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As more systems move online, information is becoming increasingly important. Data brokering companies can make millions selling personal information to businesses wanting to capitalise on targeted advertising revenue. However, there are various privacy concerns attached to the information industry. Of particular concern is whether customers are fully aware of how your business may use their personal information. For example, your business may use data matching to streamline advertising processes, but this may raise privacy issues if you do not use it according to privacy law. For some guidance, this article will explain how data matching works and whether it is legal in New Zealand.

What Is Data Matching?

Data matching is a process where an algorithm matches one set of data with another to find records that match the same person. This occurs digitally, with the phrase ‘information matching’ referring to the manual version of this process. Government agencies tend to use information matching for more streamlined administrative processes across the public sector. However, agencies can only share this kind of information if they have a legal basis.

For example, public sector employers may match certification credentials against a regulatory body’s records to check the validity of a potential hiree’s qualifications.

Technology has advanced so much that data matching can happen as fast as a computer can run, and information can spread at an unprecedented rate. The Privacy Act, New Zealand’s law regulating personal information and privacy, provides rules for information matching in the public sector. However, if your business is not in the public sector and uses data matching for business purposes, you still need to ensure you comply with privacy law.

Data Matching in Your Business

Businesses will use data matching to develop customer profiles and discover new traits about one of their customers. This is especially useful for targeted advertising. Indeed, targeted advertising is when you advertise your products or services to customers based on character traits you think will lead to them purchasing your goods. The more information you have, the more accurate this process is.

For example, Facebook lets you upload your customers’ email information to target your business’ ads to their Facebook profiles. This process involves data matching, and you can gain information about your customers’ browsing habits.

Various web analytics services will use this process to personalise your advertising services, and your business can take advantage of this to make your advertising more effective.

If a customer searches for “running shoes for sale” in Google, algorithms match that data to their profile depending on their privacy settings. They may then see advertisements on Instagram for your shoe business based on this matched data.

Is Data Matching Legal?

The practice of matching information with other sets of data about a person is not illegal. However, when data matching involves personal information, you need to ensure that the process complies with the principles of the Privacy Act. Personal information is any information that can identify a person, whether on its own or combined with other information. Examples of personal information include:

  • names;
  • images;
  • addresses;
  • mobile numbers;
  • cookie data;
  • credit card details; or
  • IP addresses.

When you data match personal information, you need to ensure you:

  • have collected it legally in a way that does not intrude on privacy;
  • use it for proper purposes;
  • protect it from unauthorised loss, misuse, or disclosure;
  • have gained consent where you need it;
  • share it legally and only when necessary; and
  • know that anyone you share information with complies with NZ privacy law.

Customers also need to know that you have collected this data and what you will use it for. If you share their personal information with third-party advertisers, you also need to tell them this and provide reassurances that their data remains private. You can outline this in your privacy policy.

For example, you can only share personal information with a third party advertiser using data matching if:

  • that was the purpose you collected the information for;
  • you have the customer’s consent to do so; or
  • the information does not identify who it is about.

Tips for Data Matching

Data privacy will be a priority for your customers, so you need to reflect this in your business practices. Analyse all steps of your personal information collection process to ensure you are meeting your privacy law obligations. This means:

  • de-identifying information where possible;
  • implementing contractual safeguards, particularly when sharing with overseas parties;
  • appropriately securing any customer databases with information built up through data matching;
  • letting customers choose what personalised information they give you;
  • giving customers the ability to opt-out of targeted advertising; and
  • informing customers every time you collect information with a link to your privacy policy.

Key Takeaways

New Zealand privacy law applies to all personal information your business uses, including the data you use for data matching. Therefore, you need to ensure this process complies with the Privacy Act and customers are aware that you use their information in this way.

If you would like more information or help with data matching legally, contact LegalVision’s data, privacy, and IT lawyers on 0800 005 570 or fill out the form on this page.

Frequently Asked Questions

What is data matching?

Data matching refers to the process of matching one set of information with another to find records about a particular person. When a computer does this with an algorithm, this is data matching. Otherwise, you may know it as information matching.

Is data matching legal in New Zealand?

The process of matching different information sets about a particular person is not illegal. Many government agencies need to do this for administration. However, if you data match with personal information you collected illegally or did not do so with customer knowledge or consent, it is illegal.

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