GDPR will help, not hinder, Facebook and Google, competitors say
- Google and Facebook might have an advantage over smaller ad tech firms once the European Union's General Data Protection Regulation (GDPR) rules go into effect on May 25, according to a report in The Wall Street Journal. This is because Facebook and Google have large-scale, sophisticated solutions to easily obtain user consent in large-population areas like Europe and are also more immediately recognized by consumers in having a direct relationship with them, whereas ad tech firms operate in a less visible role behind the scenes, embedding their technology into other publishers and apps' platforms.
- Competitors said that Facebook and Google are additionally applying a strict interpretation of GDPR laws, and since the two are the world's largest digital advertising platforms, this will create an industry standard that's difficult for smaller companies to adhere to, per the Journal. Publishers are worried as well, in that they might struggle to sell targeted digital ads in a limited marketplace and will be forced to turn to Google and Facebook, which they also often compete with. Google and Facebook are projected to take nearly half of all digital ad spend worldwide in 2018, according to eMarketer.
- Some of the duopoly's competitors are taking countermeasures. The German media giant Axel Springer, which owns brands like Business Insider, and Norwegian media group Schibsted joined forces with AppNexus to endorse the IAB Transparency and Consent Framework in preparation for GDPR implementation, per news made available to Marketing Dive. By partnering with AppNexus as their ad server, both are pushing back against Google's GDPR solution and are supporting the creation a more flexible framework for the industry.
GDPR is intended to protect users' data privacy by ensuring they offer informed consent before internet companies collect information on them, and some of the speculation heading into the rollout of the rules was that they would potentially level the playing field with tech giants like Facebook and Google, which are facing increasing scrutiny in terms of how they access and share user data. The EU has also been far tougher on these companies than U.S. regulators have been, hitting Google with a record $2.7 billion antitrust fine last year.
However, the news shows that attempts in trying to rein in some of the influence Google and Facebook wield through GDPR might actually backfire, and instead harm smaller tech firms that don't necessarily have the same budgets or bandwidth. There have been other signs of trouble on this front recently. Some ad tech companies, including the mobile marketing platform Verve, have announced plans to pull out of European operations altogether over concerns about the onerous nature of meeting with GDPR compliance.
Google has said that it will support non-targeted ads as part of its GDPR compliance. Facebook will ask users to review information about how it uses their data and how they give the platform permission to target ads. Facebook has also said that it is extending its GDPR permissions to users worldwide as it works to improve privacy and transparency on its platform.