Cookie Trouble Brewing on My Side of the Pond

  |  October 26, 2010   |  Comments

How is the recent European E-Privacy Directive affecting the industry and what will the impact be for American organizations?

Over here in Europe, we're having one of those periods where the spotlight is falling on issues around privacy and the use of cookies. It's one of those topics that keeps bubbling under and every now and then erupts. Although I'm not a privacy expert or a lawyer, there have been occasions back in 2008 and 2006 where I've felt sufficiently compelled to tread (somewhat gingerly) into this sensitive debate.

On this side of the Atlantic, the heat is being turned up and it's not clear to me to what extent the digital marketing industry is aware of what's going on or reacting. At the heart of the matter is an amendment to the European E-Privacy Directive that was passed into European law about a year ago. Among other things, the new amendment includes new regulations on the use of cookies and the actual text states that "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…" The way that this is being interpreted in a number of places is that users will have to give their explicit consent to a cookie being dropped on their device. There is provision for cookies that is fundamental to the delivery of the service to be expected, but this leaves tracking cookies of all kinds vulnerable to how this amendment is actually interpreted.

At the time this new amendment didn't receive much attention. However, all 27 member states of the European Union have to embody this amendment into local law by April 2011, which is not that far away. In the case of the U.K., it's not entirely clear how this amendment will be implemented into U.K. law and the government is currently consulting on it. I assume that other European countries are doing likewise and it's inevitable that each country's interpretation will be different from the other depending on their cultural attitudes towards issues such as privacy and data protection. Germany, for example, is a market where these issues are very sensitive and as a result we see things like federal courts trying to get Google Analytics banned or people demanding that their houses are blurred out in Google Street View.

At this stage there are probably more questions than answers about exactly what this directive will mean for the European and U.S. digital marketing industries. How will the directive be interpreted? What is meant by giving consent? How explicit will that consent need to be? For example, if someone visits a website for the first time and the site uses tracking cookies, will they somehow have to "opt in"? Or will there be a default assumption of an opt-in unless someone explicitly opts out? The answers are not clear and there's always the danger that the law will be implemented in such a way that will cause massive problems with organizations' ability to track the effectiveness of their online marketing spends.

At the very least, organizations need to understand the scale of the scope of the potential problem. Many larger organizations have a number of different digital properties operating over multiple digital channels. Multiple cookies may exist on each property and in each channel creating a complex landscape that first of all needs to be understood and then potentially managed. So European companies need to start to prepare for what might be the fast implementation of new practices. They should start by understanding their cookie landscape and then that can be evaluated against the new legal requirements as they emerge. The additional benefits are that this kind of stimulus can provide an opportunity for brands to communicate more effectively what their policies are and that may help to build trust.

What might be the impact for American organizations? This is again not clear at the moment, but it would seem likely to me that any company doing business online in Europe would need to conform to the new directive and potentially this might mean doing it 27 different ways. It's an issue worth putting on your radar.


Neil Mason

Neil Mason is SVP, Customer Engagement at iJento. He is responsible for providing iJento clients with the most valuable customer insights and business benefits from iJento's digital and multichannel customer intelligence solutions.

Neil has been at the forefront of marketing analytics for over 25 years. Prior to joining iJento, Neil was Consultancy Director at Foviance, the UK's leading user experience and analytics consultancy, heading up the user experience design, research, and digital analytics practices. For the last 12 years Neil has worked predominantly in digital channels both as a marketer and as a consultant, combining a strong blend of commercial and technical understanding in the application of consumer insight to help major brands improve digital marketing performance. During this time he also served as a Director of the Web Analytics Association (DAA) for two years and currently serves as a Director Emeritus of the DAA. Neil is also a frequent speaker at conferences and events.

Neil's expertise ranges from advanced analytical techniques such as segmentation, predictive analytics, and modelling through to quantitative and qualitative customer research. Neil has a BA in Engineering from Cambridge University and an MBA and a postgraduate diploma in business and economic forecasting.

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