Regulators at the helm to curb online ad auctions

Sometimes there is news that gets snowed under in other current events, but has just as much impact on how our (online) world looks. It's a major annoyance for almost all of us: cookie banners. On countless websites, one of those irritating little screens appears, enticing you to agree to something. You agree to something, without knowing what for. If you do try to understand what is happening, you quickly lose your way among the often hundreds of "partners" who want to do something with your personal data. Even if you agree, you may wonder if you have given your consent.

The trade of personal data

Take the Volkskrant, for example. The website immediately displays a patch of text asking if you are okay with data about your behavior being shared with "93 advertising partners." You've probably never heard of most of these partners. The consent button is big and yellow. Anyone who ignores it and clicks "set" will see a list of "107 ad partners." These store your data, such as your "precise geolocation," sometimes for years, and "match and combine" that data in turn with data from other sources. But with that, as a user, you still don't understand exactly what is happening.

The newspaper needs your permission to use your data to display ads. Information about you and your behavior online is shared with dozens, sometimes even hundreds, of companies you've never heard of. Your data and browsing habits are then used in a fully automated system. Advertising space on websites is auctioned off to advertisers in a fraction of a second. These determine on the basis of your data whether they want to bid for a spot for their advertising on the site you visit. In short: there is behind-the-scenes trading of your personal data.

And that violates European privacy laws. That's why Bits of Freedom already asked the Personal Data Authority to act in 2019. In other places in Europe, a number of other organizations that stand up for the protection of human rights did the same. Three years later, the Belgian regulator ruled clearly: this system of online ad auctions is illegal. The company managing this system, IAB Europe, was fined 250,000 euros. It had to modify the system and remove all personal data collected. Naturally, IAB Europe disagreed with this decision and went to court.

"Companies may no longer covertly track your behavior based on "consent" you have given under pressure. This will soon allow us to deal not only with this shadowy practice, but hopefully also with those annoying cookie banners itself."

Illegal

Fast forward to last week: IAB Europe got the lid on its nose and the judge ruled in favor of the regulator. A ruling with huge implications. It means that the system of behavioral advertising - in which our behavior is constantly monitored - is really against the law. So the current way of advertising on the Internet is illegal. Advertising is still allowed, but not in a way that secretly tracks everyone's behavior. What is allowed, however, is contextual advertising: a hardware store can advertise a video on how to build a deck. There is nothing wrong with that.

This is a win for everyone in Europe - and possibly beyond. Companies may no longer covertly track your behavior based on "consent" you have given under pressure. With this, we will soon be able to do away not only with this shadowy practice, but hopefully also with those annoying cookie banners itself.

But it hasn't reached that point yet. Regulators have ruled that the system is illegal, and the courts have now confirmed that. But the companies making billions from this model are obviously not going to stop on their own. That's why European regulators really need to act now: enforce the law and make sure these companies actually stop.