TOKYO -- Japan will permit unrestricted sales of data such as credit card transactions and routes traveled by cars if the companies properly remove personally identifiable information, a move that could power the development of products closely tailored to customer tastes.
The Personal Information Protection Commission has set forth methods for processing five types of data: credit card transactions, transaction histories from point-of-sale terminals, driving data from automobiles, railroad trip data and electricity use. Such processing will let this data be used for secondary purposes without the subject's permission under rules that take effect May 30, when a revised law concerning personal information goes into full force.
Processing would remove information such as names, telephone numbers and detailed addresses linking data to individuals. Data on automobile routes, for example, would not reveal a specific make and model, but would indicate whether a car was a compact or luxury vehicle. The first and last several minutes of driving data also would be erased to hide where the person lives.
Businesses caught selling insufficiently scrubbed data will have their names publicized and be required to enact measures preventing recurrent violations under the commission's instruction. The commission will open a help desk to advise companies on the rules as soon as this year.
Expanding the rules to include data such as electronic payments will be considered as companies' needs grow.
Know your customer
Consumer protection organizations abroad, such as the U.S. Federal Trade Commission and U.K. Information Commissioner's Office, have had similar processing rules since 2012. The corporate sector is taking advantage of them more frequently: German automaker BMW said in February that it would share vehicle data with Israel's Mobileye, a developer of advanced driver-assistance systems. Japan's business sector has urged the government here to catch up.
Letting companies sell such data to peers or place it in paid-access databases will allow wider use of the information in product development and market surveys. Analysis of driving data could spur development of autonomous-vehicle technology, which requires more elaborate digital maps than are widely available, or of custom insurance with fine-tuned premiums.
Credit card and point-of-sale transaction data could help manufacturers and retailers coordinate inventories better to prevent waste as well as devise products more attuned to customers' needs. Last year, Japan's Credit Saison and internet marketing firm Digital Garage began a service using artificial intelligence to analyze credit card data.
Companies have run into trouble for such sharing in the past. East Japan Railway, or JR East, in 2013 sold data on rides taken using its Suica smart card to Hitachi without first notifying customers, sparking debate over privacy and the use of so-called big data.