Proposed ePrivacy regulation create problems for programmatic advertising

2017/02/02

“Do we have prior consent for all of our cookies? Can we document this to authorities upon request? Can users withdraw their consent at any time throughout our network?”  These will probably be some of the main questions for all data controllers in online advertising (yes, this probably includes you) by May 2018 if the EU’s latest ePrivacy regulation is adopted. The wrong answer could lead to fines of up to 2-4 per cent of your global annual revenue.

The proposed new regulation presented by the European Commission is supposed to replace the current Cookie directive by the same time the General Data Protection Regulation (GDPR) takes effect. Even though they are related, there are important differences and, unless the proposal is changed, it could prove to be a major problem for all who are working with digital, and especially programmatic, advertising.

We asked Allan Sørensen, Board Member in IAB Europe and Chair of their Policy Committee, to explain some of the details. Watch the short video intro were Allan explains  the problems with the proposal? And read below more..

IAB Europe stated in a press release that the proposal fails. Exactly what is the problem?

“The main problem is that it imposes a set of rules which makes the current way of conducting data driven advertising almost impossible. The consequences could be devastating for the entire advertising industry. Especially third parties will have a hard time complying, but the regulation will decrease the quality and value of the data for the entire ecosystem, which will harm not only advertisers, agencies and publishers but also users.”

What exactly will the difference be compared to now?

“Even though the existing cookie directive already calls for prior consent for the use of cookies, the rule was never enforced. The industry asked for the directive to be repealed because it is harmful to innovation, useless for privacy protection and redundant since we just adopted the GDPR, which will regulate all personal data and has a very broad definition of what that is. Unfortunately, that did not happen. Instead, the regulation of data usage will become a lot stricter. There is to be no data processing without prior consent – personal data or not. And, this time, the rules will be enforced and fines are the same possible proportions as in the GDPR, which is 2-4 per cent of annual turnover.”

What is the problem for publishers? Can’t the users just click OK to give consent?

“The data collection as well as processing on publisher websites are complex and often involve hundreds of stakeholders in a highly dynamic environment. Even though the publisher can ask the user for consent, the value of the ad inventory is very much dependent on advertisers and intermediaries having access to the same information. Handling prior consent in a strict sense as it is defined in the proposal can prove a costly and complicated task.

On top of this, it is a major annoyance for users to have relate to an unmanageable lot of information and give their consent before they can gain access to any information. Everybody hates cookie-banners today, but imagine that you would be completely blocked from access until you have consented. Traffic would take a serious drop on all websites.”

When will the ePrivacy regulation be approved?

“The next step will be for the European Parliament to review the Commission’s proposal. They usually come up with lots of amendments that they need to agree on and the process takes months and sometimes even years depending on complexity and how far apart the political opinions are on the matter (and how effective lobbyists are). Then, the dossier goes to the Council; it also needs to agree on any possible amendments. More negotiations. And after all of that, all three parties must agree on a final text. The Commission hopes all of this will be possible before Christmas, so the regulation can come into effect by May of next year. I think it might be a while longer.”

What can publishers do to avoid this?

“All European publisher organisations, including IAB Europe, will work hard to get the EU-bodies to understand the problems in the regulation and suggest possible improvements. The best way to support this is to tell your local politicians, Data Protection Authorities and national members of the European Parliament about the need for seamless data driven advertising, to support us in our work, participate in our events and give us lots of input.
We are working closely with our members from the media and advertising industry, such as Relevant, to obtain input directly from the affected companies. We hope that, together, we can improve the proposal in a way that will allow for advertising to continue supporting free content and services to all internet users.”

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