The Dutch Parliament passed a law Wednesday that forces websites to get explicit consumer consent before they place small text files known as cookies on a computer. The new law was opposed by the online-advertising industry, which fears the legislation will pave the way for similar moves across Europe.
EU officials have said they probably won't challenge the Dutch law, indicating it is unlikely to be overturned and suggesting that industry may have a bigger fight on its hands than it feared.
In November 2010, the EU passed a directive requiring online advertisers to get "informed consent" from users before placing cookies on their computers. Under EU treaty law, countries then had until May to write that rule into their national legislation, but there has been some confusion about exactly how the language had to be interpreted.
"The Dutch law is an important case study because it's such a big market," said Kimon Zorbas, vice president of the Interactive Advertising Bureau Europe, which represents online advertisers. "We would expect companies from our sector to either move their operations to neighboring countries or lose their clients to companies located elsewhere in Europe."
Online advertisers are up in arms. An increasing number of ad campaigns are dependent on cookies, which store data on users and their viewing habits, and the business model could be crippled, they say. "Fifty percent of campaigns in euro volumes might be shut down," said Stephan Noller, chief executive of nugg.ad, an online-advertising consulting company.
In the Netherlands, publishing companies lobbied furiously against the bill, arguing the law exceeds the EU mandate because it includes a provision that websites must prove they have received permission from users to place cookies on their machines. One news portal called nu.nl said it might disappear entirely.
EU regulators will now "carefully assess the Dutch legislation to verify its compliance with the e-privacy directive," said Jonathan Todd, a spokesman for Neelie Kroes, the EU's commissioner for the digital agenda. EU officials in Ms. Kroes's cabinet say they believe the Dutch law is in the spirit of the EU requirement for "informed consent."
That could be bad news for the online-ad industry, because the EU is committed to harmonizing rules. "We all stand to lose from fragmented rules," said Ms. Kroes, speaking Wednesday afternoon in Brussels at a conference on online legal issues.
via online.wsj.com
With the highest broadband penetration in Europe, marketing practise and spend that has migrated substantially online, this news reported today in WSJ, threatens online behavioural advertising in the Netherlands, and might prove to be a key case point of influence for Eastern and Southern EU States in their own local interpretations of the EU Directive, whilst expanding the market opportunity for competing marketing methods that can target and personalise in real-time. Today the Country of Origin principles that exist within the EU permit multinational organisations to move their operations when local laws are not to their taste; but what happens if and when this basic principle is changed to require conformance to Country of Destination laws?
