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Australian Senate Standing Committee for the Scrutiny of Bills - Scrutiny Digests |
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Purpose
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This bill seeks to amend the Competition and Consumer Act 2010 and
the Australian Information Commissioner Act 2010 to introduce a consumer
data right for consumers to authorise data sharing and use
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Portfolio
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Treasury
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Introduced
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House of Representatives on 24 July 2019
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Bill status
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Received Royal Assent on 12 August 2019
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2.104 In Scrutiny Digest 4 of 2019 the committee requested the Treasurer's advice as to the rationale for including a number of no-invalidity clauses in relation to consultation requirements in the bill.[51]
Treasurer's response[52]
2.105 The Treasurer advised:
No-invalidity clauses in relation to the consultation requirements were included in the Bill to provide certainty on the validity of the instruments for the benefit of users and consumers of the Consumer Data Right (CDR).
The no-invalidity clauses in the Bill reflect the general position as set out in section 19 of the Legislation Act 2003, that the validity or enforceability of a legislative instrument is not affected by a failure to consult. Recognising the importance of consultation given the broad rule-making power, the Bill creates considerably stricter consultation requirements than those set out in the Legislation Act 2003. This sets significantly higher expectations in respect of the CDR than standard legislative processes.
However, the importance of thorough consultation was balanced against the need for certainty and consumer protection once the rules have been made. Without a no-invalidity clause, the designation instrument or rules may be challenged on the issue of whether consultation undertaken was adequate and whether submissions were properly considered and acted or not acted upon.
The lack of a no-invalidity clause would also create perceived and, actual risk for the validity of the rules, even where consultation in accordance within the requirements in the Bill have been undertaken. The rules create rights for consumers and inform how the privacy safeguards will be applied once data has been shared under the rules. As a result, it is ·not desirable from a consumer protection perspective for the rules or designation instrument to be subject to challenge on the basis of the quality of the consultation.
As noted by the Committee, both the designation by the Minister of a sector to which the regime applies and the consumer data rules made by the ACCC are instruments subject to Parliamentary scrutiny and disallowance. The latter can only be made with the Minister's consent, unless they are emergency rules, which the minister can direct to be revoked. It is expected that the extent and quality of the ACCC's consultation would be a consideration when providing this consent.
Committee comment
2.106 The committee thanks the Treasurer for this response. The committee notes the Treasurer's advice that no-invalidity clauses in relation to the consultation requirements were included in the bill to provide certainty on the validity of the instruments for the benefit of users and consumers of the Consumer Data Right. The committee also notes the Treasurer's advice that the lack of a no-invalidity clause would also create perceived and, actual risk for the validity of the rules, even where consultation in accordance within the requirements in the bill have been undertaken.
2.107 The committee takes this opportunity to reiterate its general view that where the Parliament delegates its legislative power in relation to significant regulatory schemes it is appropriate that specific consultation obligations (beyond those in section 17 of the Legislation Act 2003) are included in the bill and that compliance with these obligations is a condition of the validity of the legislative instrument. Providing that the instrument remains valid and enforceable even if the ACCC or the Minister fail to comply with the consultation requirements may undermine including such requirements in the legislation.
2.108 The committee notes the Treasurer's advice that the relevant instruments are subject to Parliamentary scrutiny and disallowance and that the consumer data rules can only be made with the minister's consent. Although the instruments may be disallowable, it may be difficult for parliamentarians to know whether appropriate consultation has taken place within the timeframe for disallowance. There is also no requirement on the face of the bill that the minister is required to consider the extent and quality of consultation when consenting to the making of consumer data rules.
2.109 In light of the fact that the bill has already passed both Houses of Parliament, the committee makes no further comment on this matter.
2.110 In Scrutiny Digest 4 of 2019 the committee requested the Treasurer's more detailed advice as to why it is considered necessary and appropriate to allow potentially significant matters to be included in instruments or standards that would not be subject to any parliamentary control or scrutiny.[55]
Treasurer's response
2.111 The Treasurer advised:
The Committee raised concerns about the potential for significant matters to be included in two classes of instruments, the data standards and an instrument recognising an external dispute resolution scheme, which are not subject to Parliamentary control or scrutiny.
