Online retail is increasingly dependent on information on users'
browsing habits and demographic information gathered from them.
Consumer Commissioner Meglena Kuneva has created a new industry
body that she wants to address the privacy and consumer protection
problems faced by the users of online retail services.
"10% of European advertisers used [behavioural targeting] in
2007," she said in a speech last week. "Only one year later, it had
already reached 28%. And almost 60% of advertisers said they wanted
to use it this year."
"This development has an increasingly significant impact on
consumers, who are genuinely concerned about the use of their
private data. Our research shows that even the most confident
internet users, who are usually those aged between 15 and 25, are
convinced that their personal data is being used without their
knowledge," she said.
"If cloud computing and location-based services become pervasive
– as they seem destined to be – the sources and amount of data
collected and stored in remote places will multiply. We must
therefore ensure that consumers are properly protected in this
ever-changing environment," said Kuneva.
She has created the Stakeholder Forum on Fair Data Collection, a
collection of businesses who will have to outline their plans for
protecting consumers' information.
"The time has also come to continue with our discussions in a
more structured way," said Kuneva. "In this forum, publishers,
advertisers, ad-networks, and other business representatives will
shortly be invited to outline their plans and to address pertinent
issues with the European Commission and other key stakeholders,
such as consumer organisations."
"This occasion will also allow us to jointly assess the
perceived risks to consumers and consider how best to address
them," she said.
The Forum is scheduled to meet three times next year, with the
first meeting taking place in February. According to the Commission
it will discuss the use of incomprehensible privacy policies;
misleading and aggressive personal data collection methods; the
breaking of existing rules on data collection; the best way to
obtain informed consent for data collection; how to allow consumers
to see what information is held on them; and whether or not
consumers are told enough about the collection of data and use of
it to profile them.
Behavioural advertising involves tracking somebody's internet
use across a number of sites, attempting to divine from that
information what adverts it would be most effective to show them
and then showing them those ads.
It is already coming under increased scrutiny in the UK.
Consumer protection regulator the Office of Fair Trading said last
month that it will investigate whether behavioural advertising and
the targeting of services at certain kinds of people – such as
people living in certain areas but not others – breaks the laws on
consumer rights.
A group of MPs and Lords recently called for the outlawing of
gathering the information necessary for behavioural advertising
without an internet user's explicit consent.
Kuneva said that the Commission has been investigating the
issues of behavioural targeting and unfair commercial practices,
and that it has been attempting to change companies' behaviour.
"We followed up [round-table] meetings with bilateral talks with
numerous stakeholders. We asked consumer organisations and privacy
experts about their concerns; we asked businesses about the
reliance on data of their business models; and we asked academics
about probable future developments in the market," said Kuneva.
"We consulted internet publishers and advertisers, ad-networks
and data solution providers, browser manufacturers, regulators and
self-regulatory organisations – both in the EU and in the US," she
said. "Most stakeholders would also agree on the need for readable
privacy notices and terms and conditions which are free from unfair
terms."
Kuneva said that consumers deserve to be told whenever an ad
they are seeing is chosen because of monitoring of their browsing
and should have easy access to the information on which that
ad-serving is based.
"Stakeholders should agree on better consumer information when
profiles are used. In essence, consumers should be informed that
ads are based on their profile," she said. "I hope we can also
agree on the need to give consumers access to the ad segments they
are in, and the right to change them if they wish."
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