Government ‘lays the tracks’ for data economy

The Treasury Laws Amendment (Consumer Data Right) Bill 2019 was introduced into Parliament by Federal Treasurer Josh Frydenberg. The bill will amend the Competition and Consumer Act 2010, the Privacy Act 1988, and the Australian Information Commissioner Act 2010 to include a consumer data right.

Under the proposed legislation, individual and business consumers will be able to access their own data, or direct custodians to share their data with accredited entities such as banks, telcos, energy companies and comparison service providers to get tailored access to services and competitive deals.

Under the bill, consumer data will be subject to “strong privacy safeguards” similar to the individual protections contained in the Australian Privacy Principles (APPs) as part of the Privacy Act, but more restrictive so that an “enhanced level of protection” is built around CDR data, specifically individual and small business consumer data, according to the bill’s explanatory memorandum.

During the first reading of the bill in parliament, the Treasurer said: “Only trusted and accredited third parties will be able to access data from data holders at the customer’s direction. Accreditation can be considered to be a ‘data safety licence’.”

The types of data that consumers will be able to request be shared with authorised recipients include basic contact and account information, product data and transaction data.

“For consumers, improved access to data will support better price comparison services, taking into account their unique circumstances, and promote more convenient switching between products and providers,” Mr Frydenberg said during the first reading.

“It will also leverage new technology such as artificial intelligence and allow consumers to make more informed decisions on where they spend their money.”

The Treasurer cited the Productivity Commission’s final report on competition in the Australian financial system, which found that the average household could save up to $1,000 a year on their home loan if they switched to another lender.

However, the report notes that oftentimes households choose not to refinance or don’t know how, unhelped by the “blizzard of barely differentiated products” on offer.

“Many consumers need assistance in understanding the choices open to them and how best to navigate the sheer volume of choices presented to them – choices that may not be presented in a way that allows them to make effective comparisons,” Mr Frydenberg said.

“The consumer data right provides efficient and convenient access to accurate information and empowers third parties to develop tools that will allow consumers to make the most of the choices available to them.”

For small businesses, the Treasurer said the CDR will allow for “more effective budgeting tools that can deal with data in real time and help them manage their cash flow and working capital more effectively than they can do today”.

The shared data would have to be in a CDR-compliant format, the bill stipulates, which will be determined by the Australian Competition and Consumer Commission (ACCC), in consultation with the Office of the Australian Information Commissioner (OAIC) and the Data Standards Body.

The ACCC has been delegated the lead role in setting up the rules around the CDR, educating consumers, accrediting new participants, overseeing the Data Standards Body, and enforcing breaches of consumers’ rights.

The bill further stipulated that the competition watchdog would be provided the power to determine how the CDR — which will initially apply to the banking industry before being rolled out across energy, telecommunications and other sectors — functions in each sector.

“This bill establishes a broader framework that can apply across all sectors to ensure that the data can be transferred in a safe and secure way, while retaining the flexibility to recognise that data access arrangements must be able to adapt to different sectors, different data sets, different risks, different customers’ needs and changing technologies,” Mr Frydenberg said.

“This bill allows for the growth and evolution of the consumer data right by allowing new data sets to be added over time.”

The government will be required to seek the advice of the ACCC and the OAIC when deciding whether the CDR should apply to new sectors or datasets.  

The bill also stipulates that a government review of the CDR be completed by 1 January 2022 to “confirm that the system is operating as intended” and to assess the impacts of the system on consumers and industry.

[Related: ASIC to update responsible lending guidance]