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News Analysis 19 Apr 2021 - 5 min read

ACCC’s Rod Sims warning: 'Huge gulf' between industry data collection and consumer understanding risks backlash

By Paul McIntyre and Sam Buckingham-Jones

ACCC chair Rod Sims told Mi3: "Industry has got to be really careful here when they simply say, ‘people are okay being tracked’."

A ruling by the Federal Court last Friday finding Google misled consumers about location tracking data is another signal the ACCC will use both consumer and competition law to pounce on data economy misdemeanours. Google's latest breach may lead to fines in the tens of millions of dollars, the ACCC says. Experts say the decision should serve as a warning to all companies that collect data: you are squarely in the ACCC’s sights.

What you need to know:

  • ACCC Chair Rod Sims spoke to Mi3 after a Federal Court ruling that found Google misled its consumers about the collection and use of their location data.
  • Sims says there is a big gap between industry collection and consent practice in the data economy and what the general public realise, which could severely impact consumer trust and government legislation.
  • Google could face fines in the tens of millions, as courts trend towards larger penalties. Volkswagen was fined $125 million after ACCC action for making false representations about compliance with emissions standards.
  • Market experts say this is just the beginning for the data economy, which finds itself linked to several inquiries, investigations and a review by the Attorney General’s Department of the Privacy Act 1988.

“I think industry has got to be really careful here when they simply say, ‘people are okay being tracked’. They’re accepting a whole range of things. Our surveys show when we describe to people what actually happens, they say ‘oh no, you can’t let that happen, that would be dreadful’.”

Rod Sims, ACCC Chair

The chief of Australia’s competition and consumer watchdog says the public are mostly kept in the dark about common and widespread practices in the data economy, with brands and advertisers at risk of a huge backlash if consumers aren’t well-informed about how their data is used.

Rod Sims, the chair of the Australian Competition and Consumer Commission, says Google could face fines in the tens of millions of dollars after a Federal Court ruled the company misled users about how their tracking data was collected.

“Data collection is obviously integral to so much of what is increasingly going on in our society, that’s fine as long as consumers know what they’re in for, or in this case, aren’t misled,” Sims told Mi-3.

“Making sure people have full information is what this court case is all about and making sure consumers aren’t misled.

“I’m really hoping it sends general signals to anyone collecting data off consumers to make sure that what you’re saying is accurate and not in any way biased to get more data rather than less – otherwise we’ll be looking at these issues rather closely.”

“We obviously think a high penalty is appropriate [for Google] if we can get it.”

Rod Sims, ACCC Chair

The court found that when consumers created a new Google Account when setting up an Android device, Google misrepresented that the ‘Location History’ setting was the only setting that affected whether they collected, kept or used personally identifiable data about their location.

The ruling found Google in breach of several sections of the Australian Consumer Law – not the Privacy Act.

Google says it will review its options, “including a possible appeal”. A spokesman said: “We provide robust controls for location data and are always looking to do more.”

How others view the decision

Chris Brinkworth, the founder of adtech company SynergyStack, says the Google ruling comes down to culture.

"Within their process here, Google have not / did not, at this point have "Privacy by Design AND Privacy by Default" as part of their culture,” he says.

“Location and web app activity would never have been enabled by default if they had done so. Again, this therefore wasn't just a technical problem, it was a corporate culture problem.”

He adds there’s a lesson for companies that rely on data: they should create a privacy-first environment.

“Not only were [Google] unclear to users about what was going on, but they also used wording akin to "dark patterns" that convinced users not to disable the collection,” he says.

“The take away, in my view, is that ACCC are giving a warning shot that they are looking at the ways data is collected, stored and used – and the permission/governance around that. 

“As a result, if Australian businesses were to start creating a privacy-first culture with smarter governance, their operations will be less at risk as/when/should the ACCC turn their eyes to similar regulations as the GDPR, CCPA, etc, overseas.”

“The take away, in my view, is that ACCC are giving a warning shot that they are looking at the ways data is collected, stored and used – and the permission/governance around that.”

Chris Brinkworth, founder of SynergyStack

In the dark over data

The ACCC is closely watching the online privacy and data space. It is currently investigating the digital advertising services market, as well as continuing to provide six-monthly updates after an inquiry into major digital platforms that made 23 recommendations for change.

Sims says practices the industry takes for granted are a mystery to many consumers.

“I think there’s still a huge gulf between people’s understanding of what’s going on, and what they might be seen to be agreeing to,” Sims said.

“I think industry has got to be really careful here when they simply say, ‘people are okay being tracked’. They’re accepting a whole range of things. Our surveys show when we describe to people what actually happens, they say ‘oh no, you can’t let that happen, that would be dreadful’.

“Industry has really got to engage in these debates so we don’t get a backlash which could really close down the data economy. It’s a really important issue. We want well-informed consumers.”

A survey from the ACCC gauging consumer sentiment around digital platforms found 90 per cent of people thought users should be allowed to opt out of collections of certain types of information, while 85 per cent felt digital platforms should only collect information needed to provide their products or services.

Google faces possible large penalties

Sims says he expects there will be significant fines for Google’s misleading of consumers, as courts are moving towards larger financial penalties. In December 2019, a Federal Court ordered Volkswagen to pay $125 million after it made false representations about compliance with Australian diesel emissions standards.

He says in the case of Google, the penalty is up to $1.1m per breach.

“We need to look closely at the judgment to see how many breaches we think are appropriate and work out what to put before the court,” he says.

“Penalties are going up, that’s not a benchmark, this is all very case specific stuff, but we obviously think a high penalty is appropriate if we can get it.”

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Paul McIntyre and Sam Buckingham-Jones

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