Technology giants Google, Facebook, Amazon and Microsoft have gone to war on the EU’s overhaul of online privacy laws by demanding a major rethink, amid dire warnings that the proposals will also wreak havoc in the online advertising industry.
Lobby group the Centre for Information Policy Leadership – which represents all the major US tech giants – claims the proposed ePrivacy Regulation’s “over-reliance on consent and its broad scope will undermine the GDPR, as well as legitimate, processing of data and business practices within the Digital Single Market”.
Among its demands are a rethink of consent, which in its current form would force consumers to agree for their data to be used at a “device level”, which would then apply to all websites and apps used.
It also wants the obligation to remind users of the possibility of withdrawal of consent every six months – a requirement not found in the GDPR – to be scrapped.
In addition, it claims that a “significant shortcoming of the proposal is that it does not provide for legitimate interest as a ground for processing in line with GDPR”.
When it comes to unsolicited communications, the group wants the Regulation to be “more specific to ensure that it only applies to unwanted communication such as spam, phishing and other malicious communication”.
It argues that there should be “flexibility to allow start-ups and new market entrants to promote their products and services, in both B2B and B2C contexts. Indeed, customer acquisition activities, which in many cases are unsolicited in nature, are essential for gaining and sustaining business relationships also for existing companies”.
Meanwhile, a new study commissioned by the online ad industry has warned that “device-level” consent could wipe out up to half of the €526bn (£470bn) market and threaten up to 6 million jobs.
The study, funded by the European Interactive Digital Advertising Alliance (EDAA) and the Interactive Advertising Bureau Europe (IAB Europe), argues that the Regulation could have “serious and unintended consequences”.
The analysis reveals that 66% of current digital advertising spend depends on data, and that the use of data drives 90% of annual growth in the digital advertising market.
Data-driven advertising is over 500% more effective than advertising without data and is crucial for providing advertisers with transparency on who sees their ads. Because of this, advertisers will slash their investment in digital advertising if data can no longer be used, the report claims.
In a survey of 11,000 Internet users in 11 EU countries to support the study, the market research company GfK found that only 30% of Europeans are prepared to pay for content to replace digital advertising revenues, and the average amount they are prepared to pay (€3.8 per month) is far below the amount that news sites need to fund their journalism.
IAB Europe chief executive Townsend Feehan said: “These findings should give MEPs very significant cause for concern as they consider the proposed ePrivacy Regulation.
“The alternative to data-driven advertising isn’t just less targeted advertising – it’s a digital ad industry half the size that it is today. That has huge consequences for Europeans’ experience of the Internet, for the EU economy and for the existence of a free and balanced media.
“The latest research shows that the appetite for paying for online content simply doesn’t exist to a viable degree amongst EU citizens. Ignoring this fact is a recipe for economic, social and political disaster.”
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