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FTC should probe payroll data deals by brokers like Equifax, rival says
Signage is seen at the Federal Trade Commission headquarters in Washington, D.C., U.S., August 29, 2020. REUTERS/Andrew Kelly/File Photo
OAKLAND, Calif., Sept 27 (Reuters) – The U.S. Federal Trade Commission should investigate how data brokers including Equifax Inc (EFX.N) and Experian Plc (EXPN.L) have amassed payroll records about most Americans, a small rival urged in a letter to the agency on Monday that was 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 of individuals. But these big databases are vulnerable to theft and error, and workers are sometimes surprised their records are included, according to privacy activists.
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, San Mateo, 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 paychecks. The letter describes the agreements as anticompetitive and potentially unlawful.
"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," Certree Chief Executive Pavan Kochar wrote.
The FTC declined to comment. Under new Chair Lina Khan, the agency has sought to increase enforcement on competition and privacy grounds.
Equifax in March 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 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 last year, sells software to employers that enables 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."
Reporting by Paresh Dave; Editing by Kenneth Li and Stephen Coates
Our Standards: The Thomson Reuters Trust Principles.
Paresh Dave
Source:www.reuters.com
