Meta must pay a fine of 210 million euros (in the case of Facebook) and 180 million euros in the case of Instagram for an established violation of the GDPR. The ruling indirectly sets a precedent that could be decisive for how we advertise in the future.
If you haven’t read part 1 of this article, you should do so, or at least read the following summary. Because it was this procedure that motivated me to think about the topic of personal advertising in the first place.
💬 Summary of part 1:
Meta Ireland (the European subsidiary of Meta, which is responsible for Facebook Instagram and WhatsApp) has been barred from relying on the “contract” legal basis in connection with the provision of behavioral advertising as part of its Facebook and Instagram services. Its past processing of user data in alleged reliance on the “contract” legal basis thus constitutes a breach of Article 6 of the GDPR. Meta must pay a fine of €210 million (in the case of Facebook) and €180 million in the case of Instagram for the established breach of the GDPR. Meta Ireland must bring its processing operations into compliance with the GDPR within 3 months.
I had announced in part one that the second part would deal more with the philosophical aspect of the subject. And that is the case.
Data protection in the future and advertising? That will be a problem!
Let’s remember back: In the assessment of whether Meta could invoke a contract, the DPC did take the view that it was permissible. Whereupon several other data protection supervisory authorities opposed this. Basically, I don’t agree with the DPC and its view of the legal basis in this case either – at least not entirely. Why not entirely? Because they are right about one thing. One thing that should also be clear to others, but which they sometimes overlook in their fight against the evil big Data companies. Let me make something clear briefly:
An ad-supported free service is dependent on advertising revenue, that’s even the definition of “ad-supported”, but that doesn’t make advertising a core element of the service, since the functions also work without advertising, right? You would think – until the power for the servers fails, because Meta can no longer pay the electricity bill 😊. Okay, that won’t happen to them that quickly, but we shouldn’t forget that this is a precedent. And a really big one in fact, which is guaranteed to be used as a basis for decisions in other fine proceedings as well. Whether the company responsible is Meta or a small advertising agency in the German Alpine region.
And that is the dillemma! A prime example of how the European right to data protection protects citizens, but in the worst case could make them unemployed. Sounds exaggerated, I know, but it has a kernel of truth.
📰 A comparison taken from everyday life – The Sunday Newspaper
There are also a lot of brochures in my free Sunday newspaper every week.
These are also personalized advertising in a way, because they show me the offers from the supermarket around the corner and not those from some supermarket in the “Black Forest”. Although my personal data was not processed for this, the advertising is still targeted.
However. This is how this newspaper finances itself and also pays the people who are responsible for the content of the newspaper with these funds.
These are people like you and me, they need bread on a plate (preferably with toppings), they need coal for electricity and heating (either charcoal or Euros), and they can’t just change jobs!
If my Sunday newspaper cuts out the brochures, in the worst case scenario, nothing ends up in my mailbox. Here locally, the brochures even define this newspaper. No one who reads this newspaper picks up the brochures in the store beforehand. After all, they come with the newspaper anyway. This has evolved here from advertising to a postal service.
That doesn’t make the brochures a core element of the newspaper – but it does make them essential to the newspaper’s continued existence. That is their business model. And even before the GDPR, many such newspapers abandoned this business model and became fee-based.
Of course, my Sunday newspaper could also try to make me pay for it. Or not?
No. First, like many people, I wouldn’t read them anymore. And secondly, that doesn’t solve the problem. The best example of this are the paid newspapers that already exist. They also have brochures because the subscription income is simply not enough!
Advertising is an important financial anchor in some industries, and privacy prevents much of what makes advertising so lucrative. No ad blocker has been able to do that yet. And even though I hate advertising, like a lot of people out there, I say, “This is a problem.”
Perspective on change
We live in a world that is so technologically advanced that we as a society will soon no longer be able to keep up. Also in terms of advertising. Because on the one hand we want data protection, on the other hand we don’t want to pay anything or don’t want things to become more expensive. But SPOILER. It only goes one thing at a time. It is the Simple decision, whether we watch a feature film for free with advertising on TV, or paid in the cinema with advertising, or paid on Netflix (and there you even pay every month, even if we do not watch anything).
In the end, we only pay to NOT watch something, the commercials. And we’ll get to the point where we’ll be wanting movie specials on TV back.
I will now address the issue, which you may already have in mind, and ask the question:
Banning personalized advertising?
The answer is not so simple! A complete ban on personalized advertising would likely have a significant impact on the advertising industry and consumers’ online experience. Personalized advertising is an important source of revenue for many companies, and a ban on the practice could lead to a decline in the effectiveness and profitability of online advertising. Without the ability to use data to target consumers, advertisers would likely have to rely more on broader, less targeted approaches, which could result in a less personalized and potentially less relevant advertising experience for users.
On the other hand, a ban on personalized advertising could also have some positive effects. It could enhance consumer privacy by reducing the amount of data collected and used for advertising purposes. It could also reduce the potential for discrimination and bias in advertising, as algorithms would not be able to use personal data to target specific groups of people. However, it is also possible that a ban on personalized advertising could lead to a reduction in the overall quality and diversity of content available online, as companies would have decreased resources to fund content creation.
Can inflation also be caused by a lack of advertising?
Yes. It is possible that products could be more expensive without personalized advertising. Personalized advertising allows companies to target their marketing efforts more effectively, which can help them increase sales and generate revenue. This revenue can then be used to offset the cost of manufacturing and distributing products. If they are not allowed to do this, they may have to increase the prices of their products to compensate this decrease in revenue.
It’s also worth noting that personalized advertising can help increase competition and lower prices for consumers. By allowing companies to better target their marketing efforts, personalized advertising can help smaller companies compete with larger ones, which can lower prices for consumers. If personalized advertising were to be banned, the competitive landscape could change, leading to higher consumer prices. Overall, the impact of a ban on personalized advertising on product prices would depend on a variety of factors, including the specific nature of the ban, the effectiveness of alternative marketing approaches, and the overall level of competition in the market.
Is there an alternative?
An alternative would be for companies to use more targeted, but non-personalized, advertising methods. For example, they could use data about consumers’ browsing history or location to show them ads that better match their interests, but without collecting and using personal data such as names or contact information.
It is also possible for companies to focus more on building relationships with consumers through activities such as loyalty programs, email marketing and social media engagement. These types of approaches can be more effective in building brand awareness and loyalty, but may be less effective in driving immediate sales.
Overall, targeted advertising is generally considered a more privacy-friendly approach because it allows companies to reach specific audiences without collecting and using personal data about individual consumers. However, it is important that companies are transparent about their data collection and usage practices, regardless of the approach they use, in order to protect the privacy of their customers.
The specific alternative to personalized advertising depends on the company’s needs and goals, as well as the specific context and market in which it operates.
So we conclude that not everything is black and white and that we need a speed that allows us to trigger a process that brings us to a change within this topic. Because if we do it too fast, the economy can suffer, as everyone should know since the end of 2022 for sure.
About the author
Patrick Schneider is the owner of ownonline.eu. He describes himself as a born nerd with a specialization in entertainment. Patrick can draw on a wealth of experience in website administration, basic programming, marketing and privacy, and more.
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