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The UK is getting its online personal data protection wrong and it is harming businesses and consumers. New laws are being passed to conform to EU cookie regulations and existing data protection act is being ratified to ensure that the digital world is covered by data protection, but there is a long way to go.  

However, the internet is a global phenomenon so any damaging regulation for UK websites will result in users moving to overseas websites damaging our industry.

Cookies

Data protection has long been a thorny subject. Everyone wants the ability to have their private data treated as such and not spread around or used against them.  

There have been laws on data protection in the UK for a long time, but the outdated 1998 version of the law was around before most websites that you visit today. It can barely justify itself as covering online privacy.

However in the last year the EU has introduced some new cookie legislation that needed to be acted upon by each local Government. Unfortunately the Department for Business Innovation and Skills (BIS) appears to have passed the buck on this by simply copying and pasting the ruling word for word.  

BIS claims that the wording of the law is not controversial, however the various interpretations of the law by different groups begs to differ. The actual wording of the law itself seems not in the least vague:

Member States shall ensure that the storing of information, or the gaining of access to information already stored, in the terminal equipment of a subscriber or user is only allowed on condition that the subscriber or user concerned has given his or her consent, having been provided with clear and comprehensive information, in accordance with Directive 95/46/EC, inter alia about the purposes of the processing.

However the interpretation of what is seen as 'consent' is the long standing argument.  The IAB claims that simply by viewing the site with cookies enabled in your browser is good enough consent, as long as there is a privacy policy with information in it on the cookies given to you and telling you how to block them in your browser settings. However, privacy watchdogs disagree.

What is the impact of this law?

This law has many far reaching possibilities. If it is enforced every website that you visit will have to tell you if they are serving you cookies that aren't necessary.  

This will almost certainly put a nail in the coffin of online display advertising as a medium to sell goods through clickthroughs (and possibly many publishers who are losing money). Behavioural advertising will be no more. You might cheer that as a consumer, but it will just mean that you will get fewer relevant adverts.  

Moreover, websites will still try and insist on giving you cookies by asking for consent. This will add to the confusion of users who are already distrustful of how their data is being used online and annoyance to those who have to continually keep pressing buttons saying that they don't want cookies (despite how they've set up their browser settings).

More importantly, because the web is a global phenomenon, it would only affect UK websites (or at least EU websites if this gets passed in other countries). You'd be free to go and look at all the US websites you wanted to without any of these issues, whilst their advertisers are still passing you targeted adverts. That is assuming they don't watch what we're doing and think it's a good idea

You may laugh, but Hitwise tells me that at the moment 164 of the top 500 most viewed websites in this country are not UK websites. (And don't get me started on whether Facebook, Google, Yahoo, MSN, Bing, etc are UK websites, despite Hitwise claiming they are).

What is the impact of not having this law?

I can see where this law is coming from. Users don't like it when they realise that they are being tracked across the internet.

One person in my office told me this afternoon that he was looking for a coat on a popular e-commerce website only to be shown an advert for said coat half an hour later on a completely different website. "How are they doing this?" he asked me, "They shouldn't be allowed, it's an invasion of my privacy." This was from someone who was web savvy.  

Personally I like that I can have behaviourally targeted adverts at me as opposed to random ones (even if the "almost 30 and still single" ads on facebook cut a little). The real issue is that many users don't even know what is happening and the EU law is aimed at giving them more information so that they can then choose whether they like this or not.  

This law doesn't do that though, it will just add to the confusion that already surrounds cookies that is perpetuated by news outlets.

What should we do instead?

The issue clearly is a lack of understanding of how to preserve your privacy. Asking websites to give consent is clearly not a very good option. We have to improve the understanding of the general public on cookies and this is where the Government comes in:

