The collection and storage of user data by online service providers has become controversial. Service providers insist on the need for such processing while consumer groups raise concerns over the duration of data retention periods and the perceived invasive nature of some of these services. In a speech in Brussels in March, the European Consumer Commissioner, Meglena Kuneva, delivered a message to online service providers that “the current situation with regard to privacy, profiling and targeting is not satisfactory”. She highlighted three areas: privacy policies, commercial communications and commercial discrimination.
PRIVACY POLICIES
The Commissioner stated that “on the internet, consumers are in fact paying for services with their personal data and exposure to ads”. She opined that privacy policies must “submit to the same fairness and transparency standards that are commonly accepted in commercial contracts”. Maintaining the status quo is not an option.
Referring to the recent controversy over the change in terms and conditions of a popular social network, where it required 175 million users to notice the change and with internet users not normally reading contractual online terms, she posed the question “are we willing to delegate onto consumers the full task of monitoring the internet for abuses in the existing myriad of incomprehensible policies?” Clearly she thought not.
We must establish the principles of transparency, clear language, opt-in or opt-out options that are meaningful and easy to use…the right to have a stable contract and the right to withdraw…fair clauses and the right to participate in economic activity without selling your whole self indiscriminately as commercial fodder to the entire world.
COMMERCIAL COMMUNICATIONS
Of the risks associated with building user profiles, she is concerned that knowledge of users’ personal circumstances such as financial status or information relating to health, can potentially “translate into pressure”. She gave the following example
Assume for a second you receive an unsolicited message that your cholesterol is up alongside a recommended treatment. Is this help or pressure? What if the message is about your weight? Is it enough to signal the commercial nature of the message?
Ms Kuneva stated that there is evidence that individuals might abdicate their own evaluation of risks when given individual advice by an expert. This “reinforces the need to enforce the principle of identifying commercially sponsored messages” and those who send them.
Ms Kuneva noted that young people and children are being particularly targeted as “conduits” for advertisements. She wants to develop guiding principles in order to combat the dangers of over aggressive commercial messages and to establish criteria for a commercial message not to mislead by passing as personal advice.
COMMERCIAL DISCRIMINATION
The possibility for discrimination arises because personal and behavioural information can reveal how much the user is actually willing to pay for a service as well as the risks he or she is likely to take. It can also reveal the likelihood that the user will return the goods.
Ms Kuneva suggests that such information has the potential to be used to extract “the maximum price possible from you or to block your access to some services altogether”. This in turn would “damage the confidence in digital trade and services”. Excessive targeting in the form of price or commercial discrimination could potentially inhibit the ability of users to predict and compare prices, thus undermining competitiveness in a particular market. We must, she suggests, “start thinking about the parameters for legitimate discrimination”.
COMMENT
The language is emotive, the message emphatic. This is a “last chance given to business to improve the situation”. It is a “warning signal…but we cannot afford foot dragging in this area”. An inadequate response from online businesses could well mean legislative intervention. As Ms Kuneva puts it, “we will not shy away from our duties”. Industry therefore has some thinking to do.
