The Week | June 20, 2012

When you think of the surveillance state, you usually think of snoopy alphabet-soup government agencies like the FBI, IRS, DEA, NSA, or TSA, or cyber-snoops at Facebook or Google, says Natasha Singer in The New York Times. But there's a company you've probably never heard of that "peers deeper into American life," and probably knows more about you than any of those groups: Little Rock–based Acxiom Corp. Jeffrey Chester at the Center for Digital Democracy has dubbed Acxiom "Big Brother in Arkansas," while Gizmodo's Jamie Condliffe calls it the "faceless organization that knows everything about you." Here's what you should know about the company: 

What is Acxiom Corp., and what does it do?
The company fits into a category called database marketing. It started in 1969 as an outfit called Demographics Inc., using phone books and other notably low-tech tools, as well as one computer, to amass information on voters and consumers for direct marketing. Almost 40 years later, Acxiom has detailed entries for more than 190 million people and 126 million households in the U.S., and about 500 million active consumers worldwide. More than 23,000 servers in Conway, just north of Little Rock, collect and analyze more than 50 trillion data 'transactions' a year. "In essence, it's as if the ore of our data-driven lives were being mined, refined, and sold to the highest bidder, usually without our knowledge," says The Times' Singer.

What kind of data does it have?
"If you are an American adult," says Singer, "the odds are that it knows things like your age, race, sex, weight, height, marital status, education level, politics, buying habits, household health worries, vacation dreams — and on and on." It does more than collect that information, though. It uses it to pigeonhole people into one of 70 very specific socioeconomic clusters in an attempt to predict how they'll act, what they'll buy, and how companies can persuade them to buy their products. It gathers its data trove from public records, surveys you've filled out, your online behavior, and other disparate sources of information, then sells it to banks, retailers, and other buyers. 

Do other companies do this, too?
Yes, it's a very competitive and lucrative business — Acxiom reported a $77.26 million profit last fiscal year, and it's the No. 2 company in the business, after Epsilon. But analysts say that Acxiom has the world's largest database on consumers. "There are a lot of players in the digital space trying the same thing," Piper Jaffray analyst Mark Zgutowicz tells The New York Times. "But Acxiom's advantage is they have a database of offline information that they have been collecting for 40 years and can leverage that expertise in the digital world."

Is this legal?
Yes, but the Federal Trade Commission is asking Congress to step in to make the data-marketing industry more transparent. Unlike consumer reporting agencies that compile and sell your credit score, date-miners like Acxiom don't have to tell individuals what they know about them. Privacy and consumer advocates say that's troubling, since the companies are selling sensitive, potentially embarrassing, and possibly false information about you, and you can't correct errors. As FTC chairman Jon Leibowitz says, Acxiom and its peers are "the unseen cyberazzi who collect information on all of us," and we should have the right to know what they've found. 

How sketchy is this?
If you're worried about Google or Facebook tracking you online, or holes in your iPhone security, this is much worse, says Gizmodo's Condliffe. We sort of knew that commercial data-miners existed, but "Acxiom operates on a terrifying scale," and it's very likely that the company has an ever-growing dossier of 1,500 data points on you. The Times' "alarmist piece" about Acxiom conspiring to serve you "extremely accurate ads" would be more frightening, says Kashmir Hill at Forbes, if, on the same day, on the same page, the paper hadn't run "an alarmist piece about how it's impossible to know a person's age online, and thus impossible to keep creepy old pedophiles from lurking on kids' sites." Well, which is it? The media is sending mixed message on the state of online privacy, and this is just one extreme example.