from big-box stores, credit card companies, cellular phone providers, and so on. Selling this information to the Risk Management business is a major profit center for these providers since it goes right to their bottom line with little production costs.

It all started innocently enough. With the advent of Photoshop and the color LaserJet printer, physical IDs became easy to fake. Also, in the American culture, only Communists, Nazis, and other oppressive governments use national ID cards. Who in America didn't grow up on a steady diet of movies where the hero is confronted by jack-booted leather-clad thugs demanding in a foreign-accented monotone "papers please."

Corporations, especially banks and credit providers, needed a new way to verify a person's identity. It began with data mining a few public databases, such as auto registrations and real estate holdings, to be able to ask a person a question only they should know the answer to. You may have experienced this when getting a credit report or merchant loan when you were asked if you ever had the following phone number, address or type of car. In the early days this was known as Knowledge-based Identity Verification... the person proved their identity by having knowledge only that person should have.

But now, under cover of the presumed benefit of being able to target advertising, this has grown to a massive database on every single American that consumes anything. Unlike the NSA, there is virtually no transparency or oversight of Acxiom and ChoicePoint (LexisNexis' Risk Management company). And just as it was in 1989, there is no accountability for the accuracy of the information. I often wonder what my profile looks like, considering all the searches and content purchases on an extraordinary range of topics I do to support BestThinking and ThinkerBooks.

For example, ever wonder how big-box and grocery stores make money on such small margins... think it's the volume? Wrong, it's the loyalty cards (and credit and gift cards and warranties). That's why the first thing they ask you for at checkout is your loyalty card, and if you don't have one, they push hard for you to get one. The fact they often give you a substantial discount on your entire purchase for you using the loyalty card demonstrates how valuable the sale of your information is to the store's bottom line.

Whenever you use a loyalty card, your exact purchases in much more detail than available from the credit card company can be connected to your personal ID, and that information is then often sold to the Risk Management industry. Your purchase history can later be used in reverse to confirm your ID as a service provided by Risk Management. The idea was that your answer to whether you like crunchy or creamy peanut butter along with similar questions would confirm who you are more reliable than a photo ID.

That was creepy, but this is scary. The Risk Management business has grown into something much more perverted than even Orwell envisioned. Orwell saw Big Brother largely as an omnipresent voyeur observing people's every move to suppress any actual undesirable behavior. Today, the Risk Management business and their customers are using Big Data to mine these databases to predict undesirable behaviors. Big Brother would observe and act on your actual behavior, Big Data forecasts and acts on your projected behaviors.

For example, if data mining discovers a correlation between eating crunchy peanut butter - rather than creamy peanut butter - and reckless behavior, crunchy peanut eaters would be charged higher health, home, and car insurance premiums and higher mortgage and credit rates. That's why the industry called itself Risk Management, instead of Identity Verification.

Currently, the Risk Management business is once again trying to spin its true nature by positioning and rebranding itself as a Marketing Metrics and Analytics business. They apparently noted how effectively Google and others were using the argument that as long as the data mining was supporting advertising and marketing to benefit consumers by increasing the efficiency of marketing dollars, there was a countervailing benefit to the loss of privacy. Nevertheless, their primary business remains the selling of your personal information.

Acxiom created the market that many are jumping into and providers and/or consumers of data about you. In the end, the primary business of Google, Facebook, Linkedin, Verizon, Krogers, Best Buy, etc. is data mining your personal information to forecast the risks and opportunities of doing business with you for themselves, the government, banking, health, insurance and all other businesses and organizations willing and able to pay for the data and analysis. That's why for a long time their business models didn't appear to add up... the real profit center is hidden and only now starting to be recognized.

All of this Big Data activity is completely non-transparent, largely unregulated, and out of sight and out of mind of the people being directly affected by it. It's actually much bigger and much scarier than what the NSA is doing. Acxiom is at the center of Big Data, and Big Data is Big Brother's Big Brother.

I prefer to conclude discussions of issues of concern by cueing up a possible solution. So what is a real-world solution, especially where there's a Who's Who of Corporate America in the game and the Supreme Court through the Citizen United ruling has given their big wallets unprecedented influence in government? A possible solution is suggested by the recent Federal Court ruling against the NCAA that if the university is monetizing the names and likenesses of college athletes, the universities need the athlete's permission and the athletes deserve a cut of the profits.

If a corporation is monetizing my consumption patterns and other personal information, they should need my permission, and I deserve a cut of the profits. It's not regulation; it's licensing.
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Lew Rentel
August 13, 2014 at 4:21 pm
Using gathered data to deceive.

In addition to collecting data, big money, corporations and the media are providing information that is based innuendo, lies, and half truths to distort peoples thinking especially for political influence in addition to buying people into their way of thinking. This allows them to influence political decisions that increase or improve their profits. Not only are they gathering data without over site they are duping the public into believing what ever it is that will help them move politicians in the direction that benefits them. No doubt in my mind that the data they gather is used to produce the lies and deceit that will influence the American public to buy into what big money wants them to believe. And the public in many cases is buying into their lies and deceit. Witness the untruthful emails, media information and other means of duping the public. They also gather religious information and use this to influence the believers. Gather, use the information for profit and devious, untruthful information for political gain and influence.

Author's Favorite
Mike Sutton
August 12, 2014 at 9:28 am
I can see another racket in this too

It has for some time annoyed me that credit profile companies such as Experian collect information on us and then advertise on the TV (in the UK) that for a small fee you can check your Experian report to ensure it is accurate.

I fail to see how that is effectively much different from a gangster threatening a business operator and demanding protection money so that people such as they will be prevented from doing harm to the "customer victim".

Author's Favorite
Paul A Duginski
August 11, 2014 at 3:10 pm
Really scary!
This is especially alarming, as you point out, in the context of corporations now being seen as people, and even people with religious views at that.
 
 
 
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