Consumers, not companies, are the priority of data governance

By Lauren Solomon

March 5, 2019

A lack of unity blights the three processes governing the use of Australian consumers’ online data, says the head of the Consumer Policy Research Centre. Lauren Solomon calls for the best minds from a range of sectors to determine the path Australia will take in an AI and machine-learning world.

Knowledge is power. And last month Germany’s competition regulator, the Bundeskartellamt, decided that Facebook—in combining user data from Facebook, Instagram, Whatsapp, third-party websites (who display Facebook likes) and smartphone apps—has an awful lot of power and information about users, thanks to the collection and amalgamation of data across many different sources.

Many believe the fourth industrial revolution is now upon us. AI and machine-learning are being deployed in a range of sectors, but we still have not yet properly considered, perhaps, the most important thing: the fuel.

The fuel is the data.

Who owns the data? How will the data be valued? How will the data be regulated?

The Bundeskartellamt has proposed significant restrictions on the extent to which Facebook can amalgamate and process data without consent of users. In the regulator’s view, the user terms and conditions underpinning these arrangements were not justified under data-protection principles, or competition law standards.

While the EU has been deeply considering personal data protection since around 2011, in Australia, we’ve only just seen the first thorough analysis of the intersection of privacy, consumer protection and competition laws, in the form of the ACCC Digital Platforms Inquiry.

The ACCC Preliminary Report demonstrated the significant information asymmetries and power imbalance present between platforms and consumers. Also mirroring Consumer Policy Research Centre (CPRC)’s own 2018 findings, the report found an inability for consumers to make informed choices about their data, due to the bewildering, complex, vague and lengthy nature of Privacy Policies enabled by the Privacy Act.

Which are the ‘good’ and ‘bad’ privacy products and services?

Of the consumers we surveyed, 95% wanted the ability to opt out of certain types of data collected, shared and used, and 91% only wanted the data essential for delivering the product or service to be collected.

Lack of transparency not only undermines consumers’ abilities to make informed choices but it also limits the extent to which firms can compete on privacy, because consumers have little-to-no chance of being able to identify ‘good’ or ‘bad’ privacy products and services.

It’s not just civil society raising these issues, it’s business, too. At the recent World Economic Forum in Davos, Microsoft CEO Satya Nadella spoke about digital trust and transformation, stating that the default had to be that consumers owning their data; further, IBM CEO Ginni Rometty declared we need a new era of data responsibility.

It’s never been a more important time to make an active choice about how economy-wide data ownership and regulation will work in our country and globally.

While we have three different processes in Australia to address consumer data (the Consumer Data Right, the Digital Platforms Inquiry, and the Data Sharing & Release Act), each takes a differing view on certain fundamental lynchpins such as: what genuine consumer ‘consent’ looks like when data is collected, shared and used; and whether consumers should have a right to delete their data. We strongly support moves by the Australian government to improve consumer choice through data portability, but we also need to design a safe economy-wide environment for data to be opened up within.

What we really need is an integrated, root-and-branch review of data governance and regulation in Australia. And we need the best and brightest minds from across the sectors and the disciplines to be a part of it. Computing science, privacy, industry specialists, human rights advocates, consumer protection and competition law experts all have a role to play.

It’s going to be a long road, grappling with big questions. But for Australia to deliver innovation and inclusive growth consistent with community values, we owe it to the generations to come to get started on a robust policy process now. It’s an investment in one of the biggest challenges and opportunities we now face.

Lauren Solomon is the CEO of the Consumer Policy Research Centre and will be moderating a session on data governance at the Australian Human Rights Commission AI symposium today in Sydney.

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