EU Has its Finger on the Internet Privacy Button

In case it has escaped anyone's attention, the European Union is dangling the online advertising industry outside a window and threatening to drop it on its head over the issue of privacy (ClickZ, 11-06-09; Ad Age, 11-05-09.)

Incited by bad behavior at Phorm and BT, which evidently collaborated on unannounced ad targeting tests relying on the more detailed user data available through BT's ISP business (not very helpful), the EU is taking legal action against the UK in order to compel it to impose tougher privacy standards. In the meantime, the EU is advancing legislation through its parliament that amounts to an opt-in requirement for all tracking cookies, which are the things that make the world go around for advertisers and publishers online. If the EU succeeds with that legislation the world will end at the English Channel and European web publishers will find it hard to attract the advertising that is important to sustaining their web sites.

That should be a matter of some concern to the EU parliament. Are not the voices of probably hundreds of thousands of European web publishers meaningful to the debate? Not all of those publishers - perhaps very few of them - are in it to make beaucoup amounts of money. But the money doesn't hurt when there are provider bills to pay, and family objections to overcome that result from many hours at the computer composing thoughtful web sites and blogs. An evening or two out for dinner, a new automobile, a school tuition paid, always help to quell dissent among an artist's inner circle of dependents and care-givers.

Never mind the taxes and the votes that go missing when commerce is affected. We recognize this is the EU we're talking about and that taxes and votes might not be the drivers they are in the rest of the Western world. Still, there is the matter of the artistic freedom and the ability of a huge segment of the Internet's publishing fabric to survive that should be considered. What will happen to all those voices? How will Europe be represented in a post-apocalyptic, post-cookie world of its own making? What of our Global Village, which benefits from so many connections online and seems especially relevant to the very notion of a "European Union" in the world?

Online advertising in the U.S. is targeted to the U.S. and it represents most of the advertising in the world. If the EU goes dark online tomorrow many global marketers will be affected, but in those EU places only. North American web publishers will prosper. Global web providers such as Google and Yahoo! will be inconvenienced, but they can choose over the years whether to pass or play in the EU depending on whether they can make a living.

The fastest growing markets in the world are in the east. So far, China is not proposing to choke web publishers in that part of the world with draconian privacy measures. It has different problems, the solutions to which - involving more publishing freedom - work towards a positive future for marketers and publishers. Not so EU policies, which work against the future of publishers.

It may come to pass, therefore, that web publishers in three-quarters of the world will eventually speak for all of it, including the one quarter left out in Europe. Any government's instinct to protect its people is understandable and desirable - including on the matter of Internet privacy - but the EU should carefully consider the extent to which such uncompromising privacy legislation will deprive its constituents of a voice in the New Information era by depriving its enablers, the web publishers, the commercial means to make it heard.

 

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Comments

[John Wunderlich]

This is the old refrain that what is good for business is good for everyone. That's not only false on the face of it, it's particularly ingenuous in the context of this particular issue. There was a recent survey published, based on a survey in the US, not the EU, that clearly demonstrates that American consumer do not want targeted or behavioral advertising(link below). In the context of the survey, one can reasonably infer from this that Americans do not want web sites, or the organizations behind the web sites, implementing the technology that enables them to be tracked for the purposes of targeted ads - cookies.

The world may be a better place if most web marketing companies fail. I believe that's called competition. I understand that the advertising model is what creates revenue for many websites, particularly search engines. But maybe those websites should fail. Remember Sturgeon's Law - "90 percent of everything is crap". Given how inexpensive it is to run a web site, if the business can't sell advertising or obtain sponsorship directly, maybe they deserve to fail. For search engines, they can still identify ads to place on search results pages based on search terms and anonymous analysis of click through results. It may not be as profitable as tracking peoples' behaviour, but is does respect privacy rights and consumer desires - and isn't that respect at the heart of good business?

Survey report: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1478214

[Jarvis Coffin - Huffpost Blogger]

John:

Thanks for your comments. I am familiar with the survey you point to, and as a consumer myself I'd be inclined along with most everyone else in the survey to reject a trade-off between "targeted ads" and loss of privacy. I'm not online to see the advertising. I don't listen to radio to hear the commercials. The extent to which privacy is really lost, however, by the use of cookies is an open question in my book. As compared to other intrusions and abuses the cookie is fairly innocuous. Sadly, the online industry has done a very poor job of explaining it. But here are some thoughts I've posted on the matter elsewhere, for what it's worth: http://burstmedia.wordpress.com/2009/02/13/ftc-urges-marketers-to-self-regulate-consumer-privacy-or-else/

Otherwise, I would only point out that cookies are as useful to search engines as they are to web publishers. Everyone will suffer from universal opt-in. I'm all for Sturgeon's Law (which would certainly apply to television), but doesn't it makes the 10% especially worth saving? Online, that could equate to thousands of independent web publishers that, by-in-large, are principally responsible for the mosaic we call the world wide web.

Thanks for your inputs.

Jarvis.

[Aaror]

I don't get it.
I already have an opt-in for tracking cookies, my browser deletes cookies when it closes, and only keeps the ones I like.
When I have to use the primitive browser (Internet explorer) I just delete it's cookies after I browse.
How is the EU putting this in place for all computers instead of just computers of intelligent people going to destroy EU ISPs?

[GarryLad]

Burst Media, Long Tail etc. is behind these warning words. Its pecuniary position might be affected by this rule unless this outfit decides to clean up its act and chooses to behave with some decency.

I find it most peculiar that an American business entity argues that it must be protected from right bearing citizens in the EU. RIAA, another American business entity has consistently branded consumers as Pirates when these ordinary people practice precisely what Burst wishes to continue.

I suggest that what is good for a Burst Goose Pirate is also good for an ordinary