Welcome to another edition of NetMission news and policy digest, where we transform some tech news and policy updates of the month into a bite-size reader for you. In this article, we will explore some recent developments in search engine and digital advertising markets across the globe.
Meta’s behavioral advertising banned In Europe
Meta’s Facebook and Instagram platforms have long been dominating digital advertising. They track our online behavior, from web browsing habits to mouse clicks and app usage, and then build profiles using this collected data for targeting ads to users. With 3.03 billion monthly active Facebook users and 2.35 billion monthly active Instagram users, behavioral advertising has been made possible and profitable.
On October 27, the European Data Protection Board (EDPB) issued an urgent binding decision to ban Meta’s data processing for behavioral advertising. This measure stemmed from the Norwegian Data Protection Authority to solidify the initially imposed interim ban and will impact how the company approaches privacy and consent around personalized advertising across Europe.
Meta’s consent mechanism: pay or okay
On 31 October, the Irish Data Protection Commission (DPC) formally notified Meta about the EDPB’s urgent binding decision, giving Meta a strict one-week deadline to comply. Just a day before EDPB’s urgent binding decision was made public, Meta rolled out a subscription model as their version of the consent mechanism (essentially their legal ground for lawful data processing). Instead of implementing a traditional consent mechanism for the processing of users’ data in advertising, Meta introduces this pay-or-okay model for users to consent passively. If users don’t pay for ad-free Facebook and Instagram, it implies that they are “okay” with their data being processed for personalized advertising on these platforms.
Through this monthly subscription model, people across the EU, the European Economic Area (EEA), and Switzerland can “choose” to view personalized ads or go with another “choice” by paying to remove ads on Facebook or Instagram. In the announcement, Meta asserted that they “will not process their [subscriber’s] information for personalized advertising”. However, this doesn’t mean they will stop processing and profiting from behavioral advertising; they are just changing the legal bases under which they do so.
Meta’s subscription model can be attributed, in part, to its strategic response to the EU General Data Protection Regulation (GDPR) and in preparation for the upcoming Digital Markets Act (DMA), since “consent” is probably the only legal basis Meta has left to justify data processing under the GDPR Article 6, while the DMA Article 5 explicitly establishes it as an exception for some of its obligation as gatekeeper.
Additionally, the EU’s Digital Services Act (DSA) rules have been applied to platforms with more than 45 million users in the EU, such as Google, Meta, X, TikTok and Apple, since this August; the rules will soon apply to all online intermediaries and platforms, including marketplaces, social networks, content-sharing platforms, app stores, and online travel and accommodation platforms, starting February 17, 2024. Under the new rules, platforms are accountable for illegal and harmful content on their platforms, with a noteworthy establishment prohibiting dark patterns (from all users) and presenting ads based on the profiling of minors; We can anticipate more policy updates on advertising, transparency, and moderation from these platforms.
Monopoly power of the search engine, digital advertising, and cloud markets
Meta and Google are the duo titans of online advertising. While Meta has been dominating targeted social media advertising, Google has held a commanding market share in digital search advertising. Since 2009, Google has boasted a share ranging from 83% to over 90% in the desktop search engines market share globally. By November 2023, Google’s dominance had surpassed 95% of the mobile search engine market share worldwide, leaving nominal space for its so-called “competitors” – Microsoft’s Bing and DuckDuckGo, for instance, only accounted for a mere 1% of the market collectively.
In November, the U.S. Department of Justice wrapped the evidentiary phase of its antitrust trial against Alphabet’s Google. The proceedings unveiled Google’s practice of paying Apple and other tech companies an “appropriate” (but undisclosed) amount of money to make itself the default search engine on their devices. Shortly thereafter, an association of 83 media outlets in Spain filed a 550 million euro ($600 million) lawsuit against Meta, accusing the company of being “systematic and massive non-compliance” of EU’s rules on data protection between 2018 and 2023, constituting an unfair competition in online advertising. In a parallel move, Google urged the UK’s antitrust regulator, the Competition and Markets Authority, to take antitrust actions against Microsoft in the UK cloud market.
Are governments at the forefront in this battle?
Some governments are spearheading the fight against the dominance of Big Tech. Take Canada as an example, which passed the Online News Act (Bill C-18) that mandates platforms like Meta and Google to remunerate news outlets for featuring their journalism. However, Meta’s response was less than favorable (similar to how they first reacted to Australia’s News Media Bargaining Code in 2021, though they eventually reconciled with the Australian government later and lifted the ban). In June, the company took a decisive step by blocking both domestic and international news access from Canadian Facebook and Instagram users.
Contrastingly, Google sealed a deal with the Canadian government in November. This agreement, forged three weeks before the Act took effect, ensures that Google continues to share Canadian news online, with the company committed to making $100 million annually to Canadian media organizations.
Shifting focus to the Asia Pacific region, in late November, Australia’s competition watchdog, the Australian Competition and Consumer Commission (ACCC), called for a regulatory reform on competition laws for digital platforms like Amazon, Apple, Google, Meta, and Microsoft in the country. In its seventh interim report on expanding the ecosystem of digital platform service providers, ACCC voiced apprehensions about these platforms’ data collection practices. This call seeks to establish “targeted consumer protections and service-specific codes to prevent anti-competitive conduct by particular designated digital platforms”.
Epilogue: Alternative ways to protect oneself
Reddit Inc., an American social news aggregation, content rating, and discussion website, took a different turn on advertising, termed “contextual keyword targeting” to allow advertisers to reach their audience by targeting specific keywords of different topics, interests, or conversations on the platform. However, contextual advertising is far from groundbreaking even with its negation of cookies. For instance, location-based targeting raises privacy concerns. Nevertheless, it could analyze vast amounts of online content, such as deciphering content clusters and topics that captivate audiences by analyzing a wide range of URLs at the same time with the help of AI.
- Your Data at Risk — The Dark Side of Real-Time Bidding in Digital Advertising
- Going Once, Going Twice, Sold: Real Time Bidding Data Privacy Breach
- Real-Time Bidding is Bad for Privacy and Promotes Disinformation
Recently, a new tool named “Nightshade” was launched to allow artists to protect their copyrighted content from being used by generative AI models by adding invisible changes to the pixels in their art before they upload it online. However, it is a double-sided sword, as it can “poison” training data and cause serious damage to image-generating AI models.
As an alternative, some people opt to disengage from social media altogether to sidestep surveillance-based advertising, alongside concerns over privacy and various other issues. However, with such a level of digitalization nowadays, it appears increasingly challenging to elude the use of our data for targeted ads or, at times, the training of AI models.
What are we reading?
Many of us are unaware of the power and influence of data brokers on the digital economy and our daily lives. In Data Cartels: The Companies that Control and Monopolize Our Information, Professor Sarah Lamdan explains that a handful of companies control the supply of the world’s data, and with this level of control, they can prevent free flows of data, exploit our privacy, and other human rights, and process online information in harmful ways, especially to vulnerable groups.
[Spoiler alert] Her conclusions are brilliant for their simplicity and efficiency, including creating a digital infrastructure that upholds liberal ideals and specific legislative and market-based solutions that recognize data as a public good.
By Jenna Manhau Fung (Reviewed and edited by Kenneth Leung and Vicente Arias González)