There wasn’t much of a fanfare last month when the Competition & Markets Authority (CMA), the UK’s competition and consumer protection watchdog, launched a “call for information” into the commercial use of consumer data. To be fair, at first sight this may not appear the most exciting of fact-finding exercises.
However, it potentially touches us all because it concerns the way businesses use the vast amount of data they collect about us every day, through devices ranging from smart meters in our homes to supermarket points cards. How that information is used could have serious implications for us as individuals, for society and for the competitiveness of smaller businesses that don’t have the technological wherewithal to analyse the huge amount of data that could give rivals a competitive advantage.
The CMA is looking to increase its knowledge and understanding about the use of consumer data in the UK economy – particularly: how consumer data may be used to generate benefits for consumers how consumer data is collected and how much consumers actually understand about what their data might be used for when it’s collected how businesses generate value from consumer data, particularly by amalgamating it with other data and selling it the problems consumers might experience, especially where a lack of understanding means they can’t effectively control what data is used for.
The CMA’s interest in consumer data is motivated by two separate but related drivers – protecting consumers and assessing whether and how the collection and use of consumer data impacts on competition between businesses.
Although the call for information does not use the term, clearly the CMA is looking at “Big Data” – a term coined to describe the use of technology to generate and aggregate large data sets from multiple sources, including internet transactions, mobile payments, e-mail, registration data, social media, and location data and the increasingly diverse range of sensors and devices connected to the internet, such as smart meters.
Big Data is created by bringing information together from various sources to create a (more) complete picture, which can be analysed by powerful software analytics tools to generate predictive data on market trends, behaviours and outcomes. Not all Big Data concerns consumers, of course. Big Data techniques are also being employed in areas such as weather modelling.
However, there is huge potential and commercial value in consumer data and those involved in “Big Data” extoll its virtues in helping to encourage commercial activity and the benefits it brings – both to consumers and wider society.
For example, data analytics techniques can be applied to consumer data to better target advertising and offers to individuals, meaning they only receive marketing material of real interest to them. The wider market for Big Data is expected to be worth approximately $17 billion by the end of this year; it is here to stay.
As the importance of Big Data grows, there is clearly a danger that it will become harder for smaller businesses and new market entrants to compete with larger businesses with access to lots of data, and that is one of the CMA’s potential concerns. In term of protecting consumers, the CMA’s focus on the awareness of consumers (or, rather the lack of it) as to how their data might be used ties in with a wider debate ongoing in Europe about the shape of new data protection laws which will sweep away the current 1995 European data protection directive and the national laws that implement it. This debate is focused on privacy and how technological developments such as “Big Data” can be reconciled with the privacy interests of individuals in areas such as transparency, fairness and control over their data. New laws are likely to raise the bar in key areas such as the requirement for consent and the right for individuals to require their data be erased under a “right to be forgotten”.
How far privacy and competition regulators go in controlling Big Data activities relating to consumer information will be a matter of policy. Ultimately though, it is up to us as individuals to make sure we understand how our data is being used and to exercise the controls that are given to us (assuming we care). In that regard, it’ll be interesting to see what responses the CMA receives deadline on 6 March.
• Grant Campbell is head of the commercial services division at Brodies LLP