EU threatens new online privacy regulation 

"The current situation with regard to privacy, profiling and targeting is not satisfactory," EU Consumers Commissioner Meglena Kuneva said yesterday (31 March) during a roundtable on online data protection in Brussels. "If we fail to see an adequate response to consumers' concerns, as a regulator we will not shy away from our duties," she added.

The commissioner pointed to three main causes of concern, which in her view are turning the World Wide Web into the "World Wild West": potential breaches of privacy rules, the use of 'pressure' advertising and commercial discrimination.

As for breaches of privacy policy, Kuneva pointed the finger at the widespread practice of collecting information about the activities and interests of Web users. 

Following in the footsteps of Google, the pioneer and most sophisticated user of the technique, many online businesses track consumers and develop detailed electronic profiles to present surfers with targeted adverts, boosting their chances of successfully turning the Internet user into a buyer. 

Google is now able to track Internet users not only as a result of their queries on its search engine, but also according to which websites they have visited (so-called 'behavioural tracking/targeting'), thanks to the widespread presence of its AdSense program. 

"Behavioural targeting on the Internet will become increasingly pervasive, and consumers understandably feel uncomfortable. The status quo is not an option," said Kuneva.

"Google is committed to protecting the privacy of its users through the services we offer. We recently announced the launch of interest-based advertising, which gives users transparency, choice and control over the ads they will see," replied a Google spokesperson in a statement.

The commissioner is also concerned about possible malicious uses of electronic profiles built up by online companies. "Can the knowledge of some of your personal circumstances, say your financial status or your health condition, ever translate into 'pressure'? Assume for a second you receive an unsolicited message that your cholesterol is up, alongside a recommended treatment. Is this help or pressure? What if the message is about your weight? Is it enough to signal the commercial nature of the message?," Kuneva wondered during the conference.

Commercial discrimination occurs when companies unfairly discriminate between receivers of potential ads. "Personal and behavioural information can reveal how much you are actually willing to pay for a service. It can reveal the risks you are likely to incur, be it in late payments, illnesses, or even the likelihood you will return the goods you buy," Kuneva warned, underlining that such personal information could be used "to extract the maximum price possible from you, or to block your access to some services altogether".

As consumer commissioner, Kuneva clearly has an interest in adopting a hard line towards online advertising, but not everybody in the Commission thinks the way. Internal Market Commissioner Charlie McCreevy, who is in charge of e-Commerce, would rather encourage targeted advertising as a means of increasing online shopping.

Enforcing data protection is a national competence, but the Commission has quietly tried to make its voice heard via Justice and Home Affairs Commissioner Jacques Barrot and Information Society Commissioner Viviane Reding. Barrot recently announced the launch of a public consultation to review data protection rules (EurActiv 29/01/09), but raised eyebrows by setting up an expert group on the issue, composed almost exclusively of private sector representatives. Data protection activists had a minimal presence. The group was later shut down by the Commission.

Last year, Competition Commissioner Neelie Kroes failed to grasp the EU's only genuine opportunity to impact upon the online advertising market. 

Kroes had to rule on the legality of a merger between Google and one of its main competitors, DoubleClick. Despite a fierce campaign against the merger carried out by consumer and privacy groups, she gave the operation the green light (EurActiv 12/03/08).