CMA begins research into commercial use of consumer data by retailers, motor insurers and games app providers

Competition and Markets Authority wants to know how and why companies are collecting and using consumer data

The Competition and Markets Authority (CMA) is to begin research into the collection and commercial use of consumer data by motor insurers, clothing retailers and games app makers.

The CMA is an independent non-ministerial government department that carries out investigations into mergers, markets and the regulated industries. It is also responsible for enforcing competition and consumer law.

The CMA has appointed consultants DotEcon and Analysys Mason to conduct the review, with the goal of better understanding the commercial use of consumer data, and how it affects consumers, businesses, competition and the wider economy.

"[The research] will provide the CMA with greater detail of how certain markets in the economy collect and use consumer data in practice. 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 stated.

The wider project was launched with a call for information on 27 January 2015.

The CMA acknowledged that the collection and use of consumer data by companies can bring "significant benefits" for businesses and consumers. It said that it was keen to understand more about the way data was used and the value of it to the business that collects the data, and to others when it is sold or licensed for re-use.

"[The research] will be looking at both the benefits and potential drawbacks that accompany this growing ability to understand consumer preferences and behaviours. It will also consider the market impact of consumer protection legislation and other relevant regulations," the CMA said.

Last year, the CMA took over functions of the Competition Commission and some consumer functions of the Office of Fair Trading (OFT).

Back in 2012, the OFT launched an investigation into the extent to which businesses are using customer data to target consumers with personalised prices.

Computing previously looked into the potential for companies such as Tesco to overstep the mark and exploit their customers' trust by using data for reasons other than they disclose.

Readers interested in developments in the big data space should check out Computing's summit on 26 March 2015 on big data and analytics, details can be found here. Qualified end users can attend for free.