The Turnbull government has committed $65 million over four years to reform the national data system. A cornerstone of those reforms will be the introduction of a Consumer Data Right.
The proposed Consumer Data Right will give consumers in Australia greater control of their data, such as transaction, usage and product data, and allow them to share that data with trusted businesses in order to get the best deals on services and products. The right will be implemented on a sector-by-sector basis, starting with the banking sector in July 2019.
Background
On 31 March 2017, the Productivity Commission Inquiry Report on Data Availability and Use was tabled to Federal Parliament. The report recommended the introduction of a 'comprehensive right' for consumers to access and control their own consumer data. The Australian Government's response to the Report was to implement data reforms across the nation, including by introducing a Consumer Data Right.
The right aims to give consumers better access to the data that businesses hold about their use of products and services, and enable them to make that data available to accredited third parties to assist them to find the best deals for their personal needs. The Government expects this greater availability of data to improve competition between service providers.
On 20 July 2017, the Hon. Scott Morrison MP commissioned the Review into Open Banking in Australia and subsequently, in November 2017, the Government announced its plans to legislate the Consumer Data Right, starting with implementation in the banking sector.
The Government has now agreed on the framework for the Consumer Data Right and its application to Open Banking. It was announced in May this year that implementation is set to take place from July 2019.
The proposed system
The Consumer Data Right will initially be implemented in the banking sector (starting with the big four banks). The Australian Competition and Consumer Commission (ACCC) will then be responsible for conducting sectoral assessments to determine further sectors of the economy that should be subject to the Consumer Data Right. The ACCC, with the assistance of the Office of the Australian Information Commissioner (OAIC), will make recommendations to the Treasurer regarding sectors and classes of consumer data that should become part of the Consumer Data Right.
The Consumer Data Right will be available to both individuals and business customers of all sizes and is intended to:
- improve consumer choices by allowing data to be shared between accredited recipients;
- give consumers the ability to better negotiate deals with their current providers or switch to products better suited to their needs;
- allow better value for money;
- encourage competition and innovation within the participating sectors; and
- improve the flow of data and information.
Once implemented, the Consumer Data Right framework will be regulated by:
- the ACCC – as the lead regulator, promoting the competition and consumer focussed outcomes of the Consumer Data Right;
- the OAIC – providing support to the ACCC, with a focus on privacy protections; and
- a new Data Standards Body which will be established to develop applicable technical data standards.
Breaches of the Consumer Data Right
Complaints by consumers and small to medium businesses (with under $3 million annual turnover) regarding breaches of the Consumer Data Right can, initially, be made to the OAIC. Complaints may then be redirected to other agencies or dispute resolution bodies, including the Australian Financial Complaints Authority. Large businesses will not have access to these complaints avenues.
The ACCC has been given the responsibility of developing rules for further dispute resolution arrangements.
How the right will apply in different sectors
Banking
The Consumer Data Right will first be implemented in the banking sector, through Open Banking. The Open Banking Review recommended the datasets that should be subject to the Consumer Data Right. These include a list of deposit products and lending products, along with machine-readable copies of the products' terms.
Consumers will have the right to request that their data be transferred to nominated third parties, at no cost to the consumer.
These changes will start to take effect from 1 July 2019, with the big four banks required to make data on credit and debit card, deposit and transaction accounts available from that date.
From 1 February 2020, data on mortgages will be made available and, by 1 July 2020, all other consumer data on products recommended by the Open Banking Review will be available.
Banks other than the big four will have an additional 12 months to implement Open Banking for each product type.
Looking beyond implementation in the banking sector, Treasury has flagged that the right will also be implemented in the energy and telecommunications sectors.
Energy
A consultation process, initiated by the Council of Australian Governments Energy Council, is currently taking place to determine which energy-related data sets should be made subject to the Consumer Data Right.
Telecommunications
An analysis of which data sets to be made available is yet to occur.
