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EU’s proposed e-privacy law could hamper ad revenues for Facebook and Google

atomico / europe, eu, European Union
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As per a new proposition suggested by the European Union (EU) executive today, online messaging services such as Facebook’s WhatsApp, Google’s Gmail and Apple’s iMessage could face tough rules over their methods of tracking their users. This proposal may also adversely effect their advertising revenues.

These Internet behemoths will then be supposed to promise the confidentiality of their customer’s conversations and will also have to seek their approval before tracking them online or serving personalized ads.

If this proposition is passed, email service providers like Gmail will no longer be able to access their customers emails to dish out targeted ads without the users consent. In case you don’t know, advertising is the chief source of generating income for most of the free messaging services, and this proposal is sure to bring negative results to their revenue generation.

The proposal of EU are an extension to the already applied regulations on telecom Companies which offer calls and messages using Internet, which prevents them to access the customers call durations and locations to earn money.

The proposal will also force internet companies to ask their users before creating cookies.

Andrus Ansip, Commission vice-president for the digital single market, said;

It’s up to our people to say yes or no.

Target ads are generally sent to the users trough the cookies , which are placed on their computers, and contains bits of information regarding their surfing sessions on the Internet.

Andrus Ansip, Commission vice-president for the digital single market, said; “It’s up to our people to say yes or no.”

Online advertisers have issues warnings that excessively strict rules may hamper the revenue of many free service providers, and this inability of funds may restrict them from offering free services. Also seeking users consent every time before sending an advertisement would be very burdensome.

Yves Schwarzbart, head of policy and regulatory affairs at the Internet Advertising Bureau (IAB) said;

It will particularly hit those companies that … find it most difficult to talk directly to end users and what I mean by that is tech companies that operate in the background and sort of facilitate the buying and selling of advertising rather than the ones that the user directly engages with.

Only in UK, advertising spawns a revenue of  10 billion pounds ($12.16 billion) for publishers and content creators, stated IAB. One more data security law is expected to arrive by 2018 which is again going bring unpleasant news for many companies. besides EU’s current proposal.

However, this is only a proposal now and has to be passed by he EU’s Parliament and members before becoming a law.


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