Online Privacy Concerns Spread To Europe

The controversy surrounding a potential online privacy bill which attempts to partially regulate the use of behavioral targeting has not yet abated in the U.S. and it is now spreading to Europe.

A few days ago, the Office of Fair Trading (OFT) in London published a market study of behavioral advertising, saying that “more could be done to provide consumers with better information about how personal information is collected and used.” While the OFT admitted industry self-regulation “addresses some concerns,” it did not rule out additional regulation as a solution.

In the U.K., under laws enforced by the Information Commissioner’s Office (ICO), it is a legal requirement for firms to clearly inform consumers about the purposes of storing a cookie or other tracking system on the user’s computer and to provide people with the opportunity to opt out. But the OFT may want to strengthen this by applying the Consumer Protection from Unfair Trading Regulations 2008, which could prevent consumers from being misled about the collection of information, including online information.

The OFT is also concerned about what it calls “targeted pricing practices,” or online targeting of pricing based on previous purchases, browsing behavior, or geographic location. The OFT says consumers who knew that targeted prices were being applied changed their behavior, so failure to inform consumers about the practice would trigger possible enforcement action by the OFT. The OFT claims “research suggests that consumer opposition to such practices would be very strong.”

In effect, the ICO and OFT could possibly collaborate to provide tougher regulation of behavioral targeting “should industry action prove ineffective.”

Heather Clayton, an OFT senior director, puts the onus on the industry to self-regulate, stating

“Discussions now about the potential for both benefits and harm, and how consumer protection legislation applies, will stand us in good stead in the event that industry action proves ineffective or targeted pricing becomes a reality.”

Seamus Reilly, Head of Information Security, Technology and Security Risk Services in the U.K. office of consulting firm Ernst & Young, saw the move as a salvo from the British government to enforce opt-out practices. He told The Wall Street Journal,

“Organizations which do not provide such transparency will increasingly find themselves under scrutiny from our data protection commissioner as customers’ awareness of this issue grows.”

So battle lines are being drawn here in the U.S., and now in Europe. Apparently, governmental regulators will continue to threaten to legislate their way through online privacy issues unless they see evidence that the industry is taking what, in their view, is effective action.

Something is bound to change soon – and it will likely mean the use of behavioral targeting will be regulated, one way or the other.

About Barry Silverstein

Barry Silverstein is a freelance writer/marketing consultant. In addition to writing for ReveNews, he is a contributing writer to Brandchannel.com, the world’s leading online branding forum. He is the author of three marketing books, The Breakaway Brand (co-author, McGraw-Hill, 2005), Business-to-Business Internet Marketing (Maximum Press, 2003) and Internet Marketing for Technology Companies (Maximum Press, 2003). Barry ran his own Internet and direct marketing agency for twenty years. You can find Barry on Twitter @bdsilv.

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Barry Silverstein is a freelance writer/marketing consultant. In addition to writing for ReveNews, he is a contributing writer to Brandchannel.com, the world’s leading online branding forum. He is the author of three marketing books, The Breakaway Brand (co-author, McGraw-Hill, 2005), Business-to-Business Internet Marketing (Maximum Press, 2003) and Internet Marketing for Technology Companies (Maximum Press, 2003). Barry ran his own Internet and direct marketing agency for twenty years. You can find Barry on Twitter @bdsilv.

One Response to Online Privacy Concerns Spread To Europe

  1. Neal lasta says:

    Hi Barry. Thanks for this great article. While privacy may be a growing concern for behavioral targeting, it will dictate mostly the implementation of more regulations, as this article points out. It will not die because of its large contributions to advertising, as more companies are using this advertising technique to widen their sales. It's appeal runs in the ability to identify users’ needs before they are fulfilled elsewhere, according to the article "Behavioral Advertising." http://behavioraltargeting.biz/behavioral-adverti….

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