Citizens should be able to use their own usage data to easily switch energy retailers, telcos, banks, health and educational providers, according to Digital Transformation Minister, Angus Taylor.
In a far reaching speech in Washington DC, Taylor has laid out a powerful case for a “universal data right” for citizens to “own” their data, to promote mobility between providers and to encourage a new form of consumer-led competition.
The push by Taylor echoes a similar recommendation by the Productivity Commission to give citizens a right over the data created about them to promote competition in areas where consumer mobility has been notoriously problematic.
That report has been under consideration by a working group at the Department of Prime Minister and Cabinet, but the Taylor speech suggests the government is now inclined to accept the controversial core recommendation. The proposal will challenge the big providers such as the banks, telcos and energy utilities, who are wary about sharing what they say is proprietary data about their customers usage patterns. Many have invested heavily in CRM and sophisticated marketing systems to track and segment their user bases and are wary about competitors siphoning off high-value customers, using the very data the incumbent providers have curated.
The proposal will also be closely watched by the e-commerce and marketing industry, and in particular the big marketing platforms led by Google and Facebook, who apply usage data to drive buyers and sellers together.
Taylor laid out a vision for universal access to data and access to a common digital identity as the foundation for a new competition regime.
“Now I am an economic liberal. I do believe that the market is best left to its own devices whenever that is possible. But there are occasions where the government can play a crucial role. And I am convinced that universal access to data and access to a common digital identity for businesses and citizens is one of those areas,” Taylor told a data transparency conference in Washington today.
“In financial services, energy and telecommunications, as well as the provision of public services like health and education, consumers are struggling, with a proliferation of plans and high barriers, to switch between providers. We believe that in the modern digital economy, access to open standardised data and a common understanding of digital identity are the next great enablers of competition in Australia.”
Taylor said competition policy would continue to focus on anti-competitive behaviour but that by enabling consumers access to their data they would be able to regulate markets themselves.
“Enabling consumers to regulate markets themselves is, in my view, where competition policy can make big new inroads. We have seen consumers taking more control of markets with taxis and accommodation through applications like Uber and AirBnB. But we need to broaden that very powerful idea of consumer as regulator. Frankly, they do a better job.”
“Greater access to comparison data and reduced switching costs will facilitate increased choice, better service and reduced outlays for all Australians. We are currently working towards providing a platform of policy, legislation and standards that will support consumers to get a better deal.”
Citing energy as an example, Taylor said consumers wanting to reduce their costs or improve services need to make complex price and service comparisons using their own historical usage.
“To fix this, we need to allow energy users to own [our emphasis] their own data. This will allow them, or more likely third parties, to make comparisons of available plans using that data.”
“But we also need to make it easier to switch to a better plan, and that means having an easily accessible and fraud-proof digital identity. In practice, customers need to establish their identity with a new service provider, with just the click of a button. In Australia at least – the Government does have a clear role in enabling this well informed choice.”
Taylor said this was being supported by the government’s response to the Productivity Commission’s report on Data Availability and Use and the Digital Transformation Agency’s trusted digital identity framework.
Describing the interventions he said the government is working with industry to develop a standardised set of APIs (technical connectors that link software systems together) that must make data easily available to consumers and their agreed third party advocates.
He said these API’s must be specific to each industry and will typically include usage history, pricing and package information. They would be be combined with a government-facilitated digital identity that allows providers to trust pre-established identities with high levels of integrity.
This would enable users “to jettison the endless lists of changing usernames and passwords that drive us all mad, on a daily basis.”
“These two initiatives are the bedrock that would allow any consumer to access a service better suited to them in a matter of minutes, and with little hassle. As someone who has focused on competition policy for much of my career, this is a massive breakthrough, offering customers and businesses enormous benefits.”
Taylor also laid out a large scale plan to standardise business data reporting to government, citing the early success of using standard data input to automate tax reporting by business directly from their accounting systems.
“Fundamentally the big idea is that multiple regulatory agencies can adopt a single open data structure for the information they collect from companies. In simple terms, this means they can report quickly and simply, direct from their accounting systems.
He said the main lesson from the ATO program has been that by creating a platform of standards and policies, software firms have been able to build products that help companies compile and report their regulatory filings automatically.
“Without those common government facilitated data fields the program would not have been the success it is today.
Taylor’s full speech is available for download here.