On 24 January 2022, the federal government announced an expansion of the Consumer Data Right to the telecommunications sector.

The Consumer Data Right allows consumers to control the use of their data by trusted third parties. The Consumer Data Right was introduced in the banking sector in July 2020. This decision now expands the Consumer Data Right to the telecommunications sector, allowing consumers to access more accurate information about their own internet consumption, phone usage and product plans.

Context

In November 2017, the Australian Government announced the introduction of the Consumer Data Right (CDR), with application initially in the banking, energy and telecommunications sectors. In May 2021, the Prime Minister, the Treasurer, and the Minister for Superannuation, Financial Services and the Digital Economy announced that Treasury would conduct a sectoral assessment to consider whether to extend the CDR to the telecommunications sector. Expanding the application of the CDR is a key initiative in the government’s Digital Economy Strategy, announced in the 2021-22 Budget.

Designating a sector is a threshold decision for applying the CDR to data within a sector. Designation involves specifying classes of information (data) as well as the data holders that could ultimately be required to share CDR data under the CDR rules. The sectoral assessment process is a necessary precursor to the Minister deciding whether to designate a sector, and in what form. Following the government’s announcement in May 2021, Treasury has consulted on a telecommunications designation. As part of our assessment, we invited submissions on a consultation paper, conducted bilateral meetings and held stakeholder roundtables. We also undertook a targeted round of stakeholder consultation to assess regulatory cost impact, assisted by Grant Thornton. Drawing on this input, we evaluated the impact of designating the sector by reference to a range of factors including consumer benefit, public benefit and regulatory impact.

There are a range of benefits to consumers – both individual and business users – and the public interest from designation. The CDR enables Accredited Data Recipients (ADRs) to provide information and services to individuals and businesses. ADRs could use information provided by the CDR to find the most suitable product for consumers in a timely manner, better monitor usage, and facilitate engagement in the telecommunications market, thereby improving market efficiency. This may be of particular benefit to small business consumers, who often lack time to engage meaningfully in the market, and vulnerable consumers, who may face barriers to such engagement. As the third CDR sector, designating the telecommunications sector will also promote cross-sectoral innovation and access to the digital economy.

Balancing this, stakeholders raised issues regarding the potential regulatory impacts and noted the scope of the designation was important for assessing such impacts. Support for designation from existing data holders was in many cases contingent on minimising the costs of any new obligations to hold or store data, and that any implementation of the CDR has regard to the overall infrastructure build that would be necessary to support data sharing.

Treasury’s recommendation is that the telecommunications sector be designated for the CDR. This recommendation is made after consideration of the range of statutory factors required to be assessed in a sectoral assessment and the feedback received during consultation.