Updated data protection regime will catalyse Scotland’s digital economy - Chris Combemale comment

The UK Government’s recent proposals for an updated data protection regime, with greater clarity over legitimate interests, will benefit Scotland’s business community and digital economy

Attracting and retaining customers are essential business activities that drive growth in every company and throughout the economy as a whole. Data-driven marketing and customer engagement are both crucial to businesses when developing relationships with customers.

Marketing is essentially a value exchange between businesses looking to prosper and customers looking to benefit from their services. It is most effective when it is underpinned by consumer trust. The DMA (Data & Marketing Association) Code, to which our members must adhere, explains the importance of building consumer trust through responsible marketing practices and transparency.

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Data and trust exist in tandem with one another. Trust encourages data-sharing, and meaningful data usage builds trust. Customers must know that their data is being used to provide them with an enhanced experience. But in order to build trust and drive growth, businesses and the wider data and marketing industry must find a better balance between innovation and privacy.

'Data and trust exist in tandem with one another,' says DMA CEO Chris Combemale. Picture: contributed.

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One of the UK Government’s top priorities is to unlock the global power of data. As set out in the National Data Strategy, data is one of the most valuable assets available to businesses – and its responsible use should be seen as a huge opportunity to embrace.

In a post-Brexit world, the UK Government is determined to develop data relations beyond the EU, and use data as a key driver for economic growth. Therefore, it is reshaping its approach to data regulation to maximise opportunities with a desire to drive economic growth and innovation across Scotland and the UK.

To receive industry feedback about how this new approach could materialise, the government recently published the “Data: a new direction” report with a range of proposals. Since then, the DMA, alongside business leaders, trade bodies and other key stakeholders, have been in consultation with the Department for Culture, Media and Sport to discuss these suggestions and their potential impact.

At the DMA we have focused our attention on the proposals that will have a direct impact on building successful customer relationships. Both in terms of greater certainty around customer acquisition and retention, and safeguards for customers to ensure trust is earned and maintained over time.

Greater clarity on how to lawfully process data

A key area of interest to our industry, which is also crucial for promoting growth across Scotland’s digital economy, is legitimate interest – one of six lawful bases for processing personal data under the GDPR.

One of the government’s proposed amendments to UK GDPR is to provide greater clarity around where legitimate interests might be an appropriate lawful ground for data processing. It also suggests creating a much-needed reference list of defined uses of legitimate interests to prevent confusion about its lawful application.

This should help companies and lawyers to understand when it is best to use this basis, as many have lacked certainty in the past which has led to overuse of consent – which has subsequently stifled business growth, especially for many small and medium-sized enterprises.

Legitimate interest is currently an under-utilised basis, but it is essential to businesses looking to find and retain customers. In order for any business to provide a relevant experience for customers, they must be able to process insights gained from their own first-hand knowledge of customers, as well as additional insights from other sources.

Organisations that communicate the right products and services to customers create a more efficient economy, reduce wasteful spending, and are more valued by their customers – as highlighted by DMA research.

This is why many data protection regimes in other countries specifically recognise the importance of customer relationships. Singapore’s data protection legislation has recently been updated to include business improvement exceptions. It features text that the DMA believes would be suitable to include in the update to UK data protection.

It is because of these reasons that the DMA supports the government’s reforms to help encourage the use of legitimate interests. Crucially, the DMA does not believe that the proposals to clarify the scope of legitimate interests will pose a threat to EU adequacy. Legitimate interest is well established in EU law since the earliest days of data protection legislation. There are also many legal precedents supporting its use for advertising and marketing, including European Court of Justice rulings.

Enhancing the UK’s data protection regime

The government’s aim is to develop a data protection regime that will provide the flexibility to help organisations deliver better outcomes for customers in more efficient and innovative ways. The DMA strongly supports the government’s proposed approach of maintaining the key principles of GDPR while clarifying areas of confusion and simplifying onerous administrative burdens on businesses.

The government proposals appear to be sensible and pragmatic on ways to create greater clarity and certainty for businesses while maintaining a high level of consumer protection.

The DMA has strongly supported the National Data Strategy and will support a data protection regime that creates successful outcomes for people, business, government and society more broadly. But we cannot risk damaging our adequacy status with the EU.

By maintaining the core framework of UK GDPR, with improvements, the DMA believes that the UK can become a global leader in data-driven innovation – inspiring other nations to adopt the UK’s high standards of privacy protection that prioritise building consumer trust in the modern digital economy.

Chris Combemale, CEO of the DMA

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