[US] FTC should probe payroll record deals by data brokers

The U.S. Federal Trade Commission (FTC) should investigate how data brokers including Equifax Inc and Experian Plc have amassed payroll records about most Americans, a small rival has urged, Yahoo Finance reports.

The request was made in a letter to the agency on September 26 that was reportedly seen by Reuters.

For decades, companies such as Equifax have acquired employee work histories and compensation data from employers to help lenders, landlords, hiring managers and other customers perform background checks on individuals. However these big databases are vulnerable to theft and error and, according to privacy activists, workers are sometimes surprised to learn that their records are included.

Equifax said it follows all laws and welcomes additional voices in the industry.

Experian did not respond to requests for comment.

In the letter to the FTC, California-based startup Certree said that Equifax and Experian are providing financial incentives like a slice of their revenue to employers to gain exclusive access to payroll data. Equifax also has deals with payroll software vendors that help employers process paycheques. The letter describes the agreements as anticompetitive and potentially unlawful.

In the letter, Certree Chief Executive Pavan Kochar wrote, "This business model has created unique harms to consumer privacy, data security, choice, and financial security, and it has led to business practices that stifle innovation and competition." 

The FTC declined to comment. The agency has sought to increase enforcement on competition and privacy grounds, under its new Chair Lina Khan.

In March, Equifax described its Workforce Solutions unit, which included the payroll data on 105 million people, as its "fastest growing, highest margin, and most valuable business," with just over $2 billion in revenue.

The company reportedly said workers can view or block access to records and that it has improved data security.

Experian's employment verification service launched last year.

Certree, which also debuted in 2021, sells software to employers enabling millions of workers to manage and share their employment records through a private digital vault. But in the letter, Certree said the exclusivity deals pose "enormous obstacles."

Source: Yahoo Finance

(Quotes via original reporting)

The U.S. Federal Trade Commission (FTC) should investigate how data brokers including Equifax Inc and Experian Plc have amassed payroll records about most Americans, a small rival has urged, Yahoo Finance reports.

The request was made in a letter to the agency on September 26 that was reportedly seen by Reuters.

For decades, companies such as Equifax have acquired employee work histories and compensation data from employers to help lenders, landlords, hiring managers and other customers perform background checks on individuals. However these big databases are vulnerable to theft and error and, according to privacy activists, workers are sometimes surprised to learn that their records are included.

Equifax said it follows all laws and welcomes additional voices in the industry.

Experian did not respond to requests for comment.

In the letter to the FTC, California-based startup Certree said that Equifax and Experian are providing financial incentives like a slice of their revenue to employers to gain exclusive access to payroll data. Equifax also has deals with payroll software vendors that help employers process paycheques. The letter describes the agreements as anticompetitive and potentially unlawful.

In the letter, Certree Chief Executive Pavan Kochar wrote, "This business model has created unique harms to consumer privacy, data security, choice, and financial security, and it has led to business practices that stifle innovation and competition." 

The FTC declined to comment. The agency has sought to increase enforcement on competition and privacy grounds, under its new Chair Lina Khan.

In March, Equifax described its Workforce Solutions unit, which included the payroll data on 105 million people, as its "fastest growing, highest margin, and most valuable business," with just over $2 billion in revenue.

The company reportedly said workers can view or block access to records and that it has improved data security.

Experian's employment verification service launched last year.

Certree, which also debuted in 2021, sells software to employers enabling millions of workers to manage and share their employment records through a private digital vault. But in the letter, Certree said the exclusivity deals pose "enormous obstacles."

Source: Yahoo Finance

(Quotes via original reporting)