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2020 Update: Data-Driven Online Targeting

Introduction

We have all experienced it: you were looking up a new shower curtain for your bathroom and now you are seeing ads for shower curtains on all websites and social media you visit. This is targeted personal advertising. You receive a recommendation for a job advertisement that suits your experience or a news article that correlates with your political beliefs. These are likely to have been sent by a targeted content recommendation system.

Data-driven online targeting has rapidly grown and in its wake has raised legal queries that have caught the attention of regulators and lawmakers. This article provides an update on how online targeting has increased, the key concerns that have arisen out of its rapid expansion and analyses today’s regulatory climate.

Growth of data-driven online targeting

Online targeting systems aggregate data from multiple online sources to attempt to provide users with a targeted, relevant and personalised experience. This use of data has formed the basis of the business models for companies including Google, Facebook and YouTube, who rely on advertising revenue to be able to provide customers with a free platform, see here for more detail.

There has been an increase in online targeting as new technologies enable companies to more accurately profile and target individuals online. We are only getting glimpses of how influential this new technology could be, for example:

Targeted advertising: In 2018, Google and Facebook (combined) generated an estimated 61% of the UK’s online advertising revenue according to a report on ‘Online advertising in the UK’ by Plum Consulting in 2019 (commissioned by the Department for Digital, Culture, Media and Sport).

Recommended content: 35% of purchases on Amazon, 70% of views on YouTube and 80% of all user engagement on Pinterest originated from recommendations shown to users through data-driven online targeting (information collated in the CDEI report detailed below).

The Centre for Data Ethics and Innovation (“CDEI”), an independent advisory body set up by the UK Government to investigate and advise on data driven technologies, released its final report on online targeting on 4th February 2020. The report found that the ‘direction of travel is towards more sophisticated, and intrusive, predictions, and an increased role for targeting technologies.’ However, with this increased use there is also a growing concern for the possible negative impacts.

Concerns

While online targeting has gained traction, it has also gained regulatory attention. Reports published by the Joint Committee on Human Rights (“The Right to Privacy and the Digital Revolution”), Information Commission’s Office (“Report into adtech and real time bidding”), Competition and Market Authority’s (enquiry into online platforms and digital advertising, due 2nd July 2020), Department of Digital, Culture, Media & Sport (“Online Harms White Paper”) and the CDEI have all touched on the impact of online targeting and provided recommendations on how it should be managed and/or regulated. Tech UK has stated that this is a ‘crowded space for recommendations’ and alongside the CDEI have advocated for a coherent and coordinated approach across the current and future regulatory landscapes.

There are existing governance regimes and codes of practice to tackle to issues identified, such as the Data Protection Act 2018. However, there are gaps within existing regulation, which do not effectively manage fast-pasted technology developments and businesses utilising those technologies for data-driven online targeting.

The CDEI reported that online targeting systems are operating without sufficient control, transparency or accountability. The report identifies a number of potential harms (although admits they are difficult to quantify due to the lack of transparency) including the erosion of autonomy, the exploitation of individual’s vulnerabilities, the potential undermining of democracy and society (for example, the power to influence the way people vote) and an increase in discrimination, which we previously discussed here.

So, what does this all mean?

Things are going to change, it is just a matter of how quickly and to what degree. CDEI’s research found that the public attitude is positive towards the conveniences of online targeting but people were concerned when they were told about the prevalence and sophistication of data-driven online targeting.

The CDEI have produced three key recommendations including actions to increase accountability, transparency and user empowerment. The government has committed to responding to the recommendations within six months. The CDEI report is one of many closely linked government workstreams looking into aspects of online targeting, including the planned Online Harms Bill, review of online advertising regulation and the governments announcements on electoral integrity. 2020 will be a year of consideration and collaboration amongst regulators and lawmakers to consider the best way forward to reduce the potential harm of data-driven online targeting while utilising and encouraging the benefits.

Our thinking

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