09/20/2024 | News release | Archived content
Consumer data portability rights are catching on. See, for example, the developments reported on about the Consumer and Product Data Bill moving to open banking in New Zealand, Canada's year of rights to data portability and the European efforts to create a single market for data.
Australia has its own - the Consumer Data Right (CDR) - which allows consumers to safely share the data that businesses hold about them.
Part IVD of the federal Competition and Consumer Act 2010 (Cth) establishes the Consumer Data Right and provides the Australian Competition and Consumer Commission (ACCC) with functions and powers for the Consumer Data Right and regulatory oversight over rules which detail how the Consumer Data Right works and is implemented.
The aim of the Australian CDR regime is to help consumers compare products and services to find offers that best match their needs. When CDR laws were first passed in Australia, the banking and energy sectors were the first to be regulated by them - with the laws requiring consumer data to be readily and easily available for the consumer to share from one service provider to another. The aim, in giving consumers the power to share their data, was to encourage innovation in new products and services.
Thus, Australia embarked on an era of open banking and open energy - with open telecommunications and open insurance expected to follow.
Live sharing of consumer data began with the banking sector on 1 July 2020. All Australian banks are required to participate in the Consumer Data Right.
Consumer data sharing in the energy sector began on 15 November 2022. Energy retailers that operate through the National Electricity Market (NEM) and have more than 10,000 customers are required to participate in the Consumer Data Right.
On 29 September 2022, the Assistant Treasurer, the Hon Stephen Jones MP, released a report which was the product of the independent Statutory Review of the Consumer Data Right by Ms Elizabeth Kelly PSM (Review Report). The Review Report recommended a greater focus on CDR system maturity, functionality and data quality.
Consequently, the Federal Government announced in its Statement in Response to the Review Report in June 2023 that it would pause the implementation of the CDR across certain sectors, being:
"to allow time for the CDR to mature across the banking and energy sectors and to implement lessons learned to date".
The Federal Government said it would make a "strategic assessment" towards the end of 2024 to "inform future expansions and the implementation of action initiation" - that is, allowing an action to be performed on your consented-behalf - sometimes described as "write access".
While it is unclear what this will entail, it is unlikely that the CDR will be expanded into the superannuation, insurance and telecommunications sectors within the timeframe originally anticipated.
The proposed CDR launch for non-bank lenders and Buy Now Pay Later products was pushed back until 2025 or 2026.
This pause on the CDR has not affected the energy sector, in which the CDR was gradually rolled out from 2022 onwards for energy retailers.
In 2023, the Australian Treasury commissioned an independent review into compliance costs associated with implementing the CDR framework from Heidi Richards, former Australian Prudential Regulation Authority (APRA) senior executive, and the resulting report was released in December 2023 (Richards Report).The Australian Federal Government's response to the Richards Report was released on 9 August 2024 and noted that the costs of the CDR have far exceeded original regulatory estimates, and that they may be contributing to slow adoption of CDR-enabled products and services in Australia.
The Richards Report was released on the same day that Australia's Assistant Treasurer, the Hon. Stephen Jones MP, addressed the Committee for Economic Development of Australia, announcing a "reset" of the CDR.
As part of the reset, draft amendments to the CDR were released with a formal consultation process announced, entitled as the "consent and operational enhancement amendments consultation". The consultation period concluded on 9 September 2024.
The draft amendments to the CDR focus on the following objectives:
The Treasury will now consider the submissions made in respect of the consultation and Mr Jones will now decide whether to make any of the proposed changes. The timeframe for this is unclear.
In addition to the proposed CDR reset discussed above, there have been a number of other recent developments in relation to the CDR:
A focus on the costs and benefits of consumer data portability rights will be welcomed by many sectors - who will be mindful of the need to ensure the CDR regime is able to deliver the benefits for consumers.
The financial services, energy and telecommunications sectors will need to keep a watching brief on developments - especially in light of the Australia's government's broader digital infrastructure agenda.
Please contact Robyn Chatwood, Matthew Hennessy, Michael Park, Antonia Hudson, Jamie Griffin or your usual technology or competition law contact within Dentons if you would like to keep up to date or discuss these developments.