Beverley Head
April 18, 2016

Govt establishes PC data inquiry

Data Policy

Govt establishes PC data inquiry

Peter Harris: Policy on "big data analytics may need to move out of the back room"

The Productivity Commission has called for submissions to its inquiry into Data Availability and Use which seems set to impact organisations’ ability and opportunity to leverage consumer and citizen data.

A review into the use, access to, and management of data was recommended by the 2014 Financial Systems Inquiry and the 2015 Harper Review of Competition. With the Data Inquiry now launched, Treasurer Scott Morrison has signalled that the Government feels policy settings regarding data use could need reform.

Announcing the Inquiry Productivity Commission Chairman Peter Harris said; “The significant evolution in data collection and analysis seen in recent times suggests that the culture, standards and policy structures that have applied to what is commonly called big data analytics may need to move out of the back room and into the showroom if community confidence and wide opportunity for innovation are to be maximised.”

Federal and State Governments have taken steps to open the data kimono, and make access to public data sets more widely available. The Federal Government’s Data.gov.au for example features 7,900 discoverable data sets, 4,000 API enabled resources, and 2,400 openly licensed datasets that can be used to create new classes of data rich products and services.

The rationale for making public sector data available to the private sector, according to Angus Taylor, assistant minister for cities and digital transformation is that; “Government itself is typically not in the best position to create the applications that put pressure on public service providers. By releasing non-sensitive data to the public domain, and allowing the private sector to use that data for customer focused applications, we encourage private sector innovation alongside customer or citizen empowerment.”

Private companies may be willing to exploit Government data, but they have proven less willing to share their data - until prodded.

Late last year the Australian Competition and Consumer Commission announced that it had resolved Federal Court proceedings with Informed Sources, BP, Caltex, Woolworths and 7-Eleven regarding the sharing of petrol pricing information. To resolve the dispute the parties agreed to make the same information available for free to consumers and on “reasonable commercial terms” to third parties.

Woolworths is keenly aware of the value of data; it’s why it uses the Informed Sources information, runs a consumer loyalty programme and also explains why it paid $20 million for a 50 per cent stake in data analytics business Quantium, which also sells data insights to third parties.

The issue for companies and governments leveraging growing data stores is that; “With great power comes great responsibility” according to Ian Oppermann, CEO and Chief Data Scientist at the NSW Data Analytics Centre.

He welcomed the Inquiry noting that: “The digital services economy is driven by data. It is not land or labour or capital that drives productivity in this economy but software platforms driven by data.”
But he acknowledged the risk of “catastrophic” impacts where data was abused or repurposed without due care.

Dr Oppermann said it was important that legislated or regulatory frameworks be established that instill trust around data use.

Quantium’s success, he said, proved that there was “absolutely competitive advantage to know about your customers and non-customers.” The company he said had a well-constructed governance model and delivered only anonymised data aggregates to customers.

But he acknowledged that if organisations chose to provide information of a higher granularity it would have a greater value, and that at present decisions about whether or not to do that were largely based on commercial issues. The Inquiry, he said, could help establish more uniform data sharing frameworks.

“The inquiry shines the spotlight on this and will surface all the difficult issues,” said Dr Oppermann.

Internationally a number of the difficult issues are already surfacing. In March German competition authority, the Bundeskartellamt, initiated proceedings against Facebook for a possible abuse of its dominant social network position, while the European Commission appears to be planning to use competition legislation to keep companies’ use and abuse of data in check.

Certainly the amount of personal data in private company hands continues to soar.

The NSW Government’s plans announced this morning, to trial from next year the use of tap and go credit or debit cards in place of an Opal card would place into private hands (the issuing banks, MasterCard and Visa) data about the public transport movements of citizens and visitors. At present it is possible to use an unregistered Opal card so that no one can keep track of movements on public transport; that would no longer be possible with a credit or debit card scheme.

MasterCard is already a major user of big data – in 2014 it signed a two year deal with Facebook that provided it with consumer insights that it could use in its “Priceless Engine” that allows corporates to send targeted offers to consumers to drive online sales. It has today welcomed the NSW transport trial, saying it boosts consumer convenience.

It also boosts its data banks.

The Productivity Commission’s Inquiry will however consider private sector data banks and according to the issues paper; “Examine the benefits and costs of options for increasing availability of private sector data for other private sector firms, the public sector, the research sector, academics and the community.” It will also consider individuals’ right of access to their personal data.

Whether private enterprise can be prodded to share more of its data insights remains to be seen.

Kate Carruthers, head of business analytics and data governance at the University of NSW, said that the opportunities for governments and business to leverage data to provide better, more effective and efficient services were immense. “It’s the new oil.”

However Ms Carruthers acknowledged the need for proper guard rails about how data was used. She said that adherence to the Australian privacy principles was a good starting point, but said that the Inquiry by the Productivity Commission was “absolutely the right thing to do.”

She said that checks and balances needed to be implemented so that Australia did not go down the US route where credit rating companies sold services to would-be employers, allowing them to turn down job candidates who did not have a sufficiently positive credit rating.

Submissions to the Productivity Commission Inquiry are sought by 29 July. A draft report will be released later this year, with the final version slated for March 2017.

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