Denham Sadler
November 27, 2017

Govt moves on open data laws

Policy

Govt moves on open data laws

Angus Taylor: Open data legislation will hit Parliament next year

The government will next year force banking, energy and telco companies to provide digital data to consumers in a scheme that will later include government-funded sectors and agencies.

Legislation to implement the National Consumer Data Right, a key recommendation of a Productivity Commission report on open data earlier this year, will be introduced to Parliament by the federal government next year.

This would require companies to provide consumers with open access to the data it holds on them, and to pass this on to third party companies and comparison platforms to allow those consumers to find a better deal.

Government is expected to announce more reforms focused on data use before the end of the year.

The scheme marks the biggest reform to consumer law in a generation, according to assistant minister for digital transformation Angus Taylor.

“It can bring forward a whole new level to competition policy, contestability and, most importantly, better and more affordable services for consumers,” Mr Taylor told InnovationAus.com.

“We saw a big round of competition reforms in the 90s, and now the opportunity is to leverage the power of customers and to empower customers to drive competition by asking for better deals from services providers. The key to that is digital, and is data.”

The first sector to be forced to hand over the digital data is banking, with government having already flagged this move in this year’s budget. An inquiry is currently open into how this open banking regime would be implemented.

The energy sector is next in line, with the large providers already consulting with the government and agreeing to send out more than a million letters to customers this year explaining how they could save money on bills.

The telcos will also be on the agenda next year, while the public sector will be included at a later date.

The scheme requires companies in the chosen sectors to provide standard, comparable and easy-to-read digital data to consumers or chosen third party providers. This data would include usage patterns, payment preferences, hidden charges and transaction history or phone records.

“By giving consumers and citizens power over the access to their own data, we put them in a position to make choices, to switch more easily than ever before and to get better deals,” Mr Taylor said.

“There are no shortage of comparison websites, but by giving customers access to their own data, those comparisons can be made faster and more effectively with better information,” he said.

While the National Consumer Data Right, the overarching legislative framework for the open data scheme, would be introducing to Parliament next year, with the types of data included to be implemented on a sector-by-sector basis, beginning with banking.

The kind of data that companies will be required to hand over to consumers, and how this will be done, will be different for each sector, Mr Taylor said.

“We’re really conscious of the fact that every sector is different. The overall legislative framework will be brought to Parliament next year, but the application needs to be industry by industry,” he said.

“We would like industry to come forward with plans that we can approve, but ultimately government has to decide whether industry has gotten it right.”

The government has been widely consulting with the banking and electricity sectors across this year, and Mr Taylor said that these companies have accepted that the change is coming.

“They know this is the way the world is going. We want to work with them and make sure it’s a solution that works for their industry.

“We’re confident we will get to good outcomes with the three initial sectors. It’s true that this will create more competition, but it also creates great new opportunities. This will reduce the costs of acquiring customers,” he said.

While the government is first applying the open data scheme to private sector utilities, it will also include government funded industries and agencies at some point in the future.

“We have to apply this to ourselves, whether it’s childcare, aged care or vocational education, enabling better comparisons and more informed choices by consumers is a hugely important issue,” Mr Taylor said.

“That obviously must come hot on the heels of the initial private sector industries.”

“I think there’s potential here to really drive reform in how government-funded services are delivered. There is no shortage of government-funded services where we can get results with this.”

The government will task the ACCC will be overseeing the consumer side of the scheme, while the information commissioner will be focusing on the security and privacy of the data. Concerns have already been raised over the security of the sensitive data involved, with digital rights groups questioning how it will be protected and what safeguards will be in place.

Mr Taylor said the government has put an emphasis on privacy throughout its planning and consultation with the private sector.

“It is imperative that this not only gives customers increased choice and more capacity to switch, but also more security over their data,” Mr Taylor said.

“The ACCC will be focusing on helping customers to switch more easily, but the information commissioner will and should have a very strong focus on the security and privacy aspects of this,” he said.

“It’s not as though the data isn’t already there. The key is if the company is creating an API, that it be secure, that the digital safeguards are secure so there’s no identity fraud.”

The government would also look to introduce an accreditation scheme for third party companies looking to access the data to ensure they have appropriate safety measures in place.

“The customer has to be comfortable with the third party, that’s very important. We are working through how any accreditation of that might work, that is certainly worthy of consideration. It is very, very important that third parties who get involved in using customer data are held to account as much as the originators of the data,” Mr Taylor said.

The National Consumer Data Right would work in conjunction with the government’s digital identity strategy, and would make it as easy as possible for individuals to switch to different companies offering a better deal.

“If you combine what we’re doing [with data] with what we’re doing on digital identity, this is an extraordinary opportunity for FinTechs and equivalent organisations in other sectors.

“The barriers to customer moving to new service providers in the historical data that the incumbent has, the time and energy involved in re-establishing your identity, and any concerns you might have about the security of your data. This initiative is seeking to deal with all of those issues,” Mr Taylor said.

The National Consumer Data Right was a key recommendation from the Productivity Commission’s Data Availability and Use report from earlier this year.

The commission argued that consumers’ control over their own data needed to be improved and for this to be easily transferred to a third party to find a better deal.

Mr Taylor said the government’s announcement is “broadly consistent” with this recommendation, while a formal response to the whole report will be delivered by the end of the year.

The report had a total of 41 recommendations, and Mr Taylor said the government would implement the “vast majority” of these.

“It’s an excellent report and we are very supportive of it, and will be implementing the majority of it,” he said.

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