Tuesday, June 20, 2006

Data Brokers

Let's say that you are a police detective. Over the course of your work, you discover that John Smith is a hit man -- somebody who commits murder for hire. What do you think would be the right thing to do in these circumstances? Should you:

(a) Investigate with the intent of arresting and convicting him for his crimes?

(b) Employ him to do away with somebody that has been an annoyance?

Let me add one more item that may make your decision a little easier. Let us assume that, as a police officer, you do not need to pay for any hits that you might ask for. He will kill your victims for free, so long as you allow him to stay in business where he can charge others for his service.

I know, it's a tough question. I'm sorry to make you struggle through these tough moral dilemmas. However, there is a point here somewhere. I promise that I will get to it shortly.

In the mean time, let me change the situation just a little bit. John Smith is not a hit man; he is a car thief. Instead of telling you that he will kill whomever you want for free, he tells you that he will get you whatever car you want for free. All you need to do is name the car -- make, year, color -- and he will get it for you. The only thing you need to do is to turn let him stay in business so that he can continue to provide cars for his other clients, for a fee.

Should you:

(a) Investigate whether John Smith is stealing cars?

(b) Give John Smith an order for a baby blue '57 Chevy in mint condition?

We could make John Smith a drug peddler. In this case, John Smith offers the police a free sample -- or, at least, a discount on its purchases. In exchange, the police agree not to investigate John Smith.

Okay, let's make one last change. John Smith steals data, rather than cars. Stealing data is a lot easier than stealing cars because it is hard for the victim to discover that he has been robbed (provided that the thief only steals a copy of the data.) He steels phone records, bank and credit card statements, and the like and he offers them for sale to whomever will pay for them.

Typically, he gets this information through fraud. He contacts a company that has information on his victim, he pretends to be the victim, and he has the company send him a copy of the data he wants.

Recall, as a police detective, John Smith will give you any information you want free of charge. Of course, he will allow you to pay if you feel guilty about taking these stolen goods. He will take your money. He just wants to keep you happy, so that you can keep him in business.

Should you:

(a) Investigate whether John Smith is engaging in fraud.

(b) Give John Smith an order for whatever data you may want to acquire.

I know, this is a tough question. Some people surprisingly reach the conclusion that John Smith should be investigated with an eye towards arresting him for fraud and other crimes. Some people even go so far as to suggest that those who take this data should be arrested and convicted for taking kickbacks in exchange for turning their back on illegal activity.

Of course, you and I know that this is not how things actually work. It is perfectly acceptable for you, the police detective, to collect these free offers and to leave these individuals alone to continue their business.

Government agencies have paid $30 million for merchandise, and collected an unknown amount of free merchandise, from these data thieves. In exchange, law enforcement officers turn their backs on these fraudsters, allowing them to stay in business and to continue practicing their trade.

Effectively, the law enforcement officers answered questions as to why they do not investigate these data brokers by saying, "If they provide us with free merchandise or high quality merchandise at a price we can afford, then we are not going to investigate them."

One of them compared their activities with the NSA, saying, "

James Bearden, a Texas lawyer who represents four such data brokers, compared the companies' activities to the National Security Agency, which reportedly compiles the phone records of ordinary Americans.

"The government is doing exactly what these people are accused of doing," Bearden saidl "These people are being demonized. These are people who are partners with law enforcement on a regular basis."

The hit man, car thief, and drug dealer -- offering free or discount services to law enforcement agencies -- could also claim to be partners with law enforcement to an extent. This hardly qualifies as a reasonable defense of these activities.

In fact, that is the entire problem. Where criminals and law enforcement agencies form partnerships, it becomes impossible to distinguish one from the other.

Of course, somebody may want to claim that these law enforcement agencies are only collecting information on criminals. They are not collecting information on average citizens -- say, people they want to date, neighbors who annoy them, bosses, employees, or those who may have an interest in paying blackmail.

Sure, these things are not happening.

Remember, "Only those who have something to hide have something to fear."

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