The process is similar to submitting documents to banks or insurance companies. There is no law which binds any two parties to exchange information until both parties are consenting to exchange of information.
Essentially they offer a service and they set their rules and the choice is your's if you would like to subscribe or not.
Government or laws have no role to play in this. It is an agreement between two consenting entities.
I became extremely happy after listening your answer. I really didn't knew this. You said absolutely right that two persons or two parties can do any agreement in between them and exchange each other's details. It's our self-responsibility to check which detail are we providing to whom. And there's no involvement of government in all this.
Thank you