Explained: How Consumer Data Right Legislation Will Impact You
The way in which your data is handled is about to be completely shaken up. Read our guide and find out.
In late 2017, the Australian parliament made a significant commitment to introducing an important piece of legislation through the house relating to the way in which Australian citizens interact with the data collected on them by energy, telecommunication and financial institutions. Known as the Consumer Data Right - or CDR - legislation, there are some significant changes in store for ordinary Australians. CDR legislation was created, in large part, as a government response to the Productivity Commission’s report on the current state of data regulation in Australia, which called for new technological ways to enable citizens will have a “comprehensive right” to access their data.
Amongst its findings, the report outlined that “improved availability of reliable data, combined with the tools to use it, is creating new economic opportunities. Increasing availability of data can facilitate development of new products and services, enhance consumer and business outcomes, better inform decision making and policy development, and facilitate greater efficiency and innovation in the economy.”
The government also issued a statement outlining that “the industry is seeking more standardised practices on financial data aggregation and government support for standard open-data application programming interfaces (APIs) to support FinTech innovators and give Australians better ways to understand, manage and maximise their finances.”
So, let’s dive in and have a look at how Australians look set to better understand and manage the data collected on them, get a better price, or ease the transition in switching to a completely new service provider.
What is it?
In short, a new set of rules are currently being drawn up for different industries relating to the collection of data. More specifically, these changes will give Australians the right to access the data that is collected on their behalf, and enables “the ability to request that data be passed, in a machine-readable format, to an accredited third-party (a rival service provider or someone that runs a comparison service, for example)” according to Computer World’s Rohan Pierce.
Some industry bodies have been critical of the roll-out of the legislation, which could arguably be linked to AGL’s recent criticism that the consumer data right is being “rushed” in its implementation in the energy sector to meet a July 1 deadline.
Central to their criticism is that the CDR is “not focusing on the consumer as the end beneficiary but instead focus on empowering and enabling data sharing between data holders and accredited data recipients in the broadest possible sense.”
“As a result, it does not feel as though the consumer is being put in the middle of the decision making in designing the framework,” AGL said.
Regardless of the critiques from industry, CDR legislation - in principle - gives a consumer more access to, and possibly more leverage from the data that has been collected on them when it comes to getting more competitive pricing from their telco or energy provider.
Who’s Writing the Rules?
The Australian Competition and Consumer Commision - or ACCC for short - has been assigned the herculean role in writing up the CDR rules as they apply to different industries. As a body, the ACCC is responsible for ensuring companies adhere to competition requirements mandated by the government, as well as protecting the rights of consumers. Sarah Court, ACCC Commissioner has previously issued a statement saying the ACCC is “looking forward to progressing the next phase of the Consumer Data Right, as it has the potential to greatly assist consumers who we know struggle to find the best offers in the energy market,”
Which it hopes will “Improve access to their energy data will help consumers find cheaper services and will promote transparency and innovation.”
“Deciding on the appropriate data access model in energy is the first step in offering certainty to energy sector participants as they continue [to] plan for the start of the CDR regime and develop new and innovative products that rely on reliable and secure sources of consumer data,” Court said.
There are different ways the ACCC is looking to go about this, according to reports. “One model would see the Australian Energy Market Operator hold all CDR data and be tasked with handing it over to recipients. A second would be an AEMO-run gateway that provides a central point allowing access to data to be requested. The third would be similar to the open banking rules and have individual data holders (such as energy retailers) be responsible for providing access to the data they possess.” according to PC World.
Upon completion and implementation, the Office of the Australian Information Commissioner will be responsible for the handling of consumer complaints.
How could this change the face of privacy legislation in Australia?
CDR is just one way in which the government is looking to change the data landscape of Australia. The ABC writes that “As the CDR is being developed, the competition regulator is taking a close look at Facebook and Google and their effect on Australia's economy.”
“It has suggested changes to our privacy laws may be needed, such as a right to delete your data...The Government is also working towards legislation that will allow more public sector data to be shared.” Ariel Bogle wrote.
The government is also looking to see how recently introduced legislation, similar to CDR will eventuate in the U.K., where it was implemented in the financial sector.
Consumer rights advocacy group Choice says their position is of optimism for a new set of legislation, but is well aware of possible unintended consequences, “particularly for vulnerable groups,” the ABC writes.
“Choice, for instance, wants to ensure the bill protects Australians from unfair price discrimination and problematic targeting by marketers and advertisers using CDR-obtained data.”
“Consider a scenario where a third party provides credit card comparisons using banking data released through the CDR.”
“If that provider's parent company offered other services, such as payday lending, it would be important that CDR data is not also used to market payday loans to high-risk customers.”
These unintended - and unwelcomed - consequences could be avoided, it is hoped by people like Choice’s policy and campaign advisor, Linda Przhedetsky who says that "telling people how data is used or will be used will not stop unscrupulous practices, so the system should prevent poor practices before they emerge," Ms Przhedetsky said.