Is the ad business, specifically the big data-obsessed holding companies, sleepwalking into disaster as they try to hoover up information about consumers everywhere?
Epsilon, which Publicis Groupe bought for $4.4bn in 2019, has agreed a $150m settlement with the US Department of Justice to reslove criminal charges relating to the selling of data to scammers using “elder fraud” schemes.
Epsilon admitted its DTC unit sold information about 30 million consumers. $127m of the settlement goes to victims.
The DoJ says: “Companies who sell consumer information have a responsibility to avoid knowingly selling it to those who will use the data to defraud or swindle consumers. (We) hope other data companies will take note of this outcome and ensure that they don’t likewise help fraudsters.”
Publicis says: “The conduct at issue in the agreement relates to activities that last occurred in 2017, long before Publicis acquired Epsilon. Alliance Data Systems, the former owner of Epsilon, has agreed to indemnify Publicis for all costs related to the DOJ investigation and resolution, including the monetary payment.”
So Publicis wasn’t caught asleep at the wheel in the sense that it knew what was coming. But online data privacy is a growing issue and ad-based businesses are vulnerable to such punishments, which will surely grow, if they misbehave.
Ad Contrarian Bob Hoffman has been saying for years that ad businesses are at the root of the online privacy crisis with their desperate rush to acquire and sell data of their own. Many see this as an alternative to data giants Google, Facebook et al.
But this is a rather loud warning shot across their bows.