How tech companies gained access to our tax data
Tax companies shared data through tracking pixels used for advertising purposes, a congressional investigation revealed Wednesday. Many of them say they’ve removed the pixels, but it’s unclear whether some sensitive data is being held by tech companies. The findings reveal significant privacy risks posed by advertising and data sharing, and it’s possible that regulators can do something about it.
What is the story? In November 2022, Markup published an investigation into tax preparation companies, including TaxAct, TaxSlayer, and H&R block. The sites were found to be sending data to Meta through the Meta Pixel, a commonly used piece of computer code that is often embedded into websites to track users. The story prompted a congressional investigation into tax companies’ data practices, and that report, released Wednesday, found things far worse than even Markup’s damning report suggested.
Tech companies have had access to highly sensitive data, such as millions of people’s incomes, the size of their tax refunds, and even their participation status in government programs, since 2011. Meta said it used the data to target ads to users on its platforms and to train its artificial intelligence programs. It appears that Google did not use the information for its commercial purposes as directly as Meta, although it is unclear whether the company used the data elsewhere, an aide to Sen. Elizabeth Warren told CNN.
Experts say both the tax and tech companies could face significant legal ramifications, including private lawsuits, challenges from the Federal Trade Commission and even criminal charges from the US federal government.
What are tracking pixels? At the center of the controversy are tracking pixels: bits of code that many websites embed to learn more about user behavior. Some of the most commonly used pixels are made by Google, Meta and Bing. Websites that use these pixels to collect information about their own users often share this data with large technology companies.
The results may include information such as where users click, what they type, and how long they scroll. Highly sensitive data can be obtained from such activities. This data can be used to target ads according to what you may be interested in.
Pixels allow websites to communicate with advertising services across websites and devices so that the ad provider can learn about the user. These are different from cookies, which store information about you, your computer and your behavior on every website you visit.
So what are the risks? These tracking pixels are everywhere, and many of the ads that appear on the web are served under their instructions. They contribute to the Internet’s dominant economic model, which favors data collection for the benefit of targeted advertising and hyper-personalization online. Often, users are unaware that the sites they visit have pixels. In the past, privacy advocates have warned about pixels that collect data about users accessing abortion services, for example.
