Understanding the ACCCs report on consumer data practices and data firms

The collection and use of consumer data is a major component of what we do as marketers and as such how businesses promote and sell their products and services. We are all aware of the imminent privacy reforms. However, in a separate move the Australian Competition and Consumer Commission (ACCC) recently released an in-depth report on the consumer data practices and what it terms “data firms”. The 135-page report is extensive and thorough, but also very relevant to the modern marketer. To give you a quick overview we will focus on the report highlights. 

Report context

The ACCC has been conducting a five-year inquiry into the supply of digital platform services known as the Digital Platform Services Inquiry (DPSI). That is, looking into goods and services relating to digital platform services, digital advertising services and providers, and data collection, storage, supply, processing and analysis services and providers. The ACCC publishes a new DPSI report every six months.

On 21 May 2024, the eighth instalment of the DPSI interim report was released and according to ACCC Deputy Chair Catriona Lowe, the report “shines a light on a relatively unknown part of the data ecosystem and examines the data products and services supplied by data firms”. 

Key sections and insights

According to the report, data firms can be defined as firms who collect, store, supply, process or analyse data but who generally do not have a direct relationship with the consumer or individual the data is collected from. Nowadays, most marketing teams would work with one of these firms or providers to deploy their data-driven marketing and advertising needs. The report also highlights the ways in which data is generated by both consumers and businesses and goes on to explain why data firms collect, retain and sell that data. We know as marketers that data collection is fundamental for two primary reasons. The first, to more specifically target prospective customers and retain existing ones. And the second, to provide all customers a more tailored and targeted customer experience. The upcoming privacy reforms will significantly impact what data is collected and how, which will force marketers to rethink where they get their consumer data from. 

Source: DPSI Interim Report 8, March 2024

The third chapter of the report considers data products and services with a section focussed on data-driven marketing and advertising products. The report specifically notes the critically important role that data processing and analysis plays in modern marketing and advertising, including benefits for customers, consumers, businesses and the broader economy. Segmenting audiences has never been easier with the wealth of consumer data businesses (or the data firms they work with). As we know, this is a win-win for marketers and consumers because we can confidently target the audience we intend to, and in turn the customer receives a more tailored experience by being exposed to the products and services that actually interest them. However, this is often a misunderstood part of consumer data by the general public and one that will be greatly impacted by the upcoming amendments to the Privacy Act.  

With the good though also comes the bad and chapter five of the report outlines a range of potential issues related to consumer data collection, storage, supply, processing, analysis and retention by data firms. One key takeaway is that consumers are often unaware or not given a choice about the extent of their data that is collected and subsequently used and shared by data firms and others. The report suggested that long and complex privacy policies, coupled with ambiguous language and “take-it-or-leave-it” phrasing of privacy terms, make it increasingly difficult for consumers to understand, legitimately consent to, and control what happens to their data. In fact, to simply read a typical privacy policy, it would take an average of 29 minutes, with over 46 hours being required to read every privacy policy encountered in an average month.  

The report also raised concerns that consumer data linked to individuals without their knowledge has the potential to result in discriminatory businesses behaviour. For instance, while it would be unethical, consumer data could be used to potentially target and exploit vulnerable groups. There is also a growing concern that consumers may be more easily re-identified as data analytics technology continues to advance.

Overall, the findings show that the ACCC is in strong support of privacy measures to better empower consumers, protect their data and support the digital economy, and is aligned with the Government’s current overhaul of the Privacy Act. With the aim of putting more power back in the hand of the consumer, the key changes to the Privacy Act which correspond with the ACCC’s report findings include:

•    the introduction of a right for an individual to have any of their personal information erased;
•    the expanded definition of personal information, including by changing the word ‘about’ to ‘relates to’ and listing some types of information that may be personal information; and
•    the introduction of a ‘fair and reasonable’ test for the collection, use and disclosure of personal information. 

The ACCC will hand down its final report on the digital services inquiry in 2025.

What does this mean for marketers? 

As the adage goes, forewarned is forearmed – the Regulator has told us what they are focusing on and we need to ensure that as a responsible, professional industry, we comply with the law as it currently stands and prepare to implement the changes to come. Investing in the resources – be that time, people and/or money – to get your data in order, and review and refine your data practices will best set you up for a successful transition when the privacy reforms are legislated.

In terms of legal reform, 2024 is shaping up to be a challenging year, but it doesn’t have to be daunting with careful proactive planning - keep up to date with ADMA’s suite of regulatory courses; curated for industry, by industry.