Research launched into use of consumer data by retailers, motor insurers and games app providers

The research is part of the Competition and Markets Authority's (CMA) wider project looking into the commercial use of consumer data, including personal data and aggregated, anonymised metadata.

DotEcon and Analysys Mason will undertake the research on the CMA's behalf.

"The researchers will examine available evidence and contact businesses operating in the sectors, as well as third parties, to understand how and why they are collecting and using consumers’ data," the CMA said.

Expert in retail industry contracts Samantha Livesey of Pinsent Masons, the law firm behind Out-Law.com, said that new technologies allow retailers to harness the consumer data they collect. One way retailers are using consumer data is in offering an increasingly personalised shopping experience. However, retailers reliant on the collection and use of personal data must be conscious of their obligations under the Data Protection Act, Livesey said.

“At the centre of many digital initiatives lies the need to collect and harness detailed customer information about the use of products and services,” Livesey said. “The ability to deploy tools that can offer insights into how consumers are interacting with the products or services is vital to helping align brand strategies, develop new ideas and improve their products but businesses need to be clear about their responsibilities for sourcing and using such information. This is obviously a more complex issue when third party information is involved.” 

Late last month, the CMA launched a 'call for information' on the commercial use of consumer data. It said it wanted to gain a better understanding of the benefits, concerns and risks relating to consumer data collection and use by businesses.

One of the areas it said it wanted information on is the way in which businesses generate value from consumer data. It also said it wanted to understand how companies aggregate and share data within industry.

The CMA said that the collection and use of consumer data by companies can bring "significant benefits" for businesses and consumers, from lower prices for consumers, better targeted products and advertising to "more tailored suggestions and purchasing advice for consumers".

However, it said there are also concerns and risks relating to the collection and use of consumer data, from whether consumers properly understand how that data is gathered and used, to the potential impact on competition and innovation if access to the information is "unduly restricted". A further risk arises if consumers are not given the "tools" to control how their data is used, the CMA said.

In 2013, the Office of Fair Trading (OFT), the predecessor regulator to the CMA, warned businesses to be more transparent about the way they collect information about consumers in order to offer personalised prices for goods and services online. At the time the OFT said it would consider taking enforcement action against the firms if it finds "evidence of misleading or unfair practices".