Data standards
In relation to the data standards, the use of non-statutory standards was appropriate because of the highly technical and specialised nature of the data standards. Further, given the expected frequency and volume of revisions, it would be inappropriate to designate the standards as legislative instruments.
As technical adviser to the interim data standards body, Data61 prepared large volumes of draft data standards, much of which are comprised of, or closely resemble, computer programming code. Data61's log of changes identified almost 40 revisions to the draft standards between December 2018 and July 2019.
Importantly, in making consumer data rules, the ACCC is appropriately empowered to place limits and controls on the content and scope of the data standards where necessary. The data standards must not be inconsistent with the consumer data rules, and are not binding unless the consumer data rules so require.
External dispute resolution scheme
The ability to recognise an external dispute resolution scheme by notifiable instrument was appropriate as it is a mechanical matter appropriately within the administrative control of the ACCC as a CDR regulator.
The use of a notifiable instrument is consistent with arrangements under section 35A of the Privacy Act 1988, which provides the Australian Information Commissioner the ability to recognise an external dispute resolution scheme by written notice. Similarly, section 1050 of the Corporations Act 2001 provided for the authorisation of the Australian Financial Complaints Authority scheme by notifiable instrument.
Committee comment
2.112 The committee thanks the Treasurer for this response. The committee notes the Treasurer's advice that, in relation to the data standards, the use of non-statutory standards was appropriate because of the highly technical and specialised nature of the data standards and that given the expected frequency and volume of revisions, it would be inappropriate to designate the standards as legislative instruments. The committee also notes that the data standards must not be inconsistent with the consumer data rules, and are not binding unless the consumer data rules so require.
2.113 The committee also notes the Treasurer's advice that the ability to recognise an external dispute resolution scheme by notifiable instrument was appropriate as it is a mechanical matter appropriately within the administrative control of the ACCC as a regulator. The committee also notes the use of a notifiable instrument in this instance is consistent with arrangements under section 35A of the Privacy Act 1988.
2.114 In light of the fact that the bill has already passed both Houses of Parliament, the committee makes no further comment on this matter.
2.115 In Scrutiny Digest 4 of 2019 the committee requested the Treasurer's detailed justification as to the appropriateness of including specified matters as an offence-specific defence. The committee suggested that it may be appropriate if proposed subsection 56BN(2) was amended to be included as an element of the offence. The committee requested the Treasurer's advice in relation to this matter.[57]
Treasurer's response
2.116 The Treasurer advised:
Section 56BN of the Competition and Consumer Act 2010 (the CCA) regulates misleading or deceptive conduct in a wide range of circumstances relating to the disclosure of CDR data, both in terms of the actors (e.g., data holders, accredited data recipients and CDR consumers) and the provisions of the CCA, and consumer data rules in relation to which an offence may occur.
Subsection 56BN(2) includes an offence-specific defence where the misleading particular is not material, and as noted by the Committee, this mechanism places the evidentiary burden on the defendant. This was appropriate because the mitigating circumstance will often rely on information that is peculiarly within the knowledge of the defendant and therefore it was included an exception, rather than as an element of the offence.
For example, an accredited person is required when seeking consent to collect CDR data to be specific as to the purpose for which the CDR data may be collected. Where proceedings for an offence arises relating to whether particular conduct fell within that purpose, the accredited person may argue that any differences in interpretation of that purpose were not misleading in a material particular. However, the evidence about the materiality would likely be peculiarly within the knowledge of the defendant, relating to the manner in which the accredited person's business provides services with the use of CDR data.
It would be unduly onerous in this case to require the plaintiff to prove the materiality in the absence of evidence having first been raised by the defendant and, by comparison, relatively straightforward for the defendant to raise this evidence.
The offence in section 56BN was designed to be similar to equivalent offence provisions in the Criminal Code (sections 136.1 and 137.1). These Criminal Code provisions also contain offence-specific defences for circumstances where the misleading particular was not material. The consistency between section 56BN and the Criminal Code provisions is appropriate as they are enacted to regulate similar kinds of circumstances.
