Do you ever take time to read through any terms and conditions before clicking the ‘accept’ button? It is commonly said that the law hinders innovation, this is due to the notion that law places focus on the protection of rights that come along with a particular innovation but does not permit it. In many parts of the world, this perception seems to be fading away due to the heavy relationship between regulation and innovation.
Digital service in Kenya have received high acceptance, they include mobile applications such as Tala where Kenyans can borrow money digitally easily. They have greatly revolutionized the Kenyan finance sector. Concerns arise as a result of the privacy of information of the users of these mobile platforms. The Digital Credit Audit Report to evaluate the conduct and practice of digital lending in Kenya brought out the fact that digital lenders share their data with third parties. Most lenders offer no opt out solution to agreeing to the terms and conditions and when a customer clicks the ‘accept’ button then it amounts to consent to third party sharing of information.
Should innovation in the digital market then happen at the expense of the data of third parties? Can we find a balance of the two from the enacted 2019 Data Protection Act? The customers identity fulfills the necessity condition in the collection of data by digital borrowers. This is because the creditworthiness of the digital lender must be assessed. Consent, which I term to be the hallmark of data protection must however be obtained by the data subject. It justifies the collection of this data.
The lenders argue that they sought the users’ consent by giving a wordy terms and conditions however the Data Protection Act is very specific on what amounts to consent under Section 2. It states that consent is any manifestation of express, unequivocal, free, specific and informed indication of the data subject’s wishes by a statement or by a clear affirmative action, signifying agreement to the processing of personal data relating to the data subject. This may easily be breached by digital lenders thus puts them at a risk of violating data protection requirements.
A study carried out by Privacy International in 2016 on protecting privacy showed that people would not trade off privacy for the sake of innovation and so when users give out their personal information for the sake of digital lending, it is not their preferred way of doing it. To conclude, the hallmark of the Data Protection Act, ‘consent’ will create more demand for innovative yet privacy sensitive entities.