United States: Vermont AG Issues Guidance On New Data Broker Regulation

Last Updated: December 26 2018
Article by Daniel M. Goldberg

Vermont's new Data Broker Regulation ("Regulation") takes effect on January 1, 2019. The Regulation requires, among other things, that data brokers register with the Vermont Secretary State and protect personally identifiable information of Vermont residents. This week, the Vermont Attorney General issued guidance on the Regulation, which helps address questions on process and scope. Below are some of the key takeaways from the Regulation and guidance.

  • Data Broker Obligations and Registration Process

Under the Regulation, data brokers: (1) must register annually with the Vermont Secretary of State; and (2) have a duty to protect personally identifiable information of Vermont residents. Businesses that fall within the definition of a data broker for 2018 (more on that below) must register as a data broker by mail or through the online form by January 31, 2019. There is a filling fee of $100. Businesses that don't register by the deadline and are found to be data brokers face penalties of $50 per day up to a maximum of $10,000 per year, in addition to relief resulting from a violation of the Regulation (also discussed below).

  • Registration Form and Opt Out Information

The guidance includes a copy of the annual filing form as Appendix A. Data brokers must provide:

  • a company contact;
  • the name and physical, email, and internet address of the data broker;
  • whether the data broker permits consumers to opt out of the data broker's collection of brokered personal information (defined below), databases, or certain sales of data, and if so, information about the opt out;
  • a statement specifying the data collection, databases, or sales activities from which a consumer may not opt out;
  • and (6) a statement regarding whether the data broker implements a purchaser credentialing process;
  • the number of security breaches the data broker has experienced during the prior year and, if known, the number of Vermont residents affected by the breaches;
  • information regarding its practices for brokered personal information of minors;
  • any additional information concerning their data practices (this response is optional); and
  • a certified signature.

The guidance addresses a number of questions about how to fill out the form. In particular, the guidance clarifies that the Regulation does not require data brokers to change their practices or give consumers the right to opt out of data collection, sales, or storage, provided that data brokers must disclose their opt out practices, and if they offer opt out, specify the scope of and any restrictions around those opt outs.

  • What Is a Data Broker

The Regulation defines data broker as a business that (1) knowingly collects and sells or licenses to third parties (2) the brokered personal information (3) of a consumer with whom the business does not have a direct relationship. The guidance sheds light on each of these requirements.

  • Collects and sells or licenses to third parties

The guidance explains that data brokers both collect and sell or license data. If your business only collects data for its own use or analysis (such as acquiring a list of individuals in order to market to them or customize product offerings), but does not sell or license it, you are not a data broker.

Collection is a broad term that includes the purchase or licensing of data from third parties or third party sources (such as public records or internet searches). Sale or license means supplying data to a third party in exchange for something in return (which can be money, other datasets, or anything of value). The difference between a sale and license is that ownership passes to the recipient in a sale while ownership stays with the licensor in a license.

Many businesses may be concerned about the license aspect of the Regulation. If you enter into a contract with a service provider to license data, does that license fall within the definition of license under the Regulation? According to the guidance, the answer is no so long as the recipient can only use that data for the sole benefit of the owner. For example, "[a] company providing data of non-customers to an analysis firm that will clean up, analyze, or supplement the data, and then return the data set to the provider, is not licensing the data, so long as the analysis firm is not permitted to continue to use the data for its own purposes or resell the data."

The license restriction highlights the importance of careful contract drafting and negotiation. If your agreements with your service providers allow for them to use the data you provide for their own purposes (such as improving their services), you are more likely to be giving them a license within the definition of the Regulation. Further, if your agreements accidentally or interchangeably use the term "sell" instead of "license," you might find your business subject to restrictive obligations under both the Regulation and the new California Consumer Privacy Act.

  • Brokered Personal Information

Under the Regulation, brokered personal information means computerized data elements about individuals residing in Vermont, including: (i) name, (ii) address, (iii) date of birth, (iv) place of birth, (v) mother's maiden name, (vi) unique biometric data, (vii) name or address of a member of the consumer's immediate family or household, (viii) SSN or government issued ID, or (ix) "other information that, alone or in combination with other information sold or licensed, would allow a reasonable person to identify the consumer with reasonably certainty."

This last catch-all data element is particularly significant. According to the guidance, businesses have a duty to determine whether data is reasonably re-identifiable. The guidance suggests that the catch-all requires a broad interpretation since data can be "easily" re-identified using as few as three data elements and from "anonymized" datasets such as customer transaction records, online movie viewing history, hospitalization records, and taxi ride records.

  • No Direct Relationship

The third requirement for establishing a data broker is that the brokered personal information must relate to consumers with whom the business does not have a direct relationship (whether past or present). Rather than focus on situations where a business does not have a direct relationship with consumers, the guidance provides examples of where a business does have a direct relationship with consumers and is not a data broker. Some of these examples include a retailer that sells information about its own customers, a platform that sells information about its own users, and a magazine that sells information about its own subscribers.

  • Obligations that Apply to All Businesses

The guidance issues a reminder that the Regulation also includes obligations that apply to all businesses. Under the Regulation, all businesses must maintain reasonable data security to protect personally identifiable information of Vermont residents (which has a different definition than brokered personal information) and not use brokered personal information for prohibited purposes. With respect to the security obligation, while all businesses must protect personally identifiable information, data brokers are held to a higher standard due to the nature of their data intensive businesses.

  • Penalties and Relief

The guidance restates that a violation of the Regulation constitutes a violation of Vermont's Consumer Protection Act, and that all businesses (not just data brokers), are subject to the penalties and relief. The Consumer Protection Act allows for actions both by the Attorney General (for penalties of up to $10,000 per violation plus other relief) and consumers (for damages, attorney's fees, and other relief).


This post first appeared in Frankfurt Kurnit's Focus on the Data blog (www.focusonthedata.com). It provides general coverage of its subject area. We provide it with the understanding that Frankfurt Kurnit Klein & Selz is not engaged herein in rendering legal advice, and shall not be liable for any damages resulting from any error, inaccuracy, or omission. Our attorneys practice law only in jurisdictions in which they are properly authorized to do so. We do not seek to represent clients in other jurisdictions.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions