Digital takeovers, transactions may harm consumers

19 November 2019

Takeovers of smaller rivals by digital platforms, including their data sets, may pose a threat to consumers’ choice and privacy, said ACCC Chair Rod Sims.

Mr Sims was speaking at the Consumer Policy Research Centre (CPRC) Conference on the ACCC’s perspectives on consumer welfare in the data economy.

“Few consumers are fully informed of, nor can they effectively control, how their data is going to be used and shared. There are further concerns when the service they sign up to is taken over by another business,” said Mr Sims.

Mr Sims raised these issues in relation to Google’s recently announced proposed acquisition of Fitbit.

“The change in data collection policies, when a company like Fitbit transfers its data to Google, creates a very uncertain world for consumers who shared very personal information about their health to Fitbit under a certain set of privacy terms,” said Mr Sims.

At the time of Google’s acquisition of DoubleClick, DoubleClick reportedly denied that the data it collects through its system for serving ads would be combined with Google’s search data.  Eight years later, Google updated its privacy policy and removed a commitment not to combine Doubleclick data with personally identifiable data held by Google.

When Facebook acquired WhatsApp, Facebook claimed it was unable to establish reliable matching between Facebook users and WhatsApp users’ accounts. Two years later, WhatsApp updated its terms of service and privacy policy, indicating it could link WhatsApp users’ phone numbers with Facebook users’ identities.

“Given the history of digital platforms making statements as to what they intend to do with data and what they actually do down the track, it is a stretch to believe any commitment Google makes in relation Fitbit users’ data will still be in place five years from now.”

“Clearly, personal health data is an increasingly valuable commodity so it is important when consumers sign up to a particular health platform their original privacy choices are respected and their personal data is protected even if that company is sold.”

Research from the ACCC inquiry showed around 80 per cent of users considered digital platforms tracking their online behaviour to create profiles, and also the sharing their personal information with an unknown third party, is a misuse of their information.

Facebook’s recent announcement of its planned offering of a cryptocurrency Libra is also a potential cause for concern, said Mr Sims.

“Here we have an organisation, whose lifeblood is to monetise data, getting into the financial services industry,” said Mr Sims.

“A lack of clear information about how their data will be handled reduces consumers’ ability to make informed choices based on that data.”

“During our DPI we found a lack of consumer protection and effective deterrence of poor data practises have undermined consumer’s ability to choose products.”

“Vague, long and complex data policies contribute to this substantial disconnect between how consumers think their data should be treated and how it is actually treated,” said Mr Sims.

“Transparency and inadequate disclosure issues involving digital platforms and consumer data were a major focus of our Inquiry, and remain one of the ACCC’s top priorities.” 

Release number: 
215/19
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