19. October 2020

The DSA: #03 Ad tech: how targeted advertising harms the internet, the free press and our democracy

Every time when a user visits a website that uses behavioural advertisement, the personal data from the user is collected and then publicly broadcast to possibly thousands of companies ready to target their ads. How long have we looked at a picture? Where have we moved our mouse? What did we click before or after? Everything is collected and stored in real-time by companies that are in the business of online advertising – including location data, browsing behaviour and even hints at our sexual orientation.

 

The technical term for this business model is “ad tech”, advertising technology. Behind this term hides an extensive system that tailor advertising to individuals and specific target groups. The companies in this industry are among the richest in the world. In 2019, Facebook earned almost 69 billion USD with advertising. This represents 98 percent of Facebook’s total global revenues. At Google, the incomes from its advertising activities accounted for a good 70 percent of the total business, at almost $134 billion USD.

 

Why is this form of advertising so successful? Because it promises advertisers to show their content to the very people who are most vulnerable to it. In doing so, they take away revenues from European media that traditionally focus on contextual advertising – for example, car advertising in a car magazine. In the meantime, traditional media outlets are forced to rely on behavioural advertising in the digital space while sharing their revenues with the internet giants and a number of obscure data brokers.

 

With this business model, Google, Facebook and Co. contribute to the polarisation of society and undermine the trustworthiness of traditional media and press. There are two reasons for this:

 

  • The platforms’ algorithms promote attention-grabbing content, since this contributes to keep their users longer on the platform with disinformation, hate and conspiracy theories. Disinformation therefore spreads much faster on the net than well-researched background articles (as shown by an MIT study focused on Twitter).
  • Since many people spend more and more time every day on large online platforms, the advertising market concentrates ever more strongly there. The money is missing at quality media, that do not want to spy on or manipulate their readers.
    The calls for a prohibition of these advertising practices have therefore become louder and louder in recent years. With the Digital Services Act, we have the chance to strengthen our democracy in Europe with strong rules for the ad tech market.

My internet of the future:

  • We have to distinguish between two types of advertising: contextual and behavioural. We should restrict the latter strongly because it analyses and sells user behaviour and leads to a creeping change in people’s behavior and perception.
  • Strict restrictions on behavioural advertising and micro-targeting are followed by a ban after an initial phase since the practices are based on an extensive collection and tracking of user data and activities. We all give our permission to cookies and trackers several times a day, but we don’t see who our data is being shared with. This is a violation of privacy. These practices should no longer be standard. Rather, privacy should be maximally protected from the outset through the settings of internet browsers, of our mobile phones and other devices.
  • The loopholes in the General Data Protection Regulation (GDPR) must be closed so that the large multinational companies can no longer systematically violate EU law (as the German Data Ethics Commission also notes, pdf). National data protection authorities need more resources to enforce the rights of users and to raise more awareness. The EU Commission should also open infringement proceedings against Ireland: Many large tech companies have their EU offices there and the responsible Irish data protection authority has not completed a single case against companies since the GDPR came into force.
  • Online platforms, especially systemic operators, will in future be obliged to maintain a public advertising archive – for all types of advertising, not just political advertising.
    In the forthcoming rules on artificial intelligence, the EU Commission should place micro-targeting and behavioural advertising in the highest risk category and thus subject them to the strictest rules.

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