European Union Eyes Cookie Limits

The Parliament of the European Union is one step closer to restricting the use of cookies and consumer data on the Web, after approving additions to a controversial directive that could mean the end of “opt-out” marketing online.

Originally proposed last year by the European Commission — the EU Parliament’s executive body — the bill was heavily amended on Wednesday to give individual member states greater room to make their own decisions in the matter. As it stands, the amended directive — which is expected to come up for final voting later this year — recommends that countries enact laws prohibiting electronic tracking if users haven’t explicitly agreed to the practice.

“Member States shall prohibit the use of electronic communications networks to store information or to gain access to information stored in the [computer] of a subscriber or user without the prior, explicit consent of the subscriber or user concerned,” the directive reads.

“For the purpose of marketing electronic communications services [marketers] may process the data … to the extent and for the duration necessary for such services or marketing, if the subscriber or user to whom the data relate has given his consent.”

Additionally, the directive stipulates marketers and data-collectors must specify what kinds of data are collected, and for how long they’ll keep the information — before they even ask consumers to participate. As a result, there’s the chance that users would be even more unwilling to opt-in if they’re aware of where their data could end up.

The directive also mandates that the EU return to the issue in three years, after member states have had a chance to enact require opt-in.

To say the least, the implications of such a proposal could be massive, should several European states accept it. It’s also potentially harmful to many Web enterprises seeking to do business in the EU, since major sites, marketers and ad networks typically use opt-out cookies and similar techniques to deliver personalized content and promotions, and to track user behavior.

Additionally, the situation also could serve as a test-case for online privacy laws under consideration closer to home. The U.S. Congress has been knocking around a number of anti-spam and electronic tracking bills for several sessions, though with the change in presidential administration, it’s uncertain whether any soon will see the light of day. (Additionally, in October, the Federal Trade Commission said it wouldn’t pursue new laws on consumer privacy, but would ramp up enforcement of existing laws.)

Still, while the world might be watching, Europe remains far from decided on the issue. This week’s directive itself represents a major compromise after having being shot down and rewritten in earlier sessions.

Additionally, the proposal shied away from regulations regarding unsolicited commercial email, as the Parliament members remained sharply divided on the issue. The directive did prohibit the sending of email marketing messages that lack valid sender or advertiser information, so that consumers can opt-out if desired. Yet several Parliament members took the position that while the directive’s recommendations on opt-in online tracking were justified, an outright ban on spam was overreaching and impractical.

“The Commission has played right into the hands of those who want to drive jobs out of the EU and who pretend that, just because the EU is imposing a ban on sending [unsolicited commercial email] within its territory, such a ban will be respected by people in Japan, the Philippines, the USA or anywhere else,” said member Michael Cashman.

“I myself have been spammed,” he added. “My name has been put on various lists and the spam comes in. That has been done by individuals who have opted me in to the lists held by the spammers. I have a very good option: I have a filter, I have a delete button. We must encourage people to use the technology and stop being their nannies. ”

While it doesn’t address spam and leaves much to the individual states, several Parliamentarians and members of the EU bureaucracy praised the directive — saying that despite its shortcomings, the move was a step in the right direction.

“This House has been discussing the question of opting in or opting out for several years now and [earlier discussions] showed how difficult it still is to find a compromise solution that is acceptable to a broad majority,” said Commission member Erkki Liikanen. “However we cannot hesitate for much longer … There has been huge public international debate with industry, with scientists, with lawyers. I have myself participated in intensive debates in the United States and in Europe on this issue. We can disagree on the details, but if people are asked to pay [for Internet access] they should have a choice beforehand, not afterwards.”