Byte-sized insights: ACCC releases its eighth DPSI Report on data

On 21 May 2024, the ACCC released its Interim Report No. 8 in the Digital Platform Services Inquiry in relation to competition and consumer issues in the supply of data products and services by data firms in Australia.

The Report examines the significant role and use of data and its important implications for consumer protection and competition, privacy, data protection and broader issues such as national security. The Report gives a snapshot of some data products and services, with a view to providing greater clarity on how products and services in this dynamic industry are now being supplied.

It also recognises that the collection and use of data is not limited to the digital economy and is also core to the offline economy. Data plays an important role in the retail, property, financial services, infrastructure, grocery, and insurance industries, and in key government and business functions such as confirming identity and preventing fraud.

Our observations on some of the key issues of interest cited in the Report are set out below.

A privacy role for the ACCC?

The ACCC continues to strongly support the implementation of privacy measures to better empower consumers, protect their data and support the digital economy. It considers that the privacy-related issues raised in the report are best addressed in the first instance through strengthened privacy laws, supported by the allocation of further resources to the Office of the Australian Information Commissioner (OAIC).

That said, the ACCC found that practices that give rise to potential consumer harms go beyond issues covered by privacy laws (even if strengthened), commenting that certain issues around data use and misuse may be covered by existing provisions of the Australian Consumer Law (ACL). The ACCC also continues to support the introduction of an unfair trading practices prohibition to enhance protections for consumers and small businesses.

Potential for consumer harm

The Report highlights the potential for harm given consumers' lack of understanding of how their data is used. The ACCC raised concerns that many consumers are not aware that a range of data firms collect their data from a variety of sources or how this data may be used. The Report queries whether consumers can in practice understand and knowingly consent to, or control, how their data is collected and used. While most Australians are uncomfortable with the idea of their personal information being shared or sold, most don't read privacy policies before providing personal information.

Data and ACL issues

The report raises some examples of practices by data firms that might raise ACL concerns.

For example, firms collecting and using data may be liable for misleading and deceptive conduct where they make a potentially false or misleading statement in its privacy policy about how it uses consumer data or who it shares consumer data with.

There may also be an unfair contract term risk in data firms’ standard-form contracts that govern what data may be collected from consumers and how data firms may use it (including sharing with third parties).

Tensions between data privacy and competition

The report gives some insight into how the ACCC considers competition issues and data, including:

• practices that seek to restrict data access between data firms that may have the effect of foreclosing rivals in downstream markets, for example through:
  • the use of exclusivity arrangements to prohibit data suppliers from providing a dataset to a competitor; and
  • the acquisition of, or a joint venture between, firms that have access to first-party proprietary data; and
• tensions between promoting competition in data markets (such as through facilitating data sharing) and promoting improved privacy outcomes for consumers non-price competition between data firms, including product differentiation, privacy and data security, and quality and scope of data and analysis.

ACCC considers data in light of the incoming merger reforms

The report refers to "extensive" mergers and acquisitions involving data firms, noting that these transactions are often used to build up portfolios of data, and may provide the acquirer with the ability to restrict access to important datasets.

The recently announced merger law changes include a new requirement for the ACCC to take into account considerations such as the market position of the businesses concerned and their economic and financial power, including their access to inputs including data.It isn’t clear from the report whether the ACCC has reviewed recent acquisitions by data firms, and if so, whether it would consider them differently now, having regard to its findings in this report.