Pay for Privacy? The Meta-EU Tussle to Balance Privacy and Advertising

Aditi Pangotra and Dr. Brinda Banerjee

Tech Policy and Research,CyberPeace

PUBLISHED ON

Oct 3, 2024

Introduction

Privacy has become a concern for netizens and social media companies have access to a user’s data and the ability to use the said data as they see fit. Meta’s business model, where they rely heavily on collecting and processing user data to deliver targeted advertising, has been under scrutiny. The conflict between Meta and the EU traces back to the enactment of GDPR in 2018. Meta is facing numerous fines for not following through with the regulation and mainly failing to obtain explicit consent for data processing under Chapter 2, Article 7 of the GDPR. ePrivacy Regulation, which focuses on digital communication and digital data privacy, is the next step in the EU’s arsenal to protect user privacy and will target the cookie policies and tracking tech crucial to Meta's ad-targeting mechanism. Meta’s core revenue stream is sourced from targeted advertising which requires vast amounts of data for the creation of a personalised experience and is scrutinised by the EU.

Pay for Privacy Model and its Implications with Critical Analysis

Meta came up with a solution to deal with the privacy issue - ‘Pay or Consent,’ a model that allows users to opt out of data-driven advertising by paying a subscription fee. The platform would offer users a choice between free, ad-supported services and a paid privacy-enhanced experience which aligns with the GDPR and potentially reduces regulatory pressure on Meta.

Meta presently needs to assess the economic feasibility of this model and come up with answers for how much a user would be willing to pay for the privacy offered and shift Meta’s monetisation from ad-driven profits to subscription revenues. This would have a direct impact on Meta’s advertisers who use Meta as a platform for detailed user data for targeted advertising, and would potentially decrease ad revenue and innovate other monetisation strategies.

For the users, increased privacy and greater control of data aligning with global privacy concerns would be a potential outcome. While users will undoubtedly appreciate the option to avoid tracking, the suggestion does beg the question that the need to pay might become a barrier. This could possibly divide users between cost-conscious and privacy-conscious segments. Setting up a reasonable price point is necessary for widespread adoption of the model.

For the regulators and the industry, a new precedent would be set in the tech industry and could influence other companies’ approaches to data privacy. Regulators might welcome this move and encourage further innovation in privacy-respecting business models.

The affordability and fairness of the ‘pay or consent’ model could create digital inequality if privacy comes at a digital cost or even more so as a luxury. The subscription model would also need clarifications as to what data would be collected and how it would be used for non-advertising purposes. In terms of market competition, competitors might use and capitalise on Meta’s subscription model by offering free services with privacy guarantees which could further pressure Meta to refine its offerings to stay competitive. According to the EU, the model needs to provide a third way for users who have ads but are a result of non-personalisation advertising.

Meta has further expressed a willingness to explore various models to address regulatory concerns and enhance user privacy. Their recent actions in the form of pilot programs for testing the pay-for-privacy model is one example. Meta is actively engaging with EU regulators to find mutually acceptable solutions and to demonstrate its commitment to compliance while advocating for business models that sustain innovation. Meta executives have emphasised the importance of user choice and transparency in their future business strategies.

Future Impact Outlook

The Meta-EU tussle over privacy is a manifestation of broader debates about data protection and business models in the digital age.
The EU's stance on Meta’s ‘pay or consent’ model and any new regulatory measures will shape the future landscape of digital privacy, leading to other jurisdictions taking cues and potentially leading to global shifts in privacy regulations.
Meta may need to iterate on its approach based on consumer preferences and concerns. Competitors and tech giants will closely monitor Meta’s strategies, possibly adopting similar models or innovating new solutions. And the overall approach to privacy could evolve to prioritise user control and transparency.

Conclusion

Consent is the cornerstone in matters of privacy and sidestepping it violates the rights of users. The manner in which tech companies foster a culture of consent is of paramount importance in today's digital landscape. As the exploration by Meta in the ‘pay or consent’ model takes place, it faces both opportunities and challenges in balancing user privacy with business sustainability. This situation serves as a critical test case for the tech industry, highlighting the need for innovative solutions that respect privacy while fostering growth with the specificity of dealing with data protection laws worldwide, starting with India’s Digital Personal Data Protection Act, of 2023.

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PUBLISHED ON

Oct 3, 2024

Related Blogs

Prohibition of Behavioral Tracking and Targeted Advertising for Children Under the DPDP Act, 2023

July 11, 2024

Introduction

In India, the rights of children with regard to protection of their personal data are enshrined under the Digital Personal Data Protection Act, 2023 which is the newly enacted digital personal data protection law of India. The DPDP Act requires that for the processing of children's personal data, verifiable consent of parents or legal guardians is a necessary requirement. If the consent of parents or legal guardians is not obtained then it constitutes a violation under the DPDP Act. Under section 2(f) of the DPDP act, a “child” means an individual who has not completed the age of eighteen years.

