Companies and organisations should help consumers better understand how their data is being collected and used, according to a consumer group.

Which? said consumers were too often unaware of how data use affects their lives, leading to suspicion and doubt over potentially useful innovations.

The watchdog wants Government, regulators, businesses and other consumer groups to join together to ensure people are informed about how their data has influenced offers they receive or decisions made about them.

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— Which? (@WhichUK) June 5, 2018

It has called for the Competition and Markets Authority (CMA) to urgently carry out a market study of the digital advertising industry to establish if Facebook and Google’s market power could raise prices for advertisers – leading to a risk of goods and services becoming more expensive as a result.

It says it is also time for a “thorough review” of how data is collected, shared and sold in cyberspace, calling for this to be a priority for the Government’s new Centre for Data Ethics and Innovation as soon as it is established.

Alex Neill, Which? managing director of home products and services, said: “It is far from clear that we can trust Google, Facebook and other companies to act as responsible custodians of our data.

“Most ordinary people have a poor understanding of how their data is collected, shared and sold and it is unclear whether the people supposedly in power across Westminster, Whitehall and company boardrooms have a grip on it.

“Facebook, Google and the other tech giants have been able to take advantage of this knowledge gap to rake in data – and therefore profits – on an unprecedented scale.

“We believe the competition regulator must urgently examine how targeted ads affect consumers and whether Facebook and Google’s substantial power in the digital ad market in particular could have knock-on effects on advertisers that lead to consumers paying more.”

A CMA spokesman said: “We are very aware of the growing interest in and scrutiny of how people’s data is used online.

“We’ve already empowered people to use their own data in finding the best deal through Open Banking, and are actively considering whether to take further action regarding how people’s data is used by big tech firms.”

Steve Wood, deputy commissioner of policy at the Information Commissioner’s Office (ICO), said: “This research is a timely and valuable contribution to the debate on data protection, privacy and the digital economy.

“As consumers, sharing data safely and efficiently can make our lives easier, but that digital trail is valuable so it’s important that it stays safe and is only used in ways that we would expect and can control.

“Our new Technology Strategy identifies three priorities: artificial intelligence, cyber security and cross device tracking. These priorities will drive the ICO’s policy, research, education and enforcement work over the next two years.”

Download BT's latest report Dealing with the new EU General Data Protection Regulation