Government fast-tracks midata initiative

Many businesses will soon be compelled to hand over customers’ transaction data, under Government plans to make the midata scheme compulsory for certain sectors. Existing legislation allows customers to request their personal information by paying a fee of up to £10 but they cannot view all the transactional data held about them.

The Government will initially focus on three core sectors: banks and payment companies, mobile phone firms and energy companies. By giving customers instant digital access to their data in a portable and safe format, the Government hopes that consumers will be in a better position to compare prices and make more informed decisions about which tariff to use.

Government modifies its position after midata consultation
In the midata consultation earlier in the summer, to which the DMA contributed, the Government proposed that midata be compulsory for all businesses. It has since agreed to continue with the existing voluntary midata scheme but if this doesn’t move fast enough it will introduce legislation to make the scheme compulsory for the three core sectors. The Government was initially planning to introduce the option to legislate for all sectors, so the DMA is pleased that the Government has restricted this to the core sectors.

The DMA believes that the existing self-regulatory programme is the most effective way of giving consumers greater control over their data and welcomes the Government’s decision not to introduce legislation at present.

Chris Combemale, executive director of the DMA, said: “We call on companies to take the initiative to be open and transparent with consumers about the information they hold and how they use it. The consequences of failing to do so would be detrimental to businesses and the economy.”

The Government will consider extending midata to other sectors if:

1. The market is not working well for consumers. This would include where consumers find it difficult to make the right choice or where consumers find it difficult to predict their behaviour, but where the behaviour affects the price they pay.

2. There is a tendency to a one-to-one, long-term relationship between the service provider and the consumer with a stream of ongoing transactions.

3. There are low levels of switching by consumers.

4. Competition between service providers needs promoting.

5. The service providers are not providing consumers with the transactional information voluntarily.

Security and privacy issues of midata
The Government has also recognised that the midata scheme will need to consider the security and privacy implications of the release of transactional data. It will work with business and consumer groups as part of the voluntary programme to ensure that the risks are properly addressed either by current data protection and consumer protection legislation or by specific solutions developed as part of the midata scheme. The Government is also proposing to make the Information Commissioner’s Office the lead enforcer for the midata scheme, recognising the crossover of midata issues with data protection issues.

Micro-businesses (firms with 1-10 employees) could potentially have the same rights as consumers under the midata initiative, if the Government decides to extend the right to request transactional data to include this section of the business community.

The DMA will keep members updated with further developments through the Legal Newsletter. The Government response to the consultation is available here.

Contact James Milligan, 020 7291 3360.