Leaked privacy proposals from the European Commission, which would disable websites and browsers from being able to track people’s online behaviour and target them with advertising unless they have opted-in, have been denounced by the Internet Advertising Bureau (IAB) for victimising publishers.
The strict new privacy proposals, which intend to crackdown on the way browsers and websites like Google and Facebook process consumer data, would force such parties to invite users to opt-in to view adverts based on their browsing history, replacing the default opt-out version, according to a leaked draft of new proposals, according to the Financial Times.
Tighter regulation of the big internet advertising giants has been long-demanded by the industry in the hope it would curb their increasing dominance, with some reports putting the stranglehold of Google and Facebook at 75% of total global online advertising.
However, the IAB has condemned the new proposals for centering around the “wrong perception of how digital advertising works”. Although the draft proposals are primarily aimed at the internet's behemoth media owners and adtech companies, the fallout is that traditional publishers' ad revenues will also be negatively effected; this comes at a time when publishers need all the help they can get, argued Yves Schwarzbart, head of policy and regulatory affairs at IAB UK.
He added: “When you look at the leak it is very concerning because it could truly undermine the internet as we know it both for experience and entertainment and news, it would seriously disrupt that from a third party point of view."
Schwarzbart also voiced his opinion that another real worry is how such proposals would affect publishers' adtech partners. "It is something that is, I think, primarily aimed at the adtech companies and by extension the publishers. We know already publishers are in a challenging environment when it comes to generating revenue. This would put them in a much worse position," he added.
In April the European Union agreed to pass the General Data Protection Regulations (GDPR) which would harmonise data privacy laws across Europe. Schwarzbart expressed concerns that the leaked documents outline proposals which “arguably go further” than the GDPR requirements, when there is still a huge amount of work to be done to make sure companies are GDPR-compliant.
Industry observers are wary of a consumer backlash should every adtech company individually have to ask for consent to track, profile and analyse an internet user, as many consumers are unaware of how such adtech outfits play a role in the monetisation of online media.
Some fear that a mass consumer opt-out under the new proposals could have a knock-on effect on publishers that often rely on these ad networks to sell their inventory.
David Reed, director of research and editor-in-chief at online data expert community DataIQ, said: “For online publishers, ad networks and the whole adtech industry, the party is over, and they now have to deal with a major hangover."
Advertiser trade body ISBA has said the GDPR regulations are "overly complex and onerous" and will cause a "huge amount of headache and a great deal of cost to businesses in Europe", but it was confident a majority of consumers would opt-in to the new terms.
Mark Finney, ISBA's director of media and advertising, said: "I suspect most publishers will find innovative ways to minimise the impact of the new rules and most users will take it all in their stride. Online users are used to scrolling (at speed) through long lists of terms and conditions and clicking 'agree' without reading any of them. It will cause some worry to some, and a small minority will refuse to opt-in, but these people who are especially protective of their online privacy are probably already using ad-blocking software in any case."
Lucas Brown, Total Media, chief strategy officer, argued that the new rules present a “big opportunity” in encouraging people to embrace the “right type of advertising”, which is a balance of being useful and tailored without being intrusive.
“Consumers don’t want an Orwellian-style ad showing how much a company knows about you, but they may well want more information on their favourite brands. It’ll be interesting to see the different ways brands engage with customers in an opt-in world,” he added. “If we can demonstrate the value exchange from sharing data, people will opt-in.”
The EU’s executive arm will also tighten its regulatory grip over services such as WhatsApp and Skype as part of a separate sweeping overhaul of the block’s ePrivacy Directive (its first since 2009), which dictates everything from online tracking to marketing emails.
Also in the proposals was a tightening of how “over-the-top” services - those which provide users with the ability to deliver text, voice and video calls over the internet - are regulated. It is thought this will include a restrictions on how the likes of Whatsapp and Skype collect and use first party data, such as a phone’s location.