French and German SMEs oppose tracking-based ads, survey finds

69% of the surveyed business owners said that they had no other option but to advertise with Facebook and Google due to their dominance on the market, and 79% of respondents said that the two tech giants should face tougher regulation on their use of personal data. [Shutterstock/PixieMe]

Ahead of a crucial EU parliamentary vote on the Digital Services Act, a survey has found that a majority of small businesses in France and Germany want alternatives to tracking-based advertisements by Google and Facebook, which they perceive as being too invasive.

Around 75% of Small and Medium-sized Enterprises (SMEs) say the tracking-based advertisement used by Google and Facebook is undermining users’ privacy and human rights, a YouGov survey published on Monday (17 January) has found.

“The constant and invasive monitoring of our lives to target people with ads is unacceptable, annihilates our right to privacy, and fuels discrimination,” said Claudia Prettner, a legal and policy adviser at Amnesty International, which commissioned the survey alongside Global Witness, another NGO.

“These results show that business owners are extremely uncomfortable with the approach to tracking-based advertising that their customers currently experience,” she added.

However, businesses suffer from a lack of alternatives. 69% of the surveyed business owners said they had no other option but to advertise with Facebook and Google due to their dominance on the market, and 79% of respondents said that the two tech giants should face tougher regulation on their use of personal data.

French MPs call for more transparency, press unity in battle against digital giants

There is a need to put a stop to the information gap between the media and digital platforms, and encourage publishers to join forces to improve negotiations with digital platforms, French MPs concluded in a report presented on Wednesday.

DSA and targeted ads

The survey was published just ahead of an EU Parliament vote on the Digital Services Act (DSA), which is scheduled for this week.

The European Parliament is divided on how targeted advertising should be handled in the DSA, Europe’s flagship regulation to introduce transparency obligations and clear responsibilities in the digital sphere.

While a number of left-wing MEPs pushed for a total ban of targeted advertising in the Parliament’s internal market committee (IMCO), the report voted by IMCO only included a ban for minors, due to opposition of other members in the committee.

However, the issue is likely to resurface during the plenary vote this week where several amendments were tabled, ranging from a total ban to provisions on how to obtain consent for data processing in an informed and fair fashion.

“This week’s plenary vote on the Digital Services Act represents a vital opportunity for MEPs to stand up for human rights, and to take action to address advertising practices that rely on intrusive surveillance,” said Prettner from Amnesty International.

Civil Society groups and business representatives have already tried to sway MEPs ahead of the vote in an open letter published last week.

The letter, signed by 17 civil society groups and 14 business CEOs, urged MEPs to support the amendments beyond the existing IMCO compromise to “rule out surveillance practices in digital advertising,” the letter reads.

MEPs adopt Digital Services Act in a key committee vote

EU lawmakers reached an agreement on the EU rulebook for digital content and services, formalised by the adoption in the leading parliamentary committee.

Google and Facebook’s targeted ads

Google and Facebook have long been claiming that the use of tracking-based advertisement benefit SMEs and create a level playing field.

Ever since the DSA was tabled in December 2020, the two companies have been lobbying hard to ensure that their ads-based business models are not undermined by the new regulation.

According to Global Witness, the two companies have been using small businesses as a “fig leaf to justify their invasive profiling and targeting of users for advertising”.

“Given the overwhelming support from small business to regulate ad tech giants, there is every reason for MEPs to go further in the Digital Services Act and protect individuals from surveillance advertising,” said Nienke Palstra, a senior campaigner at Global Witness.

However, EU Competition Commissioner Margrethe Vestager argued in early September that a ban on targeted ads would have negative repercussions on small businesses, as it is very important for them to “find their potential customers,” she said, adding that it is “legitimate to advertise.”

DSA: MEPs near agreement on targeted ads, recommender system, marketplace liability

The main political groups of the European Parliament could soon agree on key points of the proposal to regulate online services, according to the latest compromise amendments seen by EURACTIV. Still, discussions may not meet the December deadline.

[Edited by Luca Bertuzzi and Frédéric Simon]

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