Consumers’ data in loyalty schemes exploited, ACCC says

The competition watchdog has piled pressure onto the government to adopt consumer data protection reforms.

The ACCC has raised concerns about loyalty schemes’ data collection and sharing.

The competition watchdog has piled pressure on the government to adopt consumer data protection reforms floated by its digital platforms inquiry, which are at risk of being watered down following lobbying by tech giants.

The Australian Competition & Consumer Commission used the release of its final report on loyalty schemes to raise concerns about data collection and sharing, and call on the government to adopt recommendations from its digital platform inquiry, which has been put on the backburner by Canberra.

The watchdog said its proposed reforms, which included ending the practice by Coles, Flybuys and Woolworths Group to automatically link members’ credit cards to their profile, were made to “both protect consumers and ensure consumer trust in the digital economy and data-based innovation”.

“Many consumers are increasingly concerned about targeted advertising, in some cases from companies they have never dealt with,’’ ACCC chairman Rod Sims said.

“Many consumers would be shocked to find that some supermarket schemes continue to collect their customers’ data at the checkout even when they do not present their loyalty cards. They do this by tracking customers’ credit or debit cards from previous transactions.”

He said consumers might even be charged inflated prices based on their frequent-flyer data or online search history and that many loyalty schemes had “very vague” privacy policies that sought broad consent and discretion about their use of consumer data.

The Australian on Tuesday reported that digital giants Facebook, Google and Twitter had unleashed a last-ditch round of political lobbying in Canberra, in a bid to pressure the government into rolling back its response to the digital platforms inquiry.

The government was expected to delay its response to the ACCC’s inquiry until next year, despite receiving the report almost six months ago.

In its lengthy report into consumer loyalty schemes, released on Tuesday, the ACCC said the findings “reinforced” those of its digital platforms inquiry. In particular, the ACCC highlighted its proposal to ban unfair contract terms and unfair trading practices and for an overhaul of privacy laws.

“The ACCC’s concerns identified in this report have direct parallels with those identified in the ACCC’s digital platforms inquiry final report,” the regulator said.

“The ACCC is of the view that the findings from this review of loyalty schemes reinforces the ACCC’s findings from its Digital Platforms Inquiry, and further supports our recommendations for economy-wide changes in relation to privacy law.”