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Data | Digital economy

Australian data, privacy laws out of date

Privacy is not a new issue, but I think it is fair to say with digital platforms it has been completely turbo-charged, ACCC Chairman Rod Sims has told CEDA at an event in Perth.

"With digital platform issues we are at the start of a journey. We’ve got platforms but we don’t have the rules and we do need to have the rules,” he said.

“Privacy is one of those subjective things.

“It is an emotive topic, but I think it’s clear that consumers don’t understand what’s going on and partly that’s because the privacy policies are actually ‘permission to use’ policies.

“The policies themselves are very long, very complex, very vague and very difficult to navigate.

“Who is protecting your data? The answer has to be largely no one.

“I think a big issue is that consumers just clearly do not understand the amount of data that is collected and the use to which that is put.

“We did a survey and it showed that people are sort of aware that Google and Facebook are collecting data because they know they are getting ads that can only be based on their use of the platform.

“But when we asked people ‘are you comfortable to be tracked by Google and Facebook when you move off the platform and roam to other platforms’ about 80 per cent said no, and when we asked ‘would you mind being profiled in the way you’re being profiled’ most people said no – 80 per cent again.

“When we showed people… ‘this is what is going on, do you mind’ 80 per cent generally said yes, they mind a lot.”

Mr Sims highlighted some of the 23 recommendations made by the ACCC as part of the Digital Platforms Inquiry, released in July 2019.

“We’re recommending the privacy laws are changed. Both in Australia and the US, the model is basically give you information and let you make a choice,” he said.

“It’s completely not working anymore. You are not informed about what’s going on and even if you were, you’ve got no choice because your choice is getting off Google or Facebook and not many people want to do that.

“We need to modernise our privacy laws, we need proper consent…we need new definitions of what is personal data, we need an ability to erase data and we need to require the digital platforms to just tell us very clearly what data is being collected and what’s being done with it.

“That is fundamental.

“That will be more information than people need… but if it’s there then journalists, privacy advocates can understand that and make that known, otherwise we just don’t know, and we should know.

“If you try to understand how digital platforms work, it is really about getting your data and monetising it. That’s their complete business model.

“Facebook and Google have a huge incentive to grow their profits, because their share price is more than 50 per cent explained by growth meaning. If their profit level stayed at the current level, their share price would more than half.

“They have an incentive to engage in anti-competitive activities. That doesn’t mean they are, but they certainly have got the ability to engage in them because of their universal reach.

“They clearly have substantial market power in Australia. They use that market power to get more and more data, so their data collection comes not just from when you’re on the website.

“Most websites have Google or Facebook trackers, many have both, so just about wherever you are, there is data going back to (them) and it often goes back before you have even agreed on the platform – bam, the data is gone.

“They also get a lot of data because they dominate advertising technology, they dominate data analytics, so they’re getting data from a whole range of ways.

“They never describe it that way, but that’s the business they’re in.

“There’s a close link here between the competition, consumer and privacy issues, because when you use these services, you’re paying with your data. They are free of course but you’re paying with your data.

“There is just no economic way to analyse what’s going on here.

“Because the payment you’re making is so unclear to you, it’s hard to get competition in terms of the way you pay.

“Then you look at what are the harms here from having all this data and that’s really interesting.

“There is accessibility to be able to exploit biases and again we don’t understand fully the extent to which this is going on and certainly I don’t think Google or Facebook take much responsibility for it.”

Mr Sims also discussed consumer surplus.
 

“The more they know you and can profile you, the more they can work out what you would actually pay. That ability to target people…is another interesting aspect,” he said.

“Then you’ve got the use of data in terms of Cambridge Analytica. I understand that is getting out of our remit at the ACCC but the ability to profile people for political purposes with information, scams and the like is also there.

“The other issue we hit on of course very strongly because it was a key part of our terms of reference, is the impact of all of this on the media.

“We care because Google and Facebook are not providing the news, they are just grabbing it from everyone else and supplying to you – which is great, it has many advantages – but it means they are…massively reducing the ability of the media companies to monetise their content.

“Why we care about that is media is what is known in economics as a public good – the benefit from the media being there, even if we don’t buy the newspaper or subscribe online, because the media hold people to account – be it government, or the ACCC.

“That does provide a good service, having an informed democracy.”

Mr Sims said the Government has committed to responding to the Digital Platforms Inquiry report by Christmas.