While the Government is considering what controls it might impose on digital platforms, in response to the Australian Competition and Consumer Commission’s critical review of the sector, there are important takeaways for consumers.
The ACCC review of digital platforms focused on search engines, social media platforms and other digital content aggregators.
It says digital platforms often provide Australian consumers with a large range of services for no upfront cost. But despite this zero upfront price, consumers’ interactions with digital platforms nevertheless provide transactions of significant value. In exchange for many and varied services provided, consumer provide (and effectively pay) digital platforms with their attention, user data and rights to user-uploaded content.
Their attention can be monetised through the supply of advertising services. User data allows advertising services to be segmented and personalised. User data is also an asset that can be sold, licensed or exchanged with third parties.
This is despite the fact that many digital platforms have publicly stated that they do not sell user data.
User data can be actively provided, such as when you put a name and contact details intoan online form. It can be passively collected from Wi-Fi networks, GPS or IP addresses. And it can be inferred from other sources, such as combining actively provided data with date from de-identified data sets.
Ninety per cent of all data that exists in the world was created in the past two years.
Facebook works with data broker Quantium, Acxiom and Experian to combine online and offline date and to generate behavioural insights.
Consumers have different privacy preferences and levels of privacy awareness. All consumers will be better off when they are sufficiently informed and have sufficient control over their user data so they can make informed choices that align with their privacy and data collection preferences.
Several features and consumers’ current relationship with digital platforms prevent consumers from making informed choices. They include bargaining power imbalances. Information asymmetries between digital platforms and consumers, and inherent difficulties for consumers to accurately assess the current and future costs of providing their user data.
An ACCC consumer survey identified three main areas of concern: location tracking, online tracking for targeted advertising purposes and the disclosure of data to third parties.
More than three in four digital platform users surveyed considered the tracking of their online behaviour to be a misuse of their personal information if it used to create profiles or enable targeted advertising.
Ensuring that consumers have effective control over the use of their data within these evolving technologies would be assisted by changes to the Australian privacy framework. In particular, updating the definition of “personal information” in the Privacy Act to clarify that it includes the growing variety of technical data such as IP addresses, device identifiers, location data and other unique identifiers.
Costs of having user data collected may include increased risk of data breach and cybercrime, which may result in financial detriment, lost privacy, increases in unsolicited targeted advertising and reputational injury.
Many digital platforms’ privacy policies are long, complex, vague and difficult to navigate. They also use different descriptions for fundamental concepts such as “personal information”, which is likely to cause significant confusion for consumers.
Clear and effective privacy policies are a critical first step to ensuring that consumers can engage in the digital economy in an informed way, to make decisions that are in their own best interests and ensure effective competition between businesses online.
While a range of different privacy preferences exits, consumers would benefit from being given a choice to opt out of the types of data collection that concern them.