As the Council seems to have (yet again) failed to adopt a general approach for the ePrivacy regulation, one question that bears asking is: would more exceptions for online tracking support online publishers or the advertising industry? Karolina Iwańska argues that here is a way to sustain online publishing and uphold privacy.
Karolina Iwańska is a Mozilla Fellow, lawyer and policy analyst at Panoptykon Foundation.
Privacy-friendly digital advertising is actually possible without bankrupting online publishers. But in order to make that happen, EU policymakers must create a regulatory push by enforcing the GDPR and adopting new rules which would incentivise the uptake of alternatives.
The online advertising industry has become toxic – not only for internet users whose privacy is notoriously violated, but also for those who it was supposed to support: online publishers.
In online advertising, the rules of the game are dictated by large online platforms and advertising intermediaries. Over the years they have promoted a win-win narrative around behavioural advertising, claiming that it is the only sustainable way to fund the web, and made sure that no alternatives can flourish.
As a result, publishers are forced to participate in the uneven race for clicks and attention, sacrificing their readers’ privacy and – increasingly – the quality of the content they produce, only to hand as much as 70% of profits over to advertising middlemen at the end of the day. Instead of the promise of thriving online publishing, the ad tech industry made publishers fight a war for survival.
Meanwhile, internet users, publishers, and regulators have conceded that this is unavoidable. That we either tolerate invasive digital advertising and its “side effects”, or else all of online publishing collapses. In effect, policymakers and data protection authorities are facing the challenge of reconciling the protection of the fundamental right to privacy with the concern that enforcement of the law would lead to depriving publishers of a key source of revenue.
Publishers themselves are often siding with the advertising industry and lobbying against privacy laws, arguing for instance that the ePrivacy regulation would be “like a bad movie” for the internet.
In reality, however, this is a false choice – there is a way to sustain online publishing and uphold privacy.
A growing body of evidence from European publishers shows that contextual advertising, which does not rely on personal data, can be more profitable for publishers and equally if not more effective for advertisers.
To cite one example: after opting for contextual advertising the Dutch public broadcaster NPO saw a 68% monthly average revenue increase compared to the corresponding period the previous year and consistent revenue increase even after the advertising market was severely hit by the Covid-19 pandemic. Ad targeting limited to insights collected directly by publishers can also be a viable alternative.
However, taking into account the current market landscape, still dominated by cross-site tracking and invasive behavioural advertising, such business decisions always come with a risk and may not be available for all publishers, especially small or local ones.
The lack of GDPR enforcement, which could serve as a powerful tool in fighting unlimited profiling and targeting, only cements publishers’ dependence on ad tech intermediaries and throttles the development of privacy-friendly alternatives. It’s a vicious circle. The failure to send a clear signal that invasive tracking is illegal prevents investment in alternative solutions.
When alternatives are not implemented at scale, gathering enough evidence to undermine the ad tech industry’s lobbying is a massive challenge. This only consolidates the market driven by the logic of more data and more personalisation.
To push the industry in a better direction and incentivise the uptake of privacy-friendly alternatives, the right regulations are not just useful – they are indispensable. If EU policymakers really care about the situation of European publishers, they should not aim towards more competition on the data market (because it will remain a losing battle for publishers) but towards shifting the power balance in the digital sphere and creating room for the development of privacy-friendly and sustainable ad models.
This is why a coherent regulatory framework should entail both a prohibition on cross-site tracking and targeting in the ePrivacy regulation, and an effective restriction of the online platforms’ power to gather and exploit data in the Digital Markets Act.
The former would end publishers’ reliance on ad tech middlemen and promote the adoption of contextual and first-party targeting, while the latter would ensure that online platforms do not dictate the rules of the game and capture most of the advertising budgets.
Only a regulatory response which treats online advertising as a system of interconnected vessels will bring about long-lasting, sustainable change in the condition of publishers and EU citizens. In this context, the failure to open trialogues for the ePrivacy regulation does not mean that all is lost – it can actually constitute a new opening for a more ambitious approach: one that would actually put internet users and publishers first.