New UK Smart Data Laws May Help Broadband Deal Comparisons

The UK Government has proposed to mandate that broadband and phone providers, as well as related companies in the sector, should participate in their new “Smart Data” initiative, which aims to foster the “sharing [of] customer data” in order to deliver better product comparisons and billing management across accounts etc.

At present a Smart Data policy is already being widely used in the banking sector, which makes it easier for consumers and small businesses (SME) to manage bank accounts, “for example by viewing several bank accounts in a single app.” Admittedly, that example sounds like you’d be creating a potentially risky single point of data privacy and security failure, but on the other hand such apps are very helpful and have been around for awhile (e.g. Money Dashboard).

The Government (DCMS and BEIS) has thus decided, as part of their National Data Strategy (NDS), to extend these powers to other sectors and the “most likely first sector” in which they expect this legislation to be used is communications (telecommunications). The energy and retail sectors would follow later.

The powers would make it possible for government to “mandate industry involvement” in Smart Data initiatives across the economy where they are not participating already, “subject to sector-specific assessment and consultation.” The claim is that this will “see companies facilitate new services that drive better deals and savings for consumers, by sharing customer data, at their request, with authorised third parties.”

In theory, such legislation could “improve competition, giving more choice and lower prices to customers,” with the potential to benefit consumers and small businesses by £18 billion a year. The specific examples of broadband ISPs and phone providers are used, which mentions “improved product comparison, viewing all your bills in one place, or easier management across accounts, which could even be designed specifically for vulnerable consumers.”

Paul Scully, UK Minister for Small Businesses and Consumers, said:

“This government is committed to transforming our economy so pioneering businesses can thrive and consumers can save time and money.

Innovative businesses across the UK are already using Smart Data to find new solutions to age-old problems, revolutionising everything from invoicing through to automatic account switching.

It’s vital we harness this technology across the whole of our economy. The roll out of Smart Data into new sectors such as communications will help support even more cutting-edge start-ups and could boost businesses and consumers by a staggering £18 billion a year.”

At this stage we don’t yet know precisely how the industry will seek to make use of the new laws, although Ofcom’s recent move to explore the potential impact of “personalised pricing” on broadband ISP, phone and mobile services (i.e. when providers adopt the ability to set different prices for different customers, based on individual characteristics) might provide one option (here).

At present though personalised pricing remains somewhat of a minefield, which may end up resulting in some people paying more for the same service and thus grows a risk of “unfair” price discrimination. Indeed Ofcom’s research found that most people “felt personalised pricing was ‘unfair’, with a lack of transparency about how the price would be calculated and uncertainty about whether they had a good deal.”

In the short-term we expect that Smart Data may instead lead to simpler improvements, but it clearly has the scope to go further. As the government says, “Smart Data enables businesses to provide consumers with more intuitive, easy-to-use services such as better account and bill management, switching services for savings, and targeted support for vulnerable consumers … For example, Smart Data has facilitated services which could alert a vulnerable consumer’s trusted contact (such as a family member or friend) if there is unusual activity on a bank account.”

The government said they will introduce “primary legislation” to support all of this just as soon as parliamentary time allows, whenever that is.