By Suzanne Vranica
The advertising business today is largely driven by people's
personal information. Data is the lifeblood of tech platforms,
publishers, ad agencies and ad tech companies. However, this
marketing approach is facing plenty of pressure. Its biggest
challenge yet: the General Data Protection Regulation.
Europe's sweeping new privacy law, which often requires
companies to get users' consent to gather personal information, and
requires companies to be more transparent about the data they
collect and how it is used, is already causing headaches. Although
GDPR went into full effect only on May 25, complaints about
companies such as Google and Facebook are starting to be
investigated, says Andrea Jelinek, the European Union's top privacy
enforcer.
The potential penalties -- as much as 4% of global revenue for
companies found to be noncompliant -- are daunting. Thus companies
around the globe have scrambled to bring their practices in line
with the new rules.
The Austrian-born Ms. Jelinek, who heads a new European Data
Protection Board, spoke with The Wall Street Journal about the new
complaints against the tech giants, the Cambridge Analytica scandal
and whether lawmakers have the resources to enforce the new
regulations. Edited excerpts follow.
Targeted ads
WSJ: Should targeted advertising, which often uses individuals'
personal information, like location or a Web browsing history,
continue to exist, or should the ad industry move away from that
approach?
MS. JELINEK: Personally, I am not a fan of targeted advertising.
I am sure the industry will come up with new models that are
data-compliant. Maybe the ad industry will come up with something
that's better or different than using your personal data.
WSJ: How many companies are currently under investigation?
MS. JELINEK: There are currently about 24 cross-border
complaints that we are starting to investigate.
WSJ: What do the complaints involve?
MS. JELINEK: They involve forced consent, which is when
consumers have no choice whether or not they give away their
personal data. They are forced to accept data-collection policies
to use certain services.
WSJ: Which companies are being probed?
MS. JELINEK: Companies such as Facebook, Google and services
such as Instagram and WhatsApp, which are owned by Facebook.
[Editor's note: Facebook Chief Privacy Officer Erin Egan said
last month: "We have prepared for the past 18 months to ensure we
meet the requirements of the GDPR. We have made our policies
clearer, our privacy settings easier to find, and introduced better
tools for people to access, download, and delete their information.
Our work to improve people's privacy doesn't stop on May 25th. For
example, we're building Clear History: a way for everyone to see
the websites and apps that send us information when you use them,
clear this information from your account, and turn off our ability
to store it associated with your account going forward."]
[Google didn't respond to a request for comment.]
WSJ: Does forced consent run afoul of the rules?
MS. JELINEK: The GDPR set very strict rules regarding consent,
especially when the consent is asked in a "take it or leave it"
approach. Since each case has its specificities, the answer might
be different for each complaint. It is too soon to give any view on
the cases. The final interpretation of EU law belongs to the
European Court of Justice.
WSJ: How long will those investigations take, and will the
companies be fined?
MS. JELINEK: The duration is impossible to say at this point. It
is different from case to case. Not all investigations necessarily
lead to fines.
WSJ: What apps do you use?
MS. JELINEK: I just use a little bit of Facebook because of
professional reasons, and I use Instagram to follow my daughter.
That's it.
Cambridge Analytica
WSJ: What are your thoughts on the Cambridge Analytica scandal,
which involved the data firm's allegedly improperly obtaining data
on tens of millions of Facebook users?
MS. JELINEK: We think Cambridge Analytica is just the tip of the
iceberg.
WSJ: Y ou think more issues will be found?
MS. JELINEK: Could be, but we have to wait for the outcome of
the investigation. If you think about what happened over the past
few months, we keep getting more information and revelations.
Facebook said, "We have to improve this." It's like a puzzle. They
say, "We are going to improve," and then there are new revelations
and then more revelations.
It's like a ladder, and it's a pity. It's a pity a
billion-dollar company like this one isn't black and white about
the data, the consumer, or the contracts they have with whom they
are sharing the data.
[Editor's note: A spokeswoman for Facebook points out that the
company has said it expects to find more bad apps as part of its
ongoing investigations.]
WSJ: How has the Cambridge Analytica affair affected your
thinking about privacy?
MS. JELINEK: I think that privacy and data protection is a
fundamental right. It's that important. I think it's also important
for the companies that they know they are responsible for the data
they are collecting and for the data they are sharing.
WSJ: Do you think the scandal has made consumers more aware of
the lack of privacy that exists today?
MS. JELINEK: Many people, for the first time, noticed that they
could be affected. If you think that your personal data are
affected, your privacy is affected and your life is affected, then
the awareness rises. It was one of the reasons data-privacy
concerns went mainstream.
WSJ: GDPR was supposed to limit the tech giants from pressuring
people into relinquishing control of their data, but it seems to
have strengthened Google and Facebook. Ad dollars have been
directed to Google away from smaller ad exchanges because they
cannot verify if people gave consent. Did you expect this law to
benefit the tech giants?
MS. JELINEK: The smaller companies had the chance during the
past two years to adapt like the larger ones have.
Enough resources?
WSJ: Do countries have the financial resources to really go
after cash-flush digital giants like Google if they run afoul of
the laws?
MS. JELINEK: Even if you have the deepest pockets, you have to
be compliant with the law.
WSJ: Do you think European privacy laws will pressure U.S.
lawmakers to put forth more privacy legislation?
MS. JELINEK: I think the U.S. administration and U.S. lawmakers
know that data protection is becoming a main issue. It's becoming
popular in the United States. U.S. citizens care about their
personal data. They care about who they're giving it to and what
the companies are doing with their data. I also am seeing interest
and questions from U.S. companies regarding GDPR and how to be
compliant.
Ms. Vranica is a news editor for The Wall Street Journal in New
York. She can be reached at suzanne.vranica@wsj.com.
(END) Dow Jones Newswires
June 18, 2018 13:42 ET (17:42 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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