Europe to Implement ‘Cookie Legislation’ for Enhanced Online Privacy

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Major websites across Europe are scrambling to implement a new rule also known as the “cookie directive” to safeguard consumer privacy online.

This new law – which was actually passed in 2009 – goes into effect May 25 and requires companies to get “explicit consent” from users before installing cookies (small files that track your online browsing history).

The new rule states:

“Member States shall ensure that the storing of information, or the gaining of access to information already stored, in the terminal equipment of a subscriber or user is only allowed 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.”

Marketing’s Potent Weapon

The online advertising world fears this change will leave them without one of the best ways to collect marketing information about online users. Not all companies are even prepared, with critics arguing it could cause uncertainty for both businesses and consumers.

Critics fear for the future of European tech startups, since this law may give non-EU countries (like the United States) a bigger advantage. TechCrunch says it may “kill off the European startup industry stone dead, handing the entire sector to other markets and companies.”

The Right to Be Forgotten

But Europe – which is stricter than the United States when it comes to protecting online consumer privacy – actually wants access to U.S.-based servers and the ability to enforce legal compliance outside Europe. New EU data-privacy rules will also force social networking sites and search engines to withdraw personal data about its users, calling it the “right to be forgotten.”

Viviane Reding, the European commissioner in charge of justice issues, has said “any U.S.-based social network company that has millions of active users in Europe needs to comply with EU rules. To enforce the EU law, national privacy watchdogs shall be endowed with powers to investigate and engage in legal proceedings against non-EU data controllers whose services target EU consumers.”

Is ‘Opting In’ the New Trend?

While some companies struggle to adapt, other companies are finding benefits to the new changes.

For example, Yahoo announced last week that it will offer an opt-out button for cookies in advance of Europe’s new law. However, the plan may not meet all of the EU’s legal requirements. While it will let users manage their cookies, it will also provide a way to “opt-in” to favorite categories, a benefit for the $20-billion-a-year European advertising industry.

Of course Yahoo wants everyone to think “interest-based advertising” is a benefit. But do you? Or do you think it’s just another way to sell your interests to the online advertising world?

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Elaine Rigoli

Elaine Rigoli is PRIVATE WiFi’s manager of digital content strategy.