Personal data and Consumer Protection – A CMA Perspective A CMA Perspective Jason Freeman Director of Consumer Law, Competition and Markets Authority 1
E-Commerce & the Economy CMA’s Mission: to make markets work well in the interests of consumers, businesses and the economy Online and Mobile Commerce can deliver: • Huge benefits for consumers • New opportunities for businesses • Growth and innovation in the economy But this requires: • Strong consumer confidence • Fair dealing by businesses 2
Internet = Information economy A place where: Traders and Traders can Consumers can consumers can access new access new find out about markets products each other! Information is the main currency of the internet –so this requires a market approach 3
The data market Consumer Consumer spending Consumer habits Consumer habits interests interests • At what point are they • The next area of value • What they search for, willing to pay? to be unlocked write about, look at, • Inferred from general purchase • Midata, data lockers, consumer behaviour personalised products • Valuable for • Targeted discounts – advertisers, but also • Requires significant but also personalised retailers… trust… prices? • Who has this data…? • A risk area for trust… 4
How can technology be used to personalise prices? 5
Common information based price discrimination Location of consumer • market factors in a particular region or higher willingness to pay Route to a product • arrive via a discount website or use a mobile device Search discrimination • presented with different search results based on conduct or characteristics Targeted discounting • vouchers or discounts are given based on previous shopping habits 6
What information is collected? Collected (e.g. Observed Volunteered by cookies) Product Device Address for delivery Route into website Operating system Email address Other sites visited IP address location Phone number Browsing and Past purchases Date of Birth purchasing from the trader Responses to behaviour Existing customer customer surveys Speed of click through 7
Building trust to unlock value Personalised Pricing Call for Information (OFT 1489) • Many people believe personalised price hikes happen • People are suspicious of data collection (US data brokers refused to answer our questions!) • Traders in fact collect huge amounts of data about consumers and • Traders in fact collect huge amounts of data about consumers and want to segment market more finely to price discriminate • Dynamic pricing is common –and can be mistaken for personalisation Main conclusions: • Firms need to be much more transparent and fair about data collection and use to build consumer trust • Without transparency also significant risk that personalisation will be harmful –and so warrant intervention 8
Ensuring consumer trust Using collected Collection of Use of information information to information – post collection influence the final price Behave fairly Tell people if Tell people if Transparency Transparency information Use for stated on collection used to set purpose and use price Use responsibly Transparency Do not mislead on transfer to Genuine opt- about third parties out discounts, best Genuine opt- price or RRP out 9
Collection of information DPA CPRs “Fair and lawful" “Fair and lawful" Lack of transparency on - Specify purpose for collection, use and collection transfer – misleading action/omission - Consent or legitimate reason to collect Lack of genuine opt-out – possible aggressive - Only collect what is practice? necessary 10
Use of information – post collection DPA CPRs “Fair and lawful" Irresponsible acquisition, - Don’t use for unspecified use or transfer – contrary purposes (without a to requirements of legitimate reason) professional diligence - Accurate and up to date Lack of genuine opt-out – (where appropriate) possible aggressive practice? - Appropriate security 11
Using collected information to influence the final price DPA CPRs Don’t tell consumers if “Fair and lawful" information is used to set price – misleading - Don’t use information omission to set price unless told consumers or got Mislead about consent discounts, best price or RRP – misleading action 12
Personal data and Consumer Protection – A CMA Perspective A CMA Perspective Jason Freeman 13
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