While Europe's General Data Protection Regulation (GDPR) has garnered a lot of attention in the U.S., there is a much larger movement underway towards data portability. Going beyond legal frameworks that merely protect users' data, there is a complementary movement of international scope that seeks to expand customer choices with data, thereby increasing competition in the marketplace.
Previously, we wrote about data portability in sectors of the economy including aviation and banking. In that article, we briefly discussed Australia's "Consumer Data Right," an ambitious policy that establishes the legal basis for data portability in energy, finance and healthcare. Born from the government's commission on competition, one of the Consumer Data Right's chief architects is David Havyatt, an economist with Energy Consumers Australia. Our interview with Mr. Havyatt is below.
Michael Murray: What are your title and responsibilities for Energy Consumers Australia?
David Havyatt: I am the Senior Economist at Energy Consumers Australia. My general responsibilities are to provide the economics at the foundations of our advocacy and to also think about the longer term evolution of the market. Because of my background (I helped introduce Mobile Number Portability) I have picked up the role of representing consumers on the Information Exchange Committee that manages the B2B transactions in the industry.
MM: The Australian government announced it would legislate a national “consumer data right,” allowing customers open access to all their data, starting with their banking, energy, phone and internet transactions. What exactly will this mean for the electricity sector in Australia?
David Havyatt: Interestingly, consumers already have a right to their metered consumption data, including the right to direct that the data be provided to a third party. But the procedures aren’t standardised across providers, especially the third party rights. That means the right has had very little impact on providing data for price comparison or solar panel or battery sizing. The national right will provide a framework within which this can be standardised.
MM: The Australian Government’s Productivity Commission linked the issue of data portability to fair competition between market players. Economically speaking, how does the lack of data portability in different sectors hurt competitive markets?
David Havyatt: The great theoretical market assumes perfect information by buyers and sellers, but we know that isn’t the case. What we have with electricity is a particularly ‘noisy’ market, consumers can’t clearly figure out the difference between offers. In noisy markets consumers don’t shop around as much, so competition isn’t as strong. It is even worse when we get to more sophisticated dynamic views of the market. Innovation in retail offerings usually entails more complexity in pricing with time of use or monthly maximum demand charges, or even more complex demand response approaches. The only way a consumer can understand these kinds of offers is to plug in their historic consumption data.
MM: On privacy, how have you addressed the perceived conflict between privacy and data access with customer consent? (Mission:data has argued in the U.S. that customers’ ability to access their own information shouldn’t raise privacy concerns because energy usage information belongs to the customer.)
David Havyatt: The privacy angle is the part we struggle with. There is a possible argument that metering data just associated with a meter number isn’t personal information covered by the privacy act, but providers who would be releasing the data are very nervous about reputation risk. This is mostly an issue to do with third party access – no one has a problem giving the customer their own data. But we’d like to see a regime where the data holder can rely upon the third party’s statement that they have the explicit informed consent of the consumer to get the data. That is where we hope the economy wide right will help, an legislated approach that provides a mechanism that data holders can rely on.
MM: One challenge to ensuring privacy is, in America at least, weak online identity. Some countries like Iceland or Estonia have cryptographic keys issued to each citizen that maintain strong identity protections in online transactions. How does Australia intend to authenticate customers online so that the wrong person doesn’t access your energy or banking data?
David Havyatt: We have no specific plans. At the moment the banking plans are that you will access your data, and authorise third party access to your data, through the online banking platform of your financial institution. We are developing strong identity protection framework developing for government services, but I can’t see that being linked to private sector data. A lot of the protections need to be on what happens to the data after it is made available – if meter data is used once to develop a quote and then destroyed there is a far different privacy concern than if data is retained.
MM: Do you anticipate energy data portability to enhance the development of energy management offerings from the market?
David Havyatt: Yes, but primarily in the ability to sell the offerings. We have a framework of metering contestability so a provider offering an energy management solution is more likely to do so by use of their own meter than by portability of previously captured data. We are looking to an any-to-any framework to unlock access to data to every app, but our first task is access to data already captured in a provider’s database, not straight from the meter.
MM: What models of successful data portability policies do you look to for guidance or inspiration?
David Havyatt: The way we introduced Mobile Number Portability in Australia. It wasn’t ‘data portability’ as such – but it is a consumer initiated transaction, where they only need to deal with their new provider, and in the back end there are a whole host of B2B messages so that every provider knows which network the number is now on and how to send calls to it. (We have a calling party pays mobile system and mobile numbers are one distinct range. So people now can basically keep their mobile number for life.) There was one particular point where the networks opposed the introduction of portability. The regulator had research on the benefits but not the costs, and told the regulator they couldn’t introduce it unless they could prove the benefits outweighed the costs. The regulator couldn’t do that because only the networks could figure out the cost. I persuaded the regulator that they should reason “Only the networks know the cost, if the cost was greater than the benefits the networks would tell us the costs. As the networks haven’t told us, then the costs must be less than the benefits.”
MM: Do you have any recommendations for U.S. electricity policy? Any problems you’ve encountered that we should avoid?
David Havyatt: My experience so far is that you simply have to keep plugging. The challenge is that providers don’t really seem to want to help solve problems so you have to keep the pressure up. The second challenge is to get regulators and policy makers to adopt the position that you direct the providers to do it, not ask them if they should.