Empowering consumers in the new economy



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The digital economy provides both enormous opportunities as well as some risks for consumers, according to panellists discussing the empowerment of consumers at CEDA’s State of the Nation conference.

“Whether we’re prepared for it or not, my contention is that digital will overpower analogue and physical in every respect and in particular digital business models will overpower physical business models,” Data Standards Body, Consumer Data Right Chair and CEDA Director Andrew Stevens said, kicking off the discussion.

“We’ve seen there are some industries where this is underway and having quite disruptive impact and we see other industries where there’s very little,” he said.

“One of the things that bothers me as a director of CEDA is that we don’t have any organisations that are making any material progress in being like the FANGs (Facebook, Apple, Amazon, Netflix, Google) of the US,” he said.

“We don’t have companies that are really well advanced and at scale in developing the business models that will capitalise on this infinite and abundant capability of what, quite frankly, is the greatest opportunity the world has ever seen.”

In terms of empowering consumers, Mr Stevens said, the question is whether the digital transformation of our economy is a threat to consumers, an opportunity or both.

Mr Stevens was joined in a discussion of these questions by Australian Unity Chief Customer Officer and Group Executive Digital, Amanda Hagan; Australian Competition and Consumer Commission (ACC) Deputy Chair, Delia Rickard PSM; and Consumer Action Law Centre Chief Executive Officer, Gerard Brody.
Ms Hagan said the availability of data in the healthcare sector could improve cost, convenience and outcomes for consumers.

“It’s not digital progress that’s holding us back in healthcare,” she said.

“There’s enormous opportunity and I do believe it will be digital and data that are going to empower consumers and that will be how we start to look at improving outcomes and reduce cost in the healthcare system – by empowering consumers to make decisions.”

Ms Hagan said price discovery and understanding what the value is that you get for the price are missing from the healthcare market place. Yet we need both of these to empower consumers and it will be data and digital technology that get us there.

She said, for example, access to data could help a patient make an informed decision about a surgical procedure, such as a hip replacement, based on the price and the likely outcomes.



Despite the potential for data to empower consumers in healthcare, Ms Rickard said the newly released ACCC annual report on the private health sector showed “we are so far from consumers being able to make informed decisions about quality or price. It has to get better.”

Ms Rickard said data and new technology present fantastic opportunities for consumers. The consumer data right reforms should enable consumers to access their data in a safe way and feed it into an accredited comparison service.

However, she said, currently comparison services are complex and people don’t always get the best deal, calling into question whether these services are actually benefiting consumers.

“One problem is the mystery of algorithms which are hard to regulate and we can’t really tell if they are giving people the best deal or cheapest deal of if they have been tweaked so the comparison service is going to get the best commission rate,” Ms Rickard said.

“We need to be able to ensure the integrity of the services that we feed the data into.”

Ms Rickard warned another potential pitfall for consumers is scams.

She said as a nation $340 million has been lost in scams. Most of the scammers access their victims by modern technology such as VoIP operated calls, social media or email.

“We need to get smarter and better at finding how we stop that tsunami of calls coming in and how we protect people better in that space,” she said.

Mr Brody agreed the digital economy and data bring a lot of opportunities for consumers but also risks.

He said the Consumer Action Law Centre has been concerned by the growth in lead generation online

“There is a growing number of organisations collecting details on people online such as through competitions and surveys and then on-selling them to marketing companies to make unsolicited approaches – sometimes using high pressure in unsolicited selling,” he said.

People have, as a result, been signed up to services that are ill-suited or they can’t afford.

“I do think we need to look at putting protections in place as these markets grow,” he said.

“The other area that I think is really worth watching is the way in which data can be used to price products and services.

“Previously price was more or less a function of the product – how much it cost to make and so forth. Increasingly today we’re seeing price as a function of the consumer – how much they’re willing to pay based on a lot of detail and data that the industry holds about the customer. So, we see price discrimination.”

He said price discrimination is not always bad and we’re used to seeing it with airlines where prices change according to time of travel or how far in advance you book.

But, he said, businesses in areas like telecommunications and energy are being able to distinguish whether a customer is the type likely to shop around, who they will give a really good price to, and those that don’t shop around or are loyal to their service provider, who over time will suffer an increased price.

“We have to think about fairness in that,” he said.

“Surely the market should be delivering the best prices for all consumers not only those who are capable or willing to shop around.”