September Regulatory Update

11 Sep 2019

ADMA pushes back on proposed changes to privacy laws

In its response to the Final Report of Digital Privacy Inquiry, ADMA has argued against changes to Australia’s privacy laws that would make it harder to do business here.

ADMA’s submission presented new evidence that disputes the Report’s conclusion that Australia’s privacy laws are deficient and that legislative amendments are needed. By benchmarking Australian consumer attitudes to privacy and marketing against those of nine other developed economies, the research found that consumers here are much more aware of their privacy rights and much more willing to engage in a value exchange with brands and organisations they trust.

ADMA contends that Australia’s existing principles-based privacy laws – constructed to be media neutral – remain well suited to meet current and future technology-driven changes to marketing. Tinkering to address perceived issues with digital media would be a significant breach of that core principle of neutrality and would invite further changes each time a new technology comes along.

The authors of the Report are wrong to take a snapshot of the data-driven economy in 2019 and draw the conclusion that more law-making is needed to ‘repair’ digital markets. The marketplace is both dynamic and agile; regulators and policy makers should not discount its ability to self-correct in response to the demands of the community.

The Report points to a ‘privacy paradox’ whereby consumers claim to be concerned about privacy but that does not match up to their actual behavior. Tougher privacy restrictions on businesses are mooted as a necessary protection for an unwitting population that does not know how to protect itself.

However, ADMA argues that consumers are nowhere near as vulnerable or naïve as portrayed. This is borne out by recent research that benchmarks Australian consumers against other developed countries in their participation in the data economy. The picture it presents is of a changing digital marketplace in which consumers are taking a greater interest in and control over their data footprint. This is welcomed by businesses that understand the link between transparency and trust. They know that a more informed consumer is much more likely to feel confident engaging with brands in a true value exchange. Details of the research form the centerpiece of ADMA’s submission and will be used to lobby the Federal Government against changes to privacy laws. For more information contact scott.mcclellan@adma.com.au.

 

Concerns about Loyalty Programs the Latest Focus of the ACCC

The ACCC is looking into customer loyalty schemes in Australia with the aim of gaining a better understanding of how they operate; the collection, use and disclosure of consumer data; and their terms and conditions. The draft report flags concerns about a range of business practices. They include loyalty schemes:

  1. that do not present their terms, conditions and privacy policies in a way that consumers can readily understand;
  2. that make unilateral changes to their terms and conditions in a way that may be unfair to consumers;
  3. collecting, using and disclosing consumer data in ways that do not align with consumers’ preferences. This includes loyalty schemes not providing sufficient transparency and meaningful consumer control over the collection, use and disclosure of consumer data, and engaging in the following practices:
    • seeking broad consents from consumers and making vague disclosures to them about the collection, use and disclosure of their data;
    • providing consumers with limited insight and control over the sharing of their data with unknown third parties; and
    • providing only a limited ability for consumers to opt out of targeted advertising delivered by third parties on behalf of loyalty schemes.

The ACCC has placed the industry on notice and called on operators of customer loyalty schemes to review and consider their practices in the context of the Australian Consumer Law, in particular whether consumers are being misled or subject to unfair contract terms. Further, loyalty schemes should review their approach to presenting terms and conditions to ensure consumers have a genuine opportunity to review and understand their policy and operation.

ADMA will be consulting with members and making a submission is response. If you would like to make your views know, contact scott.mcclellan@adma.com.au

Increases to Business Postage Rates Point to Further Decline at Australia Post

ADMA has warned Australia Post that its proposed ‘above CPI’ increases to business postage rates risk further damage to mail volumes.

ADMA has leant its voice to a coalition of industry organisations that are lobbying the competition regulator, the ACCC, to recommend against the price increases that Australia Post has requested. The group which represents $5.6BN of $8.5BN in postage revenue, has made the following points:

  1. Ongoing price increases by AusPost to counter loss of revenue is unsustainable – volumes are currently at risk of accelerated decline and we need to develop partnered strategies to stabilise volumes.
  2. Price increase timing from Australia Post does not recognise the budgets and subscription modelling industry operates under. We need notice of price changes in February for consultation, then implementation of pricing 1 July to allow our customers to develop the price models into their marketing budgets. Implementing price increases across an October/January timeframe catches marketers mid-term on established budgets, unable to mitigate these price increases and leading to an immediate volume declines.
  3. Transparency is key to our business sustainability. Australia Post operates to a four-year forecast. Industry too needs transparency to develop its own forecasts for the sustainability of our businesses. A pricing calculator with established methodologies would provide clarity to industry and remove the ongoing unknown of annual increases.
  4. Industry wants a consolidated approach to reporting. Reported losses via the Letters Business that justify price increases when analysed across the entire Australia Post business show that the Letters business loss report does not take into account latent capacity in postal distribution networks.
  5. Fixed and operational cost efficiencies have not been fully explored by AusPost. According to the Auditor General there remain many opportunities across postal boxes and postal office outlets that can be reviewed to increase operational efficiencies and deliver improved cost modelling to Australia Post’s bottom line.
  6. For more details, read the Australia Post submission to the ACCC. If you would like to make your views know, contact scott.mcclellan@adma.com.au
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