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The End to Data as We Know It?

EU proposes new legislation to protect user privacy

January 11, 2017 | Retail & Ecommerce

It's going to get a lot more difficult for internet companies to track users and deliver more targeted advertising if new privacy rules from the European Union pass.

Desktop Ad Blocking User Penetration in North America and Select Countries in Western Europe, Q2 2016 (% of internet users)

One of the proposals put forward by the European Commission is to streamline cookies. The new rules would give users more control over their settings, and users would be able to accept or refuse the tracking of cookies, as well as other identifiers. The proposal is designed to protect personal data.

Widespread adoption of mobile devices has already made it difficult to understand consumers' digital behavior as they move from desktop to mobile because the cookies that were relied upon for tracking behavior in desktop browsers are limited in mobile browsers.

And native apps—where mobile users spend the bulk of their time—leverage unique IDs that are difficult to tie together with cookie data.

"While advancements have been made to marry all the digital IDs in use, the commission's moves to require opt-ins from every web browser and app for ad tracking will diminish the volume of data available to media sellers and buyers for ad targeting," said eMarketer principal analyst Cathy Boyle.

Data of this nature commands a high price as it allows advertisers to target messages to users who have exhibited behaviors or characteristics that align with their campaign goals.

Any steps that have the potential to limit the volume of this data, including the commission's proposal—and Apple's ad tracking opt-out option in iOS 10—is likely to impact the bottom line of all media sellers, as well as the lucrative cottage industry of data management firms that the digital advertising industry has spawned, Boyle said.

Stricter rules on cookies are just one part of the proposal. According to the EU, more than nine in 10 Europeans said it's important that their emails and online messages remain private. Existing privacy rules only apply to telecom providers. But the new proposal aims to extend that to other services, including iMessage, Facebook Messenger, Skype, Gmail and WhatsApp.

Privacy will be "guaranteed for both content and metadata derived from electronic communications," the EU states. Therefore, if a user doesn't give their consent, it would have to be anonymized or deleted.

The goal of the EU is to give the user control of their own privacy. That is a concern worldwide, including in the US where many users are taking steps to ensure their privacy.

For example, data from adjust, a mobile attribution and analytics company, found that one in five iOS devices in the US have enabled the OS' "limit ad tracking" feature.

Many people are also turning to ad blockers. Research from the Interactive Advertising Bureau (IAB) found that more than a quarter of US internet users claim they have used an ad blocker on their desktop or laptop.

—Rimma Kats

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