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European Parliament positions itself against the ad-supported internet

Brussels, 26 October 2017 – IAB Europe regrets the European Parliament’s decision to approve the controversial and extreme report on the proposed ePrivacy Regulation today. By only a slim majority of its members, the Parliament decided to ban advertising-funded businesses from making access to their online content conditional on the user’s agreement to the use of data that is fundamental to the advertising process.

The European Parliament’s text on the ePrivacy Regulation would essentially expropriate advertising-funded businesses by banning them from restricting or refusing access to users who do not agree to the data collection underpinning data-driven advertising,” warned Townsend Feehan, CEO of IAB Europe. 

“Data is the mechanism by which ads are delivered to users, the evidence that users see advertising, and how advertisers pay for it. Data-driven advertising isn’t an optional extra; it is online advertising,” explained Feehan. “Forcing businesses to grant access to ad-funded content or services even when users reject the proposed advertising value exchange, basically deprives ad-funded businesses of their fundamental rights to their own property. They would be forced to give something in return for nothing.”

In ignoring the inherent link between data and the commercial functioning of digitally driven businesses, the ePrivacy Regulation risks seriously distorting the nature of the internet itself. The short-term result would be a major step backwards for the European internet. With publishers unable to target audiences effectively and unable to demonstrate that ads are seen by users, advertising loses its value. With the value of advertising diminished, so is the value – and ultimately the availability – of online services Europeans have thus far enjoyed access to at little or no cost.

“The ePrivacy Regulation will affect almost every aspect of the functioning of the internet and the digitally driven economy. The European Parliament should have taken the time necessary to carefully assess all relevant legal, commercial and technical complexities,” said Feehan. “Use of data in internet business models is far from simple. Its role in users’ experience of the internet is far from simple either. A rushed regulatory approach that fails to acknowledge this complexity isn’t just simple – it’s simplistic.”

IAB Europe will continue to engage constructively with the EU institutions in hopes of meaningfully improving the draft law in the remaining legislative process. The draft ePrivacy Regulation still needs approval from member state governments in the Council of the EU. We hope that they will take the time needed to do a thorough evaluation, and have the courage to oppose the extreme position taken by the European Parliament. 

The co-legislators and the European Commission are expected to enter so-called trilogue negotiations to agree compromise during 2018.