Self Regulation and the EU Cookie Law

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Self Regulation and the EU Cookie Law

Self regulation is set to become the key battleground as the digital industry seeks to make sense of the EU’s revised ePrivacy Directive. The updated Directive, effective from May, addresses how web users are tracked online and will require technology companies and other digital suppliers that record information to seek consent from web users in order to do so.

At the forefront of the EU’s attention are behaviourally targeted ads, those typically served by companies who use previous consumer browser behaviour to place contextual banners on websites. These are considered one of the most visible manifestations of how cookies track and record browser interactions and therefore have been the source of most scrutiny.

In response the Internet Advertising Bureau (IAB) Europe this month launched a pan-European, self-regulatory framework for online behavioural advertising designed to enhance transparency and consumer control. Central to the self regulatory initiative is an icon that will appear in all banner ads. By clicking on the icon consumers will be directed to Your Online Choices where they can find out more information about how their browser history is stored and used by marketers. The site also gives consumers the ability to opt out from being retargeted in the future. Whether this framework will appease Europe is unclear but there is no doubt it’s an important step in the right direction for the area of online that is under most scrutiny. The rest of the digital world will be looking to behavioural marketers to see how successful the rollout is.

It is the conundrum of how to offer consumer empowerment without significantly harming day to day internet navigation that the industry has been grappling with. The situation wasn’t helped when the Information Commissioner Chris Graham stated on Radio 4’s Today programme in March that “explicit consent” was required for cookies, differing from the concept of “informed consent” that was the assumed goal. The implications of such an approach could in theory require frequent and interruptive opt in messaging, something few of us (least of all consumers) would probably want. Graham’s “explicit consent” comment was widely reported, attracting a raft of alarmist press headlines. There has been a subsequent softening of the line indicating the industry is still right in its pursuit of “informed consent” but what this will look like is still unclear. The digital industry is awaiting further clarification from the Information Commissioner’s Office (ICO), due at some point in April.

What could additional technology solutions look like? There has been little tangible evidence to date that browser companies are facilitating additional settings to allow for this “informed” approach. In theory they could be the lynchpin to addressing Europe’s privacy concerns. Offering “in browser” guidance or the ability for consumers to find out how and why cookies are being stored (not to mention how they make navigation of the Internet easier) are still solutions that could go some or all of the way to appeasing the EU.

There are additional areas still to be clarified. The revised law states the storing of cookies requires consent. But there is an exception: where the use of cookies is "strictly necessary" for the provision of a service "explicitly requested" by the user. This could for example relate to consumers adding products to the basket and the site remembering what is in the basket. The definition of “strictly necessary” lacks prescription, for example, would it cover users of cashback or loyalty sites who need cookies enabled for their purchases to trigger the reward mechanism? There is still much work to do. Fortunately the UK Government is broadly supportive of EU-wide initiatives by the digital marketing industry to develop good practice principles. The IAB believes the UK Government will state in due course that the behavioural advertising framework addresses one of the uses of cookies of most concern to users.

It is also likely there will be additional time to ensure proper and thorough plans can be developed. Indeed the Communications Minister Ed Vaizey stated in March “it will take time for meaningful solutions to be developed, evaluated and rolled out” and it was unlikely the ICO would take “enforcement action” in the short term against businesses and organisations working to develop these solutions.

View this article on Retail Technology

May 2011

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