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In the last few weeks, the leaders of tech giants such as Facebook and Google have headed to Brussels as the European Commission debated and then revealed a draft of its planned new rules surrounding data and artificial intelligence as well as sharing proposals focussed on driving growth and innovation in the region.
When it comes to policy, Europe often sets the standards that the rest of the world adapt and adopt, which has often been the case with data privacy regulations. This is most likely why leaders from Silicon Valley are paying such close attention; as tech companies are increasingly scrutinised, it’s in their interest to be a part of the debate which could form how they operate in the future.
The EC wants to prevent data misuse whilst also building the technology platform for society to reap the benefits of being data driven.
“Currently, a small number of Big Tech firms hold a large part of the world’s data”
With statements such as this, it is clear that the draft policies released by the EU last week are taking aim at US tech giants. To compete with this, the new policies aim to create “a single European data space”, making the EU a more significant player on the global data stage, focusing on fairness and transparency in a bid to differentiate itself from its main competitors in this field – the US and China.
So, what’s on the menu?
To achieve its goal of creating a single market for data, the EU’s first plan to improve its standing on a global stage is to foster the commercial sharing and processing of data. The ultimate goal is to provide the infrastructure for EU companies to be able to flourish to the same scale as US ones, such as Facebook, for example.
It wants to make data available to entrepreneurs to use as the basis for startups and new innovations. Of course, in return, the EU expects that companies build tech that is in line with its beliefs of fairness and transparency. By ensuring this, it’s hoped that citizens will become more comfortable with the use of their personal data.
By some, AI is believed to be a truly transformative technology, and potentially even critical to economic survival. Others express concern stemming from privacy issues and the potential impact AI will have on the future of work.
In the US, huge tech companies have been leading the way. In China, it’s the government pushing forward with new technologies. However, Europe is perceived to be falling behind. So, in the new proposals, the need to catch up is a prominent topic.
A huge focus is on investment. The EU proposed spending of over $20billion annually for a decade to support new data ecosystems that can aid AI development. Additionally, in line with the rest of the announcements, the EU plans to differentiate itself by creating an environment where AI investment is an attractive proposition for companies, but also not a concern for individuals. The proposals focus on the need to develop rules that prevent problems including bias and discrimination. A particular emphasis was also placed on “high risk” uses of AI, such as in health care and transportation. These areas will face much tougher scrutiny.
A specific area of focus in the proposals was facial recognition, an increasingly controversial technology, which the EU confirms it will continue to study. Of course, there are some uses of facial recognition that are pretty low risk, such as unlocking a phone, but the EU’s reports make it clear that the technology has the potential to pose human rights risks.
At the moment, the use of facial recognition is allowed in most cases, but the EU is proposing a debate on where the technology should be regulated or even banned in some cases. It looks likely that we will see some restrictions, on the grounds of a person’s right to privacy, the processing of data without consent, and potential discrimination and bias.
Although no guidance or explicit warnings have been made at the moment, these proposals come in the same week that the EU’s digital chief, Margrethe Vestager, says that she believes that facial recognition requires consent under GDPR. Whilst the EU did cancel its plans to completely ban facial recognition temporarily, Vestager stated that new legislation is coming, but in the meantime, EU member states can make their own decisions on the technology whilst further investigations are undertaken.
The EU’s view on the AI debate seems to be focussed on a move away from the US approach, where companies have been left to develop technology with little scrutiny. By taking this more hands on approach, the EU hopes to be able to set clearer boundaries on data privacy, but also, through an ambitious investment programme, encourage innovation and advancements in technology.
Following last week’s announcements, the European Commission has begun a 3 month consultation inviting comments on the plans. We should hopefully see formal propositions for new legislation as soon as the end of the year. Following on from Boris Johnson’s announcement that the UK would seek to move away from the EU’s data protection rules and establish its own, it will be fascinating to see how the EU’s new proposals impact that stance and alter the future UK/EU relationship surrounding technology and privacy.
Earlier this month, Google announced that it intended to block third party cookies in its Chrome browser by 2022. Although this move isn’t completely unexpected and we’ve seen similar moves from other tech companies, marketers will be concerned about what the future of web analytics and advertising holds.
Google is hoping that in place of third party cookies, its Privacy Sandbox standards will become the new normal, allowing marketers to run targeted ads without actually having access to a users’ personal data.
Many people thought that Google would hold off killing third party cookies for as long as possible, but with this move, a potentially clever (and lucrative) one for Google, advertisers are remaining within Google’s ecosystem, and would now be relying on Google’s first party data. This allows Google to maintain (and maybe even strengthen) its position as the leading force in digital advertising.
It’s still early days and so far there are a number of proposed features but no actual platform to be tested. Advertisers will use APIs to receive data on things like conversion and attribution, relying on anonymised signals, without cookies, in a users’ browser. The fact that user data will be stored within a browser is the most significant point to note. By keeping data on the users’ device, privacy regulations should be met.
As I already mentioned, it’s still early days, and Google seems to be open to working with users and advertisers to make sure this proposed framework is beneficial to all stakeholders, not just those seeking to gain commercially from data. Nonetheless, several concerns with the initial proposal have been raised.
One of the key criticisms lies entirely in the point made above – the framework being “beneficial to all stakeholders.”. Opponents to this move argue that it’s impossible to serve the user and the advertiser. Whilst other browsers such as Safari and Firefox are outright blocking third party cookies by default, some sceptics argue that Google is merely trying to redefine what a third party cookies is, so similar levels of tracking can continue, but Google can still claim to be blocking third party cookies inline with its rivals.
On top of this, another concern is whether the Privacy Sandbox will provide a level playing field between Google and its previously mentioned rivals. For example, Google advertises itself and offers advertising products. It’s vital that Google doesn’t make exceptions for itself, and follows its own standards. Transparency is key.
Overall, however, we should be taking the longer term view about consumer data and associated trends.
In five years’ time, we should have an environment where individuals can manage their own information, based on an accurate view about how that data might be used. That is clearly the main trend from the legislative changes over the last couple of years, and what consumers expect now, especially in the long shadow of the Cambridge Analytica affair. The industry needs to atone for its lack of clarity and laissez-faire attitude of the past.
In that sense, Chrome’s announcement was both inevitable, and long overdue. In terms of the “browser marketplace”, Chrome has just played catch-up with its competitors.
However, it does recognise the idea that individuals should be able to manage their own information. The idea of “data lockers” isn’t new – in fact, it’s over 10 years old – but it does feel like this becomes more likely as a scenario, albeit this is still within the confines of a proprietary environment (the browser).
I think this acknowledges and opens up the idea of individuals owning their data (in a way they don’t at the moment), and I think we will start to see “data locker” plug-ins through which customers will be able to choose what information they want to share with different organisations, and potentially to monetise these accordingly.
Whatever the outcome of Google’s consultation, it’s clear that the future of digital advertising doesn’t involve third party cookies as they exist now, particularly following similar action from other browser companies. What is less clear is the impact these moves will ultimately have on advertising revenue and the effectiveness of digital advertising. But with over 80% of Google’s revenue stemming from advertising, it is, surely, in its own interest to ensure that digital advertising remains effective and something that consumers actually want.