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Loblaw’s points economy for private-health data follows Big Tech’s playbook [The Globe and Mail]

Jan 12, 2021

Should personal health information be tethered to rewards and leveraged for advertising purposes?

In October, Loblaw Cos. Ltd. unveiled a mobile application that refers shoppers to health services and ties loyalty points to wellness behaviours. Developed in a partnership with digital startup League, the app merges digital health technologies with an established loyalty program – PC Optimum, which has about 18 million users. It’s now available in British Columbia, Alberta and Ontario after initially launching in Atlantic Canada.

People who choose to engage with PC Health’s new mobile app are rewarded with modest incentives in the form of PC Optimum points, such as 1,000 points (worth $1) for a “health and well-being reset,” 750 points (75 cents) for a three-week “mental well-being program” or 750 points for a program to “kick-start your fitness routine.” There is also a PC Health Shop that offers personalized products and services and PC Optimum points for some purchases.

Gamification of healthy habits isn’t new, but tethering them to a reliable rewards program is. Governments in Canada have experimented with a mobile application called Carrot Rewards, which was designed to similarly incentivize healthy behaviours. The wellness app accrued more than one million users before shutting down in 2019 and later circulating detailed user data to new owner Optimity.

Upon first glance, it would seem the remuneration of PC Optimum points as a “reward” for doing healthy activities is a win-win for the individual and the retailer, a move that could even save taxpayers money on health care in the long term.

In reality, the points are lousy compensation for valuable personal health information. Let’s call it what it is: Loblaw is incentivizing consent to share previously private information, using meagre discounts on everyday essentials. This is nothing more than a cheap data grab, which will allow the company to strategically leverage insights it derives from users to accelerate its own growth.

The loyalty space isn’t entirely lawless. Ontario’s Consumer Protection Act has rules for loyalty reward points, and the province’s Personal Health Information Protection Act establishes the rules for the collection, use and disclosure of personal health information of individuals. But the app doesn’t quite fit the traditional definitions captured by legislation that came into effect in 2004. Legislators probably did not anticipate people would be cheerfully encouraged to share health information for something as frivolous as loyalty points.

The health care market is a massive industry and a range of companies are working to exploit health data to their benefit, including Silicon Valley giants Facebook, Amazon, Microsoft, Google and Apple. Indeed, it’s not hard to imagine Loblaw launching its own wearable device or offering integration with Fitbit or Apple Health data as a near-term next step.

In recent years, Loblaw has expanded its digital infrastructure through automation and machine learning. In 2016, it purchased QHR, which at the time was Canada’s leading electronic medical records platform. Coupled with its interests in financial services (PC Financial offers bank accounts and credit cards) and pharmacy (Loblaw acquired Shoppers Drug Mart in 2014), the grocer is poised to command some of the most sophisticated data profiles on consumers in the country.

These detailed accounts of a person’s general health, habits and goals will enable the firm to serve more effective “personalized” advertisements to consenting users of the PC Optimum program. Loblaw also offers access to the insights it derives from its customer transaction data to other companies through Loblaw Media, a digital marketing agency. In essence, leveraging its ever-growing retail offerings combined with PC Optimum “perks” to drive customer loyalty, Loblaw is trying to build its own advertising platform that emulates the tech giants.

But coaxing consent with the carrot of an unregulated digital currency (loyalty points) disempowers the individual, who may see the exchange as a necessary one in order to earn points that can save them modest amounts of money.

We regularly consent to share our health data with doctors, but we do so knowing that we are sharing information so that we can receive better care and health care professionals can use it to improve treatment across the whole system. This is a radically different exchange than sharing similar information with a company that will ultimately use it to boost its shareholder returns and profit.

The federal government’s new data privacy legislation (Bill C-11) offers Canadians expanded rights to their own data in organizations’ possession. Policy makers should use this opportunity to scrutinize a program such as PC Health, which is clearly pushing regulatory and privacy boundaries.

The legislation also introduces the concept of algorithmic transparency, which requires organizations to explain why their algorithm made a particular prediction, recommendation or decision based on an individual’s personal data. This transparency will help customers understand how PC Health and other services use their information.

But privacy shouldn’t be our only concern. Loblaw’s data advantage, coupled with a new advertising platform, creates immense power that could further accelerate its dominance in the grocery and pharmacy markets. The push into highly targeted advertising is ripped right out of Big Tech’s playbook.

In this moment when our U.S. neighbours are seeking to break up the tech giants with historic antitrust actions and new accountabilities through modernized privacy legislation, Canada would do well to recognize the echoes of these alarming trends in our everyday lives with a more anticipatory and critical lens.

Vass Bednar is executive director of McMaster University’s master of public policy in digital society 

Republished from The Globe and Mail. Read the original article here