  1. A mass awareness campaign at schools: When I was at school we had sessions of PSE (Personal and Social Education) where we learnt about unacademic things. Not all children do computer science, so this should be taught in an all encompassing option with children told about their browser security and how to alter it so that they can make their own informed decisions.
  2. The BBC should dedicate some Panorama time to cookies. It already has a very good 'Webwise' section on cookies, but I think that they need to go more mainstream. If we can get some mentions on Eastenders and other popular shows then that would be better. The BBC's mission statement is to inform, educate and entertain. If we could get ITV, C4, Five and Sky to join in it would be even better.
  3. We need to petition browsers to make their settings more transparent. Firefox and Chrome update monthly and IE9 is soon to be released. I'm sure some clever bod could come up with a solution "This website is using a cookie that was last accessed on your computer at [site] on [date]" in the yellow bar at the top of the screen wouldn't be too invasive (unless there was a lot of them).
We should be leading the class in educating our users on how to deal with the issues. The current solution will not do that.
Alec Cochrane

Published 9 November, 2010 by Alec Cochrane

Alec Cochrane is Business Consultant at Adversitement and a contributor to Econsultancy. He also blogs at whencanistop.com

5 more posts from this author

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Alec Cochrane

Alec Cochrane, Head of Optimisation at Blue Latitude

Just as an addition (I only just remembered about it!), the Web Analytics Association has a code of ethics that they want to introduce to all analysts out there and the IAB has a privacy matters microsite with lots of information for the non-technical people out there.

Cheers,

Alec

over 5 years ago

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lawrence shaw, Marketing at Sitemorse Ltd

We (Sitemorse) did some research around what sites have, are using etc - over 90% make use of persistent cookies. A significant proportion were actual 'left overs' from historic content / old taggs etc.

The issue for site mangers is content that being added - especially with more and more devolved publishing, is how to 'manage' editors and keep them up to speed with changes / laws such as this.

We have also produced a paper, covering this topic (www.cookies.sitemorse.com) - we will also offer readers 75% off a report for their site, if you are interested please contact; sales (a) Sitemorse.com / subject line 'econ cookie offer'.

over 5 years ago

Philip Buxton

Philip Buxton, Chief Marketing Officer at Exponential

The government's position we think is pretty clear. 'We'll just issue, word-for-word, the EU guidance and then wait for a test case to see what our position should be.'

Until a customer tests the rules (one retargeting/behavioural ad too many maybe) legislators are aware enough of the potential impact on the digital industry of changing anything - and scared enough of the complexity - to leave well alone.

The danger for the industry is that, in seeking to educate consumers about how online advertising works, we could just light the fuse. But, one has to think that's a danger we need to meet squarely in the face.

But, in doing so, we really shouldn't underestimate how little people know about how the web is provided. Support for the 'Keep Facebook free of advertising!' campaign and the like really shows that many have no idea the web needs paying for - let alone that cookies are what, by and large, do so.

However it develops, advertisers need to be enabled to manage their consumers' privacy settings effectively and to give those consumers options. You'll not be surprised to hear that TagMan's container tag does this.

Good piece.

over 5 years ago

Chris Matenaers

Chris Matenaers, Head of Digital Marketing & BI Systems at brightsolid Online Publishing

We do use re-targeting and behavioural advertising. We would be stupid not to and missing on a great opportunity to connect to our customers.

As an individual I hate it too and wish it to be gone.

Yes, please ban it so nobody in the EU can be using it. But then you also need to make sure that other countries are committing to the same rules.

Behavioural targeting is wrong in this fashion and way to intrusive. Huge data warehouses can be build this way and that information sold to third parties. Makes me shiver thinking about it.

You look at some porn one night, think about buying haemorrhoid treatment for your wrinkles, want to send you uncle some polio treatment and want to discourage your niece from getting an abortion. The next time you take your laptop to a meeting, your colleagues will be shocked to see the adverts coming up when you browse Amazon!

No matter what you might say to justify a different position, it is a dangerous invasion into privacy that you have little control over. Nothing would satisfy me more when all these companies have to shut their doors tomorrow.

