Technology
Consumer data rights
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Overview

The consumer data right (CDR) regime aims to give more control to customers over data held about them. It will start a new era of 'open banking' and reflects that Australia values a data economy and sees that as a way to enhance competition and innovation in banking, energy and telecommunications, as it will make it easier for consumers to change suppliers.

Consumers will be able to direct their current supplier to provide their data to other suppliers or comparison services. However, there will also be more privacy and data sharing obligations and additional penalties for breaches of the new laws.

Open banking

The Australian government passed legislation on 1 August 2019 to provide new rights for consumers and small businesses in relation to their data from July 2019. The Treasury Laws Amendment (Consumer Data Right) Act 2019 (CDR Act) provides a new 'consumer data right' (CDR) that will have a major impact on the banking sector. The CDR relating to banking data is usually referred to as 'open banking'.

The legislation will have a major impact on the banking sector immediately, and the energy and telecommunications sectors will also soon be within the scope of the new laws. And it will have broad extra territorial reach as it will apply to CDR data generated or collectedboth in and outside Australia.

The text of the actual legislation passed differs from the draft legislation released in 2018 and also differs from the text of the enacting Bill, which had been first introduced into Parliament in early 2019; that draft legislation lapsed due to the Federal election in May 2019.

The regime will give customers more control and choice over data held about them. The government considers that this will promote competition and innovation in the affected sectors as customers will be able to change their suppliers more easily if they can direct their current supplier to provide their data to other suppliers or comparison services.

The CDR regime will impose significant additional privacy and data sharing obligations and penalties for breach. The geographic scope of the proposed law is broad as it will apply to CDR data generated or collected both in Australia and outside Australia.

In this paper, Robyn Chatwood and Ben Allen, who lead the Dentons Australian privacy law practice, explain.

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