There is a delicate balancing act between privacy and not restraining data innovation.

Jodie Sangster is the CEO of the Association for Data-driven Marketing and Advertising (ADMA) and says unless Australia follows suit, we will lag behind on innovation in the digital economy.

Politicians in the US passed legislation last week which prevented Obama-era consumer privacy laws coming into effect that required internet service providers to get permission before selling off their customer’s internet history data.

The bill, which is expected to be signed into law by Donald Trump, has basically left the status-quo in place but has been loudly opposed by consumer advocacy groups.

But while many internet users in America are crying bloody murder over the scrapping of the digital privacy protections, Ms Sangster says the issue has been largely mischaracterised — and she’s not the only one.

She worries a similar misunderstanding about how people’s data is used and the potential increase in privacy red tape suggested by the government’s Productivity Commission in Australia will put our industries at a disadvantage.

“We have a very good privacy regime here in Australia. What we don’t want to do is put so many restrictions that we stifle innovation,” she told news.com.au.

In a blog post last week, she applauded the move in the US and suggested Australia also lessen the burden of privacy red tape where it’s not necessary.

“This is a step forward to remove red tape and drive a digital economy in the US — proof that the government is serious about investing in a digital and data-driven future.

“So what does this mean for Australia? I feel that more so than ever, our country needs to take heed,” she wrote.

Jodie Sangster is worried we will stifle innovation if we increase restrictions on the use of people’s personal data.Source:Supplied

However the recent vote in the US stands in contrast to the trend in Europe which has seen digital privacy protections strengthened in recent years, says David Cake.

He is the Chair of consumer advocacy group Electronic Frontiers Australia and believes a weakening of the privacy regime for internet users would likely “create overall problems” for the Australian digital economy.

“You drive the digital economy by becoming part of the emerging global consensus that privacy matters, users want it, and people want government to protect it,” he told news.com.au.

“Of course Jodie Sangster, who is CEO of an industry association for an industry wholly dependent on data flows about user behaviour, sees this as an opportunity. But just because it would have some value for a small sector does not mean it would add to the health of the broader digital economy.”

The Productivity Commission’s inquiry into Data Availability and Use of Australian internet users handed its final report to the government on Friday. The draft report published in October made suggestions of allowing citizens greater access to their data.

Ms Sangster is concerned about statements made by the commission supporting the increase of restrictions around the use of people’s data.

“If you don’t have the ability to use data to better understand your market, to better understand your customers, to better understand product, to better understand future business, if you don’t have access to that information, that is what is going to stifle innovation,” she said.

“We’ve got to be careful.”

According to Ms Sangster, people’s online data is split up into either sensitive data and what’s considered non-sensitive data. Sensitive data includes things related to health and sexual orientation, for example, and has a “higher threshold” when it comes to privacy protections.

Google and Facebook account for about 70 per cent of online advertising.Source:AFP

In Australia, the government has mandated that customer’s internet metadata is tracked and collected for two years by ISPs including the websites we visit, and be made available to the government upon request.

And of course, Google and Facebook already tracks your online activity as much as they can. The vast amount of data they have access to means the two companies dominate digital advertising on the web, effectively creating a global duopoly.

Despite the already extensive use of people’s data by certain digital companies, the scrapping of privacy protections in the US has been met with scathing criticism by some.

Former chairman of the Federal Communications Commission in the US Tom Wheeler who proposed the initial protections said the move will ensure “free rein” for ISPs “to do what they like with your browsing history, shopping habits, your location and other information gleaned from your online activity”.

“This resolution is a direct attack on consumer rights, on privacy, on rules that afford basic protection against intrusive and illegal interference with consumers,” said one Democratic senator prior to the bill being passed.

However the hysteria has been met with strong rebuttal from others.

The rejection of the privacy protection “will not affect privacy in the slightest,” wrote internet industry analyst Larry Downes in Forbes.

Right or wrong, many US netizens that populate social media sites like reddit have been up in arms since the bill was passed and have been trying to fight back.

In an apparent attempt to highlight how the bill can be used to expose an individual’s internet history, a mobile software engineer from Tennessee has started a crowd-funding campaign to outbid businesses for the internet history of politicians who backed the bill, as well as Donald Trump.

The page had a fundraising goal of $US10,000 to bid for the browser histories. Despite contention over the viability of such a plan, at the time of writing more than $US200,000 had been donated.