Further, given the prosecution is also required to establish that the conduct leads to the result that a person is, or is likely to be, misled-or deceived about the use or disclosure of CDR data under the regime (paragraph 56BN(1)(c)), the circumstances in which the defence may actually arise are likely to be limited.
Committee comment
2.117 The committee thanks the Treasurer for this response. The committee notes the Treasurer's advice that the use of an offence-specific defence was appropriate because the mitigating circumstance will often rely on information that is peculiarly within the knowledge of the defendant and therefore it was included an exception, rather than as an element of the offence.
2.118 The committee also notes the Treasurer's advice that it would be it would be unduly onerous in this case to require the plaintiff to prove the materiality in the absence of evidence having first been raised by the defendant and, by comparison, relatively straightforward for the defendant to raise this evidence.
2.119 In light of the fact that the bill has already passed both Houses of Parliament, the committee makes no further comment on this matter.
2.120 In Scrutiny Digest 4 of 2019 the committee requested the Treasurer's more detailed advice as to whether the relevant IOS standards will be made freely available to all persons interested in the law.[59]
Treasurer's response
2.121 The Treasurer advised:
The Committee requested advice on the accessibility of relevant International Organisation for Standardisation (IOS) standards and it is acknowledged that the Bill allows the incorporation by reference of external material, such as a number of IOS standards, which may attract a fee for access.
The costs to the affected businesses of accessing any such materials is relatively moderate and would be far outweighed by the costs to those businesses of having to comply with bespoke standards, rather than broadly adopted existing widely used ones. In addition to reducing implementation and operational costs for participants, the use of widely accepted standards may also be required to support the broader interoperability of the system.
However, data standards which are developed by the data standards body itself will be made publicly available at no cost, and be published under creative commons licenses - see section 56FC of the CCA. The introduction of any standards, or similar documents, are done in consultation with stakeholders primarily through GitHub, and the Data Standards Body Advisory Committee.
Committee comment
2.122 The committee thanks the Treasurer for this response. The committee notes the Treasurer's advice that the costs to the affected businesses of accessing incorporated International Organisation for Standardisation standards is relatively moderate and would be far outweighed by the costs to those businesses of having to comply with bespoke standards, rather than broadly adopted existing widely used ones.
2.123 The committee takes this opportunity to reiterate that it is fundamental principle of the rule of the law that every person subject to the law should be able to freely and readily access its terms. As a result, the committee will have scrutiny concerns when external materials that are incorporated into the law are not freely and readily available to persons to whom the law applies, or who may otherwise be interested in the law.
2.124 In light of the fact that the bill has already passed both Houses of Parliament, the committee makes no further comment on this matter.
2.125 In Scrutiny Digest 4 of 2019 the committee requested the Treasurer's more detailed advice as to why it is considered necessary and appropriate to allow the ACCC and the regulations to provide exemptions from the operation of the new consumer data right scheme.[62]
Treasurer's response
2.126 The Treasurer advised:
The exemption and modification regulation-making powers in section 56GB of the CCA and the ACCC's power in section 56GD of the CCA to exempt individuals are necessary and appropriate as the matters covered are of a highly specific nature, apply to a limited number of entities and are only intended to be used in exceptional circumstances.
The CDR regime will apply to broad sectors of the economy, likely resulting in circumstances for particular participants, or classes of participants, where the generally applicable rules will lead to an unintended result. Exemptions of these kinds are generally not appropriate for inclusion in the primary law, as they would increase the complexity of the primary law while addressing matters relevant only to a limited number of entities.
These exemption powers are intended to be used in exceptional circumstances. An example of exceptional circumstances which might justify granting an exemption or modification in regulations for section 56GB is where compliance by a class of entities with the CDR regime might conflict with the laws of another jurisdiction. The ACCC's power in section 56GD is narrower, applying only to individuals. An example of where an individual exemption from the ACCC might be necessary under section 56GD is where a particular data holder may not be in a position to comply with requests in accordance with the regime at the time it begins to apply to the entity.
