Surveillance capitalism’s days are numbered, but it will not be easy or quiet
Targeted digital advertising has been paying the internet bills for years, keeping products and services free for everyone. However, personalized ads and the data collection processes they require are now in the crosshairs of regulators in prominent jurisdictions. It’s a big problem for Big Tech. But some companies suffer more than others.
Meta is probably the worst off. The European Data Protection Board has ruled that there is no legal basis for how the owner of Facebook collects and uses data for ad targeting.
Under the GDPR, companies need a formal basis for collecting and processing user data. Facebook argued that the data collected was necessary to fulfill the contractual agreement with its users. The answer of the European Data Protection Board: no dice. As a result, Facebook now has three months to figure out how to comply with the GDPR — or contest the ruling on what it will do.
This is not a one-off mistake, like the Cambridge Analytica scandal. Nor is it a dangerous lack of trust and security such as Facebook has guided in Myanmar. It’s an existential challenge to Meta’s ad revenue.
Other tech companies have taken note and are trying to stay ahead of the curve. TikTok is on a charm offensive in the EU.
Things get messier before they get clearer
Last week Chief Executive Shou Zi Chew was in Brussels telling everyone that the Chinese app would comply with EU rules on privacy, freedom of expression and child safety. TikTok is in the firing line due to its massive growth and US concerns over aggressive data collection and monitoring.
Google has been seeing the writing on the wall for some time. It has provided ample cover with a series of announcements about its “privacy sandbox.”
These are a handful of initiatives aimed at keeping the advertising business alive without the need to use third-party cookies to track users across the web. But the nature of these initiatives has changed a few times since Google has tested them with advertisers. Also, the UK’s Competition and Markets Authority and a number of US Attorneys General have questioned how this privacy sandbox will affect users and publishers, and whether it will make Google even more dominant in digital advertising.
But does Big Tech’s increased scrutiny mean an opportunity for other advertisers? Or do privacy-related changes mean a further reduction in advertising revenue? Scaling remains the problem for publishers who lack the reach of the platforms.
In some markets, publishers are teaming up to collect their own first-party data. In Switzerland, the OneLog system is used by commercial publishers such as Ringier, TX Media Brands and the public broadcaster SRG SSR. They now reach a quarter of the Swiss population. Publishers in the Czech Republic and Portugal have also been using a common login for a number of years, with which they can bundle and monetize information about their readers’ browser history in an anonymised and data protection-compliant manner.
But even where media companies can successfully come together to pool resources (and audiences), they will struggle to keep up with the big tech players.
Big Tech’s surveillance capitalism machinery will be dismantled in the long term and rebuilt with less ability to undermine autonomy and democracy. But in the near term, we can expect ongoing skirmishes between big tech and regulators. Things get messier before they get clearer.
Why? Because cleaning up the Wild West of targeted advertising is a messy business. Different business models for different apps and services mean there is no one-size-fits-all approach to applying regulations.
The fact that different jurisdictions have different laws – or in some cases none at all – makes the situation even more obscure. Various state legislatures in the United States pass specific laws on technical regulations, language laws or data protection laws or child protection laws. In Europe, there is a more centralized approach – but there are still some problems. There is a crush between different organizations.
Big Tech will be an advocate before it collapses
For example, the Irish Data Protection Commission and the European Data Protection Board do not always agree. Added to this is the friction between neighboring legislation. Will Brussels assert more authority over the Digital Services Act? Or will the GDPR, which places primary authority in the country of establishment, prevail?
But the biggest obstacle is the money behind the status quo. Media buyers will continue to use Big Tech’s powerful advertising tools.
Big Tech will make small changes to limit targeting in certain areas – just enough to keep regulators at bay. Last year, Facebook/Meta announced that it would restrict how advertisers can target under-18s.
Also, the lobbying power of the biggest digital advertisers means they’ll be riding the gravy train of targeted advertising for as long as possible. Big Tech will be an advocate before it collapses.
https://www.independent.ie/business/technology/the-days-of-surveillance-capitalism-are-numbered-but-it-wont-go-easily-or-quietly-42297484.html Surveillance capitalism’s days are numbered, but it will not be easy or quiet