Data rights coming for New Zealand consumers

Monday 12 July, 2021

A Consumer Data Right (CDR) encourages competition between suppliers of goods and services and makes it easier for consumers to compare products and services and switch between suppliers. On 5 July 2021, the Government confirmed that it will introduce legislation to establish a CDR framework in New Zealand.

What is a Consumer Data Right?

A CDR essentially gives the right consumers to securely share data that is held by an industry provider about their use of goods and services with a third party. The data might be shared with a product or service provider in the same industry, such as power companies, or can be shared with a third party in a different industry, such as fintech. The data has to be shared in a machine-readable format, so that the receiving party can use it for the consumer’s benefit.

What will the CDR cover?

The Government will designate markets where the CDR will apply. It will be rolled out industry by industry, with the banking, electricity, and insurance sectors likely to be amongst the first, due to the perceived difficulties and high costs for consumers in switching providers.

The legislation will create the CDR framework and cover the basic obligations of goods and services providers. Industry specific designations will identify what data the CDR applies to and for what purpose, and there will be rules and data standards setting out more detailed obligations. For example, the CDR might cover bank account information and transactions in the banking sector.

The CDR will also allow consumers to consent to an accredited person carrying out an action for them (action initiation), such as requesting a third party to make a payment for goods or services from the consumer’s bank account. Although many countries have CDR regimes (EU, Australia), if New Zealand’s CDR regime allows multi-sector action initiation, this will make it the widest ranging global CDR regime.

Privacy and protection consumer data

MBIE has stated that to protect consumer privacy and ensure consumer data is secure, it will introduce information protection safeguards and require any third party receiving data to be accredited. Data cannot be shared without express and informed consent from consumers, and consent will only last for a limited time. Consumers will have the right to review, amend, or retract their consent at any time.

Next steps

The Government has already start to work on New Zealand’s CDR regime and will be making detailed policy decisions on the framework later this year, with the intention of introducing legislation in 2022. We will be monitoring developments and will provide an update once the Government announces its policy decisions. 

If you have any questions or concerns about how the CDR regime could affect your industry, please contact one of our experts listed below.