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Policing the Privacy Act

FEDERAL Privacy Commissioner Malcolm Crompton has been appointed to oversee a paradigm shift in the attitudes of the Australian business community. Commissioner Crompton has indicated that he will follow the example set by ACCC chairman Alan Fels of using public humiliation for high profile, repeat offenders.

“The law requires companies to stop treating this data as their property and start regarding it as something they have been entrusted with, something to be looked after carefully, Commissioner Crompton said.

He said companies could choose to “live dangerously” and ignore the new legislation, but that anyone considering this option should be aware that public humiliation was a weapon that “takes pride of place in the enforcement arsenal”.

With a budget of $4 million, the Commissioner will have limited resources for enforcement. The Government’s aim has been to provide a low-cost compliance process that utilises conciliation and mediation, rather than expensive legal actions.

However, the Act sets out that, if an aggrieved individual and an organisation have not been able to negotiate a satisfactory solution, the complaint will be investigated by an adjudicator or an independent adjudicator. Orders can be made to redress any loss or damage found to have been suffered, which may be enforced in the Federal Court.

“Such enforcement proceedings will be an expensive exercise that ties up a considerable amount of resources,” Allens Arthur Robinson solicitor Karen Hasluck-Janes said.

Brian Martin from KPMG has suggested that, in the US, adverse publicity has been a significant consideration to encourage compliance:

“Operational risk associated with loss of reputation will be high,” he said.

“Take the example of DoubleClick. It was considering matching customers’ browsing habits with a direct marketing database.

“Doubleclick suffered a one third drop in its share price that was largely attributed to the resultant negative publicity of its matching practices arising from a Federal Trade Commission investigation.”

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