There’s a trade war brewing between the U.S. and Europe over the future of digital media – and Europe has fired its first shot. Interestingly, the weapon du jour in this trade war is privacy. And much like the infamous Maginot line, the tactics used in this war are very likely to be circumvented.
Europe vs. Silicon Valley
There is a growing sense of frustration in Europe regarding the dominance of American technology companies – particularly those coming out of Silicon Valley. Read the following quote from Günther Oettinger, EU Commissioner for digital economy and society: “The Americans are in the lead, they’ve got the data, the business models and so the power.”
In order to level the playing field, some EU policymakers are pushing harder than ever to impose an affirmative (opt-in) consent standard across the EU marketplace. Here’s the idea – Google, Facebook, etc. have all the data. If you impose an affirmative consent standard, you make it harder for the Internet Giants to collect data, and open the door for EU based companies to collect data. The going in assumption seems to be that EU based companies will do a better job getting EU consumers to trust them and provide their data while American companies will have a more difficult time. Hence, imposing a high privacy standard will rein in the larger American companies while giving the EU based companies a leg up. Talk about using privacy as a competitive differentiator!
Now this issue goes well beyond digital media – the marketplace for robotics, electric cars, telecommunications and the Internet of Things are all in play. A more cynical view might suggest that this effort is entirely about competition. I honestly don’t believe that is the case here. There are many folks within the EU who earnestly believe that this initiative is about protecting the right of privacy.
But here’s the thing – regardless if you favor a privacy outcome or a competitive outcome, this policy is unlikely to further either of those goals.
Affirmative Consent is privacy “fools gold”
Requiring an opt-in for any form of data collection might appear as the gold standard for privacy. To the naked eye, it certainly looks nice and shiny. But once closely examined, a comprehensive opt-in standard loses its luster. The problem with requiring opt-in for ANY data collection is that it creates a perverse incentive to get an expansive consent for ALL data collection and use.
Here’s an example. If you require opt-in consent in order to drop an ad serving cookie, you’re basically requiring publishers to pop a consent box to web visitors that reads “we use ad serving cookies. Click here if you agree.” Fair enough. But as a business, if you’re required to ask permission anyway, you might as well ask permission for Interest-Based Advertising Cookies and the use of fingerprinting technologies. And while you’re at it, why not also get consent for the merger of all of this information with the User’s email address or telephone number so that you can get a much more thorough understanding of your Users – just like Facebook and Google. By requiring an expansive consent, you create incentives to collect as much data as possible. And you thereby limit marketplace incentives to be creative in developing non-intrusive uses of data.
Affirmative Consent Favors the Internet giants
Moreover, if the other goal of imposing an affirmative consent standard is to level the playing field between European technology companies and the Internet behemoths, the plan also falls apart. Ask yourself a question: Who is in better position to obtain consent: a small analytics firm based in the Netherlands or Google? (Hint: Google’s the one with a free email service and social networking functionality that requires some form of opt-in.)
Any small company – European or otherwise – is going to have a much more difficult time obtaining consent under an opt-in regime. Conversely, Google, Facebook, etc. have so many direct consumer touch points that they will simply present users with a privacy screen that – studies have shown – many users will simply quickly click through regardless of the privacy impact.
So the net outcome of this policy is MORE data collection by FEWER companies. If European policymakers want to attempt to level the competitive landscape – so be it. Respectfully, I hope they have a plan B.
Alan Chapell is an attorney, industry analyst and certified information privacy professional focusing on digital advertising and privacy. Follow Alan (@chapell68) on Twitter.