Chapell & Associates

Thursday, December 28, 2006

Database Acquisition Déjà Vu?

Except for the online ad serving component, Alliance Data Systems (“ADS”) seems to be transforming itself into DoubleClick – or at least DoubleClick as it used to be. Epsilon bought DoubleClick’s email division back in April, and now has acquired Abacus, DoubleClick’s data division. Abacus’ cooperative databases contain lots of consumer transaction data – many people buy from Abacus’ cataloguers, which also have websites and retail stores. ADS will now have the ability to marry significant consumer financial data derived from its existing loyalty program and credit card customers with consumers’ retail purchasing histories. One question is “How does ADS plan to use the consumer models and transaction data that Abacus houses?” Another is “Will ADS be able to honor all of the privacy promises that appeared on Abacus’ members’ e-commerce websites?” And yet another: “What additional uses will ADS make of these data, given its robust email delivery capabilities?”

With its movement into the retail consumer information sphere, ADS could qualify as a “data broker” (as defined in some proposed legislation) and become the object both of regulation, with regard to its use of data, as well as a target for information-hungry government agencies. With the memory of DoubleClick’s privacy challenges when it acquired Abacus still relatively fresh in regulators’ and privacy advocates’ minds, ADS needs to tread carefully as it examines the uses to which it can apply its data.
posted by Elise on Thursday, December 28, 2006

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