NEWS11 November 2009

EU cookie rule passes, but ad impact still unclear

Europe Government

BELGIUM— The European Union has agreed a package of telecoms reforms which includes new requirements for online advertisers and publishers to gain opt-in consent from users before placing a cookie on an individual’s computer.

Advertising industry representatives have previously warned of potential disruption to the online economy depending on how the rules are interpreted, as cookies are relied on for ad tracking, targeting and audience segmentation purposes.

The text of the amendment to article 5 ( 3 ) of the 2002 European Communities Directive on Privacy and Electronic Communications states, in part, 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/her consent”.

This could be taken to mean that consent is needed for every cookie. Alternatively, it could be that a web user need only have set their browser to accept cookies.

Herein lies the rub for the ad industry, which had hoped to gain more clarity on what the EU’s intentions were before the reforms were agreed. As it is, the EU “has agreed the words, but they have not agreed what they mean,” says Ian Twinn (pictured), director of public affairs for the Incorporated Society of British Advertisers (ISBA).

A more fleshed-out definition is expected with the impending publication of a European Council Declaration, but as the telecoms reform package comes as a directive not a regulation, individual member states might each have their own interpretation of what it means to them – possibly giving rise to a patchwork of different requirements regarding cookie use across the continent.

Twinn said ISBA would be liaising with other representative bodies, including IAB Europe and the World Federation of Advertisers, to try to ensure consistency in how the rules are interpreted throughout Europe.

The telecoms reform package is due to come into force early next year, after which member states will have until May 2011 to transpose the directive into national laws.