Driver Data Cutoff
DATA COMPILERS suffered a major defeat in January when the U.S. Supreme Court unanimously upheld the Driver’s Privacy Protection Act of 1994 (DPPA). In ruling that Congress has the power to control the release of driver information by state motor vehicle bureaus, the court removed the last apparent obstacle to enforcement of the Shelby amendment, a harsh new measure that expands on the opt-out restrictions in the DPPA.
The amendment, which takes effect June 1, requires that state motor vehicle programs get express permission from drivers before releasing data on them for marketing purposes. This shift from an opt-out to an opt-in could stymie the availability of age data and various vehicle identifiers now contained in DMV files.
The potential impact on compilers that use DMV data, such as Polk and Experian, is significant.
Much but not all of this information is available through other sources, but it will likely be more expensive, less reliable and less complete. Such vehicle information as make, model, year and color can be assembled through other sources, but the vehicle identification number provides particulars not available otherwise.
The good news is that DVM data already held by compilers is grandfathered – it is usable under the terms by which it was purchased. And there are a few exceptions to the new restrictions: The data will still be available for manufacturers’ safety recalls, statistical products, and services requested by the government. But whether the revenue from these limited markets covers the cost of acquisition – by some estimates tens of millions of dollars – is uncertain.
“I do see a mid- to long-term hit,” says Don Hinman, a group leader at Acxiom Corp. in Little Rock, AR. “There will be less coverage of data such as make and model of car, date of birth, height, and weight, and corrective lenses, for which driver’s licenses were the primary source.”
Acxiom does not purchase motor vehicle registrations, but it does acquire driver’s license data from 18 out of the roughly 25 states from which it is available. This costs Acxiom $1 million a year.
“On the average, those kinds of data will cost three to five times more, and you won’t be able to get as much,” Hinman adds, commenting on Acxiom’s costs. The data is useful for companies doing an age select, among other things.
Some compilers already are engaged in internal discussions about whether this expenditure is worthwhile. If they decide it isn’t, states could lose tens of millions of dollars in ancillary revenue.
The opinion reversed lower court rulings, finding that the DPPA was “incompatible with the principles of federalism inherent in the Constitution,” wrote Chief Justice William H. Rehnquist. Because driver’s information is an article of commerce, “its sale or release into the interstate stream of business is sufficient to support congressional regulation,” he said.
Although it did not specifically mention Shelby, Rehnquist’s opinion seems to validate the measure. “Under the amended DPPA, states may not imply consent from a driver’s failure to take advantage of a state-afforded opportunity to block disclosure, but must rather obtain a driver’s affirmative consent,” he wrote.