As the Committee notes, there is no criteria for making a decision whether to exempt a person set out in section 56GD. As the regime will eventually apply to many sectors of the economy, it would not be possible to foresee where exceptional circumstances will arise for each sector that may necessitate an exemption. This is because those circumstances usually arise on a sector or participant-specific basis and it would not be possible to develop meaningful criteria for the exercise of exemption and modification powers. However, the ACCC would be required to consider the object of Part IVD of the CCA when making a decision.
The Committee's concerns about the lack of a specific consultation requirement before making regulations for the purposes of new section 56GE are noted. Consistent with usual practice, it is expected that consultation would occur before making regulations for the purposes of this section, especially where this would impact businesses and consumers as required under section 17 of the Legislation Act 2003.
Committee comment
2.127 The committee thanks the Treasurer for this response. The committee notes the Treasurer's advice that the exemption and modification regulation-making powers to exempt individuals are necessary and appropriate as the matters covered are of a highly specific nature, apply to a limited number of entities and are only intended to be used in exceptional circumstances.
2.128 The committee also notes the Treasurer's advice that as the regime will eventually apply to many sectors of the economy, it would not be possible to foresee where exceptional circumstances will arise for each sector that may necessitate an exemption. However, it remains unclear to the committee why at least high level guidance or criteria around how the power to exempt entities from the operation of the consumer data rules could not have been included on the face of the bill.
2.129 The committee notes the Treasurer's advice that it is expected that consultation would occur before making regulations as required under section 17 of the Legislation Act 2003. The committee reiterates that where the Parliament delegates its legislative power in relation to significant regulatory schemes the committee considers that it is appropriate that specific consultation obligations (beyond those in section 17 of the Legislation Act 2003) are included in the bill and that compliance with these obligations is a condition of the validity of the legislative instrument. As a failure to consult in accordance with section 17 of the Legislation Act 2003 does not affect the validity of an instrument, the committee does not consider that the consultation requirements of the Legislation Act 2003 are sufficient where significant elements of a legislative scheme are left to delegated legislation.
2.130 In light of the fact that the bill has already passed both Houses of Parliament, the committee makes no further comment on this matter.
[50] Schedule 1, item 1, proposed section 56AH and subsections 56BQ(2), 56BS(2) and 56DA(5). The committee draws senators' attention to these provisions pursuant to Senate standing order 24(1)(a)(iii), (iv) and (v).
[51] Senate Scrutiny of Bills Committee, Scrutiny Digest 4 of 2019, pp. 27-29.
[52] The minister responded to the committee's comments in a letter dated 15 August 2019. A copy of the letter is available on the committee's website: see correspondence relating to Scrutiny Digest 5 of 2019 available at: www.aph.gov.au/senate_scrutiny_digest
[53] Schedule 1, item 1, proposed section 56DA. The committee draws senators’ attention to this provision pursuant to Senate Standing Order 24(1)(a)(iv) and (v).
[54] Schedule 1, item 1, proposed section 56FA. The committee draws senators’ attention to this provision pursuant to Senate Standing Order 24(1)(a)(iv) and (v).
[55] Senate Scrutiny of Bills Committee, Scrutiny Digest 4 of 2019, pp. 29-31.
[56] Schedule 1, item 1, proposed subsection 56BN(2). The committee draws senators’ attention to this provision pursuant to Senate Standing Order 24(1)(a)(i).
[57] Senate Scrutiny of Bills Committee, Scrutiny Digest 4 of 2019, pp. 31-33.
[58] Schedule 1, item 1, proposed section 56GB. The committee draws senators’ attention to this provision pursuant to Senate Standing Order 24(1)(a)(v).
[59] Senate Scrutiny of Bills Committee, Scrutiny Digest 4 of 2019, pp. 33-34.
[60] Schedule 1, item 1, proposed section 56GD. The committee draws senators’ attention to this provision pursuant to Senate standing order 24(1)(a)(iv) and (v).
[61] Schedule 1, item 1, proposed section 56GE. The committee draws senators’ attention to this provision pursuant to Senate standing order 24(1)(a)(iv) and (v).
[62] Senate Scrutiny of Bills Committee, Scrutiny Digest 4 of 2019, pp. 34-36.
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