But while it's legal, I will continue using it.

over 5 years ago

Peter Leatherland

Peter Leatherland, Online Sales Manager at Ethical Superstore

I think we need to differentiate cookies being used for behavioural targeting and cost per action advertising, this uses cookies but does not invade privacy, it is actually beneficial to the consumer as it provides an income stream for websites which provide a service to web users, without the income the sites wouldn’t be there. I really don’t like the idea of behavioural advertising and advertisers are deluding themselves when they think that consumers will like it ‘because it brings them the content they want’ when consumers realise this is what it is doing they are put off by the creepiness of it, and in some cases I would expect a negative perception of the brand is created. People don’t like the idea of being spied on, put into boxes and told what they want. Can behavioural advertising be the next big thing if so may people fundamentally dislike it?

over 5 years ago

Alec Cochrane

Alec Cochrane, Head of Optimisation at Blue Latitude

Lawrence - 90%?!?!?! What on earth are the other 10% thinking of?:P

Philip - I agree with you on this one: The Government didn't really want to have to make this decision, so they've got around it the only way by making it as ambiguous as possible until it becomes an issue again. I suppose in a way it is the right thing to do because they had to pass something to be in line with EU law and avoid being sued themselves.

The danger for the industry is that, in seeking to educate consumers about how online advertising works, we could just light the fuse. But, one has to think that's a danger we need to meet squarely in the face.

But, in doing so, we really shouldn't underestimate how little people know about how the web is provided. Support for the 'Keep Facebook free of advertising!' campaign and the like really shows that many have no idea the web needs paying for - let alone that cookies are what, by and large, do so.

I think that is something we are going to have to take a hit on.  People's ignorance isn't an excuse for the Government, they have to do something to sort it out.

Chris - the real trouble for the consumer who is uneducated on how to turn off third party cookies (to avoid behavioural advertising - although obviously this won't stop the facebook's of the world) the only option is to boycot those websites: are the advantages of the website worth the pay off of having their privacy invaded.  I think it depends on the website and website owners would stop having behavioural advertising if it affected their bottom line.

Peter - cost per action advertising is something that I didn't really cover in this article (it would have gone on forever if I'd done all the implications!), but it raises a valid point.  Without third party cookies websites looking to sell through affiliates wouldn't be able to (or would have to do it through their own internal tracking system).  This would reduce a huge number of affiliate websites and they advantages they give to users wouldn't be replaced.  Whilst behavioural advertising might not be the major part of publishers bottom line, is it enough that if we removed it many of them would no longer exist either?

over 5 years ago

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lawrence shaw, Marketing at Sitemorse Ltd

Don't know Alec.... (this figure is across UK Gov (Local and Cent.), the FTSE and the sites of the UK Top 500 retailers. Depending how you view the EU req some considerable changes are going to be needed in the way sites operate - to the extreme, if you have to confirm every that a cookies is delivered, degrade the user experience...

On the note referring to UK Gov., they don't have a very good track record on web policy impl / mangmt..... take accessibility, all sites are supposed to meet AA (yet over 95% fail this standard) lot to do around enforcement of own policies yet. http://www.sitemorse.com/survey/report.html?rt=702

Chris has a valid point - but those deploying technology will probably stay one step ahead of the policy makers, as well as having better legal support!

over 5 years ago

Avatar-blank-50x50

lawrence shaw, Marketing at Sitemorse Ltd

Don't know Alec.... (this figure is across UK Gov (Local and Cent.), the FTSE and the sites of the UK Top 500 retailers. Depending how you view the EU req some considerable changes are going to be needed in the way sites operate - to the extreme, if you have to confirm every that a cookies is delivered, degrade the user experience...

On the note referring to UK Gov., they don't have a very good track record on web policy impl / mangmt..... take accessibility, all sites are supposed to meet AA (yet over 95% fail this standard) lot to do around enforcement of own policies yet. http://www.sitemorse.com/survey/report.html?rt=702

Chris has a valid point - but those deploying technology will probably stay one step ahead of the policy makers, as well as having better legal support!

over 5 years ago

Neil Mason

Neil Mason, Director of Analytical Consulting at Foviance

I think that there is a lack of awareness amongst property owners about what's coming down the pipe and that they should be proactive now to understand their exposure to the legislation.  In our experience there is little understanding internally about what cookies are set by sites, the variety of data they collect and the period of time they are set to collect that data.  Clearly there are many unknowns in how the legislation will be implemented but if companies do not audit their use of cookies now they will be playing catch up once the EU & BIS finally get to grips with how thorough they are going to be.

In fact we’ve just started working with a couple of our clients to establish how they are going to be impacted and provide a method for them to react to the legislation with a clear strategy and to understand the possible implications for their business.

over 5 years ago

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