Economy-wide reform required to protect consumers

Friday 26 July 2019 – Consumer Policy Research Centre (CPRC) welcomes the release of the Australian Competition and Consumer Commission (ACCC) Digital Platforms Inquiry Final Report.

CPRC CEO, Lauren Solomon highlighted the national and international significance of the report. The growing harms from the information and power imbalance between digital platforms and consumers requires a coordinated and significant policy response.

“Australian consumers are long overdue the added protections now required in the digital age, similar to measures that have already been introduced in the EU and US,” said Ms Solomon.

“We welcome the ACCC’s Final Digital Platforms Inquiry Report and the explicit acknowledgement of market and regulatory failure in Australian personal data collection practices. The ACCC have also highlighted that our Privacy Act is likely not fit for purpose in this new environment, recommending broader review of objectives and scope.”  

“Our research found consumers are in the dark about how much data is being collected, who it’s being shared with and what it’s being used for. More than 95% of those we surveyed wanted more options to opt out of data collection, and 91% wanted only the data required to deliver the service to be collected.”  

“The speed and scope of transformation in the digital economy is creating distinct policy challenges. Globally, governments and businesses are recognising the need for government intervention. Reforms need to be focussed on transparency, protecting fundamental human rights, preventing exploitation and ensuring consumers gain a fair share of the value generated by new data-fuelled technologies.”

“CPRC strongly supports the recommendations contained in this report. If adopted, this will be a step in the right direction to ensuring we have appropriate economy-wide protection framework to protect consumers while enabling innovation to thrive and economies to grow. The digital economy simply cannot operate without the trust of consumers and the broader community in the long-tem.”

CPRC’s A Day in the Life of Data report released in May 2019 lifted the lid on the scale and scope of data being collected, shared and used without explicit consumer knowledge or consent. And our Consumer data and the digital economy: Emerging issues in data collection, use and sharing report released in July 2018 highlighted just how frustrated consumers are with the lack of control and choice about what happens to their data and personal information.

Many of CPRC’s key recommendations and research findings were consistent with the ACCC’s report, including:

  • Improving transparency and meaningful consent. Recommendations to reform the Privacy Act to require companies to be much more transparent about what they’re collecting, who they’re sharing with and obtain meaningful consumer consent for that are long overdue. Consumers cannot make informed choices in the current environment, often forced into take-it-or-leave-it terms.
  • Increasing control and choice. Recommendations to enable consumers to erase their data would bring Australia in line with protections in Europe. Consumers need to be able to tell companies that they no longer trust, or want to engage with, that they want their information deleted. The latest Consumer Data Right consumer research shows over 50% of consumers expect services to delete personal data once consent is revoked.[1] We also support data sharing settings being defaulted to ‘off’ requiring consumers to opt in.
  • Increasing penalties. The ACCC recommends that breaches of the Privacy Act mirror increased penalties for breaching Australian Consumer Law. This reflects the increasing value of personal data in the data collection, sharing and use landscape in Australia.
  • Addressing unfair and exploitative practices. The ACCC recommends that unfair contract terms be illegal rather than just voidable. The introduction of a general unfair trading prohibition is also going to be key to protecting consumers from manipulation and exploitation.

[1] Tobias, Data61, CHOICE (2019) Design to Thrive, Design to Bias (online report accessed 24 June 2019)

Key findings from CPRC research – A Day in the Life of Data (May 2019):

  1. Data tracking is increasingly inescapable. Trackers are common offline and online. Even non-users of major services such as Google and Facebook are being tracked by those companies.
  2. Data collection is largely opaque. Consumers don’t understand what they are handing over or the value of that data. Policymakers will find it difficult to design effective remedies unless the supply chain governing data collection, sharing and use is more transparent.
  3. Consumers feel overwhelmed by privacy policies with limited understanding of, or control, over their data.
  4. Targeted advertising is not the major harm. The more significant harms – and the harms that policymakers and regulators should be discussing – are the growing risk of consumer manipulation, discrimination and exclusion based on automated decision-making using online and offline profile data.
  5. Transparency and accountability are key. The key issues for policymakers are requiring transparency, enabling consumer comprehension and control, implementing accountability measures (for data collection and for automated decision-making), and establishing minimum protection standards.

Key findings from CPRC research – Consumer Data and the Digital Economy (July 2018):

  1. 95% of consumers wanted companies to give options to opt out of certain types of information collected about them, how it can be used and/or what can be shared with others.
  2. 91% of consumers agreed that companies should only collect the information currently needed to provide the service.
  3. When asked ‘what data/information would you be uncomfortable with companies sharing with third parties for purposes other than delivering the product or service’, the four highest-ranking answers were: Phone contacts (87%), Messages (86%), Device ID (84%), Phone number (80%).
  4. Of the Australians surveyed who reported reading a Privacy Policy or Terms and Conditions for one or more services/products in the past 12 months:
    • Two- thirds (67 per cent) indicated that they still signed up for one or more products even though they did not feel comfortable
    • The most common reason (73 per cent) for accepting privacy policies with which consumers were not comfortable was that it was the only way to access the product or service
  5. Consumers surveyed found it unacceptable for companies to:
    • Charge different consumers different prices based on their (data) profile (88%)
    • Collect data about them without their knowledge to assess eligibility or exclude from a loan or insurance (87%)
    • Use payment behaviour data to exclude from certain essential products and services (82%)