In Repealing Internet Privacy Laws, U.S. Splits from EU on Customer Data
After the European Commission proposed new legislation that limits companies’ ability to track customer data, the U.S. government moved to repeal federal legislation restricting the use of internet user data, signaling a split over the proper use of consumers’ information.
Online privacy has grown considerably as a global issue over the last several years, despite widespread misconceptions about how companies collect, share, and utilize customer data. And it seems like opinions on the issue differ not only from person to person, but from government to government: President Trump signed legislation repealing federal privacy protections only months after the EU proposed a strengthening of its own digital privacy laws.
The value of customer data in modern advertising practices cannot be understated — companies rely on unique sets of digitally created information to develop targeted and effective campaigns. It’s clear that the issue of data privacy is controversial, but that might stem from something as simple as a misunderstanding of what can and can’t be done with internet users’ data.
EU Seeks to Protect Customer Data
A proposed ordinance in Europe could limit the ability of companies to track customer behavior and serve targeted ads based on their findings. The proposal was put forth by the European Commission in an effort to align with strict data privacy standards in Member States.
“Our proposals will complete the EU data protection framework,” said European Commission First-Vice President Frans Timmermans in a press release announcing the proposed legislation. “They will ensure that the privacy of electronic communications is protected by up-to-date and effective rules, and that European institutions will apply the same high standards that we expect from our Member States.”
The legislation would give internet users more control over their own privacy settings, allowing individuals to accept or refuse the tracking of cookies and other identifiers. The commission also ensures the privacy of users who opt in to data collection, protecting them from unwanted spam. All of this means, however, that advertisers will have fewer resources with which to create relevant content for consumers.
“While advancements have been made to marry all the digital IDs in use, the commission’s moves to require opt-ins from every web browser and app for ad tracking will diminish the volume of data available to media sellers and buyers for ad targeting,” says eMarketer Principal Analyst Cathy Boyle. Increased privacy for users means the loss of valuable behavioral insights for companies looking to serve targeted ads.
Is the United States Next?
Of course, data privacy is not just a European issue — Americans are also concerned with how companies share and utilize consumer information. Data from mobile analytics company Adjust shows that one in five iOS devices have enabled the “limit ad tracking” feature, and data privacy laws are on the books in all 50 states.
However, the U.S. Congress has just taken major steps towards freeing that data up for the use of marketers by repealing legislation that restricted the right of internet providers to collect and sell customer data to third parties. This will allow internet providers to compete with companies like Facebook and Google for consumer data, and reflects a very different attitude towards the utility of that data to providing consumers the information and content they want.
We’d love to hear from you on what you think of the two different approaches and how it will impact marketing. Do you think the EU approach is best, or the new stance in the US, or do is there a new approach we’ve yet to see? Will the US based ISPs actually sell the consumer data or will they act in the best interest of their customers? Let us know what you think.