Virgin Australia warns against sharing customer data

The head of Virgin Australia’s Frequent Flyer business yesterday warned against investing in data mining.

Karl Schuster says data mining is risky. Picture: James Croucher

The head of Virgin Australia’s frequent-flyer business yesterday warned against investing in companies that mine and monetise customer data, saying it is “risky” and could jeopardise customer trust.

Chief executive Karl Schuster said he had been approached by companies seeking to mine the buying behaviours of his six million members but he had knocked them back out of concern over the ethics of sharing data and a lack of legislation governing it.

“We’ve been approached by many companies about data sharing and our position is that we believe that data privacy legislation is maturing in Australia and will continue to mature. So until we’ve got a really solid position we are going to take a very conservative position because we don’t want to breach our members’ trust by sharing their data and monetising that data,” Mr Schuster told The Australian.

“That is important to our partners, whether they be big banks or big mobile phone companies or big petrol retailers, and I don’t want them for a millisecond to believe that I will take the insights that their customers give us and exploit them out in a data-sharing model.”

Mr Schuster’s warning came as Qantas, National Australia Bank and Westpac yesterday revealed they had collectively invested $10.5 million in emerging data exchange Data Republic, which is looking to expand the use of customer information held by government and business.

The company, based in Sydney’s Stone and Chalk tech­nology innovation hub, had developed a platform for the ­secure exchange of data that companies could use to create new services and offerings to customers, as well as solving socio-economic problems.

Mr Schuster said data-sharing models like Data Republic’s were “risky” for the companies electing to share their customer data.

“When you’ve got the guy who runs Data Republic saying things like ‘we know there’s a lot of risk in data sharing’ that just shows there is risk everywhere,” he said.