MEPs are irritated by online ads

The European Parliament is preparing a vote on new regulations for digital services. Restricting online targeted advertising is also part of this megalomaniac regulatory package. This is an ad that is shown to specific people based on what websites they visit and their demographic characteristics. Well, some MEPs don't like this type of ad and they want to restrict, regulate or even ban it. All in the name of fighting for the right to privacy. Where is the problem?

The first one is that it is an old outdated song. Very recently - in 2018 - a major regulatory storm came into force, which became known as the GDPR. What critics have predicted happened to this regulation. It has had many unintended consequences, such as some foreign services becoming inaccessible to European consumers. The people who were supposed to get help are just getting annoyed by this regulation when they click on pop-up notifications and alerts on every website, quite thoughtlessly and mechanically. And the creators of this regulation are already calling for it to be updated, because progress (without permission) in digital services somehow refuses to stop innovating, unlike static regulations.

The second problem is that there is no objective "right" amount of privacy. The EU's efforts to determine the "right" level of privacy for different people and across different spheres of their lives are doomed to create winners and losers and a number of unintended consequences. For example, protecting the information that I am a man under the age of 35 looking at a range of hammer drills is of no value to me. If I can "pay" with this information, for example, for using the free Instagram service or Google Maps, then this is a great deal for me. And as a bonus, I will see ads for men's tools instead of laser epilators.

However, there are areas where I deal with privacy and where it is important for me to maintain its high level. And here I can decide to use a wide variety of different solutions. From those as simple as entering the Apple ecosystem to more complex ones as using encrypted applications, VPN services or even entering the world of anonymous cryptocurrencies.

However, the truth is that many people are not interested in their privacy in many areas. Economists have even tried to estimate how much people are willing to pay for their online privacy. In one study, they gave people a choice between paid use (of currently free services) that would not collect information about them and the current situation. And they found that 86% of Google Search users were unwilling to pay anything (they would rather pay with their privacy) and the remaining 14% would be willing to pay only a few cents a day.

The current state of Internet companies, which offer free services in exchange for personal data, thus only reflects the preferences of Internet users. However, this would cease to apply in a world where some MEPs' ideas about targeted advertising have been executed. In such a world, Internet companies would have to look for new ways to fund the many free services we use every day. For example, by charging them. But not only that. To some extent, many of your favorite content creators live on targeted online ads. They too would have to start looking for new ways of survival or quit.

A number of smaller and starting entrepreneurs would also have a problem. Cheap and effective targeted ads have just helped them compete with larger players who have never had a problem buying expensive ads, for example on television. Targeted ads have also helped create entirely new, specific markets that would be difficult to exist without. Only with targeted ads is it possible to create a campaign that reaches a very specific group, such as women under 25 from the capital with an interest in Japanese cartoons or Fortnite players.

And not only the business but also the non-profit and civic sectors would suffer. For example, imagine that you have a project to improve economic literacy and you want advertising to reach young people who are in the second half of high school and their teachers. We don't have to imagine it, because we have such a project and targeted advertisements have helped us to raise awareness of the Economics Olympics without annoying the majority of the Slovak population with this advertisement for a lot of money.

Finally, a key question needs to be asked: what is the worst thing that could happen with the unrestricted operation of targeted advertising? People exchange more relevant ads supported by personal data for free services and business owners find their customers more efficiently and find what they are looking for more easily. No problem in the market. Only the European Parliament seems to have a problem.

.týždeň, 8.12.2021