Original URL: http://www.theregister.co.uk/2012/01/05/advertising_code_not_compliant/

Ad slingers - obeying EU snoop code is NOT GOOD ENOUGH

Industry rules at odds with cookie laws, say watchdogs

By OUT-LAW.COM

Posted in Government, 5th January 2012 14:54 GMT

Website operators that track internet users' online activity in order to serve targeted adverts do not automatically comply with EU privacy laws by following the industry code. This is according to a committee of all of the EU's national data protection regulators.

The Article 29 Working Party said that solely adhering to rules set out in the self-regulatory Online Behavioural Advertising (OBA) code [PDF] would not in itself be enough to comply with the EU's Privacy and Electronic Communications (e-Privacy) Directive, because the code does not demand that operators obtain clear enough user permission to track online activity.

Publishers and advertising networks use cookies – small text files that record internet users' activity on websites – to track user behaviour in order to target adverts to individuals based on that behaviour.

Last year the Internet Advertising Bureau Europe (IABE) and European Advertising Standards Alliance (EASA) set out rules on OBA in a new code which many leading content providers, including Microsoft and the BBC, have committed to.

The IABE/EASA code requires operators to give users access to any easy method for turning off cookie tracking on their site and make it known that they collect data on them for behavioural advertising. Operators must also display an interactive icon, telling users that the adverts track their online activity and enable them to manage information preferences or stop receiving behavioural advertising by clicking the icon to visit a pan-European website, youronlinechoices.eu.

However, the Article 29 Working Party – which is a committee made up of representatives from each of the EU national data protection regulators – said that following the code was not enough for operators to be said to be complying with the law.

"In the present context and taking into account the current lack of knowledge and awareness of the web users with regard to behavioural advertising, the above-mentioned icon approach is not sufficient in itself to properly inform the users about the use of cookies," the Working Party said in its opinion [12-page / 85KB PDF].

Under the e-Privacy Directive, storing and accessing information on users' computers is only lawful "on condition that the subscriber or user concerned has given his or her consent, having been provided with clear and comprehensive information ... about the purposes of the processing". Consent must be "freely given, specific and informed".

An exception exists where the cookie is "strictly necessary" for the provision of a service "explicitly requested" by the user – so cookies can take a user from a product page to a checkout without the need for consent, for example.

'Icon' not clear enough

The icon does not contain sufficient "additional language" to explain to the average internet user what its "underlying meaning" is and does not enable consent to be given until after tracking has begun, the Working Party said.

"In order for information to be provided in an understandable way, it is necessary to use clear language, allowing users to immediately understand that their activities are being tracked when they browse the web and they may ultimately receive targeted ads. The mere use of the word 'advertising' alongside the icon is not enough to inform the user that the ad uses cookies for the purpose of behavioural advertising. The wording should as a minimum include the element of 'personalised advertising'," the watchdogs' opinion said.

"The icon can serve as additional information and as a reminder notice after the subscriber or user has provided his/her consent for the processing of his/her data for the purpose of behavioural advertising," it said. "Thus, the proposed icon approach cannot be used for the provision of prior information, as required under the current legal framework (unless it is combined with a way to obtain the user's consent).

"Since the icon in itself and the website www.youronlinechoices.eu do not provide accurate and easily understandable information about the different controllers (advertising networks) and their purposes for the processing, the code and the website do not meet the requirement set out at the revised e-Privacy Directive," it said.

Choice to 'opt out' is no choice at all

"The EASA/IAB Code, instead of seeking users' consent, claims to provide for a way of exercising 'choice'. In fact it is a choice to opt out, as it offers the user the possibility to object to having his/her data collected and further processed for OBA. This 'choice' is not consistent with ... the revised e-Privacy Directive, as the data are in fact processed without user's consent and without providing the user with information before the processing takes place," the opinion said.

The Working Party also expressed concern that individuals who managed their OBA preferences via the 'youronlinechoices.eu' website would themselves be served cookies without consent when opting to choose not to be tracked.

"Although the opt-out cookie prevents the further reception of personalised advertising, it does not stop the advertising network from accessing and storing information in the user's terminal," the opinion said. "On the contrary, it has been demonstrated that an ongoing technical exchange of information between the user’s terminal equipment and the advertising network is still in place after the installation of the opt-out cookie. The user is not informed on whether or not the tracking cookie remains stored in his/her computer and for what purpose."

"The installation of the opt-out cookie does not offer the possibility to manage and delete previously installed tracking cookies, whereas at the same time it creates the mistaken presumption that opting out disables the tracking of internet behaviour," the opinion said.

The 'youronlinechoices.eu' website also contains "JavaScript functions" that track users without proper consent to do so and "in two cases, without any possibility to opt-out from this specific tracking".

The Working Party said that it had concerns about how long data stored about users was being retained for.

"The EASA/IAB Code does not contain any provisions on the amount of data collected and the retention period(s) for the specific purposes. Since the website currently also fails to provide any explanation on this matter, it is unclear how many data are collected by the different advertising networks, how long they are stored, and for what purposes they are being processed. This information is absolutely necessary for a user to make a fully informed decision to consent to such profiling," the watchdogs said.

"In general, given the lack of transparency and public awareness, it is highly undesirable for each advertising network to have a different retention policy in this regard and a self-regulatory initiative would have been very helpful. Such an initiative should at least address the period in which consent can be considered valid, and after which data shall then be deleted," it said.

Nick Stringer, director of regulatory affairs at the IAB UK, told Out-Law.com that the OBA self-regulatory code was not designed specifically to comply with the e-Privacy Directive.

"The self-regulatory EU Framework for online behavioural advertising intends to provide consumers across Europe with greater transparency and control. Through an icon in adverts and information provided, users’ knowledge and ability to control customised advertising will be enhanced. This has been welcomed by the UK Government as a part of its package for compliance with the revised e-Privacy Directive. It should be noted, however, that the work on the EU Framework pre-dates the legislation and is not intended to specifically address compliance with Article 5.3 [of the Directive]. We will continue to work with the European Commission, the Government, the Article 29 Working Party and national regulators on this," Stringer said.

The Working Party said it is possible to obtain users' consent to cookies without having to display multiple 'pop-up' messages on users' screens. Operators could use information banners that requests user consent to cookies and a link to more details about what is being requested, it said. In some cases it may be possible to obtain users' consent to individual ad networks that apply to OBA across different sites or where a single indication of consent is sufficient to enable more than one ad network to place cookies on users' machines, the Working Party said.

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