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EU privacy proposal could dent Facebook, Gmail ad revenue

Published Jan 12, 2017 06:02am

BRUSSELS: Online messaging services such as WhatsApp, iMessage and Gmail will face tougher rules on how they can track users under a proposal presented by the European Union executive on Tuesday which could hurt companies reliant on advertising.

The web companies would have to guarantee the confidentiality of their customers’ conversations and get their consent before tracking them online to target them with personalised advertisements.

For example, email services such as Gmail and Hotmail will not be able to scan customers’ emails to serve them with targeted advertisements without getting their explicit agreement.

Most free online services rely on advertising to fund themselves.

Spending on online advertising in 2015 was 36.4 billion euros, according to the Internet Advertising Bureau (IAB).

The proposal by the European Commission extends some rules that now apply to telecom operators to web companies offering calls and messages using the internet, known as “Over-The-Top” (OTT) services, and seeks to close a perceived regulatory gap between the telecoms industry and mainly US. Internet giants such as Facebook, Google and Microsoft.

It would allow telecoms companies to use customer metadata, such as the duration and location of calls, as well as content to provide additional services and so make more money, although the telecoms lobby group ETNO said they remain more constrained than their tech competitors.

The proposal will also require web browsers to ask users upon installation whether they want to allow websites to place cookies on their browsers to deliver personalised advertisements.

Published in Dawn, January 12th, 2017