Section 9 under the DPDP Act, 2023

With reference to the collection of children's data section 9 of the DPDP Act, 2023 provides that for children below 18 years of age, consent from Parents/Legal Guardians is required. The Data Fiduciary shall, before processing any personal data of a child or a person with a disability who has a lawful guardian, obtain verifiable consent from the parent or the lawful guardian. Section 9 aims to create a safer online environment for children by limiting the exploitation of their data for commercial purposes or otherwise. By virtue of this section, the parents and guardians will have more control over their children's data and privacy and they are empowered to make choices as to how they manage their children's online activities and the permissions they grant to various online services.

Section 9 sub-section (3) specifies that a Data Fiduciary shall not undertake tracking or behavioural monitoring of children or targeted advertising directed at children. However, section 9 sub-section (5) further provides room for exemption from this prohibition by empowering the Central Government which may notify exemption to specific data fiduciaries or data processors from the behavioural tracking or target advertising prohibition under the future DPDP Rules which are yet to be announced or released.

Impact on social media platforms

Social media companies are raising concerns about Section 9 of the DPDP Act and upcoming Rules for the DPDP Act. Section 9 prohibits behavioural tracking or targeted advertising directed at children on digital platforms. By prohibiting intermediaries from tracking a ‘child's internet activities’ and ‘targeted advertising’ - this law aims to preserve children's privacy. However, social media corporations contended that this limitation adversely affects the efficacy of safety measures intended to safeguard young users, highlighting the necessity of monitoring specific user signals, including from minors, to guarantee the efficacy of safety measures designed for them.

Social media companies assert that tracking teenagers' behaviour is essential for safeguarding them from predators and harmful interactions. They believe that a complete ban on behavioural tracking is counterproductive to the government's objectives of protecting children. The scope to grant exemption leaves the door open for further advocacy on this issue. Hence it necessitates coordination with the concerned ministry and relevant stakeholders to find a balanced approach that maintains both privacy and safety for young users.

Furthermore, the impact on social media platforms also extends to the user experience and the operational costs required to implement the functioning of the changes created by regulations. This also involves significant changes to their algorithms and data-handling processes. Implementing robust age verification systems to identify young users and protect their data will also be a technically challenging step for the various scales of platforms. Ensuring that children’s data is not used for targeted advertising or behavioural monitoring also requires sophisticated data management systems. The blanket ban on targeted advertising and behavioural tracking may also affect the personalisation of content for young users, which may reduce their engagement with the platform.

For globally operating platforms, aligning their practices with the DPDP Act in India while also complying with data protection laws in other countries (such as GDPR in Europe or COPPA in the US) can be complex and resource-intensive. Platforms might choose to implement uniform global policies for simplicity, which could impact their operations in regions not governed by similar laws. On the same page, competitive dynamics such as market shifts where smaller or niche platforms that cater specifically to children and comply with these regulations may gain a competitive edge. There may be a drive towards developing new, compliant ways of monetizing user interactions that do not rely on behavioural tracking.

CyberPeace Policy Recommendations

A balanced strategy should be taken into account which gives weightage to the contentions of social media companies as well as to the protection of children's personal information. Instead of a blanket ban, platforms can be obliged to follow and encourage openness in advertising practices, ensuring that children are not exposed to any misleading or manipulative marketing techniques. Self-regulation techniques can be implemented to support ethical behaviour, responsibility, and the safety of young users’ online personal information through the platform’s practices. Additionally, verifiable consent should be examined and put forward in a manner which is practical and the platforms have a say in designing the said verification. Ultimately, this should be dealt with in a manner that behavioural tracking and targeted advertising are not affecting the children's well-being, safety and data protection in any way.

Final Words

Under section 9 of the DPDP Act, the prohibition of behavioural tracking and targeted advertising in case of processing children's personal data - will compel social media platforms to overhaul their data collection and advertising practices, ensuring compliance with stricter privacy regulations. The legislative intent behind this provision is to enhance and strengthen the protection of children's digital personal data security and privacy. As children are particularly vulnerable to digital threats due to their still-evolving maturity and cognitive capacities, the protection of their privacy stands as a priority. The innocence of children is a major cause for concern when it comes to digital access because children simply do not possess the discernment and caution required to be able to navigate the Internet safely. Furthermore, a balanced approach needs to be adopted which maintains both ‘privacy’ and ‘safety’ for young users.

References

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Unravelling AI-Generated Misinformation in the 'Delhi Chalo' Farmers' Protest

February 23, 2024

Introduction

A photo circulating on social media depicting modified tractors is being misrepresented as part of the 'Delhi Chalo' farmers' protest narrative. In the recent swirl of misinformation surrounding the 'Delhi Chalo' farmers' protest. A photo, ostensibly showing a phalanx of modified tractors, has been making the rounds on social media platforms, falsely tethered to the ongoing protests. This image, accompanied by a headline suggesting a mechanical metamorphosis to resist police barricades, was allegedly published by a news agency. However, beneath the surface of this viral phenomenon lies a more complex and fabricated reality.

The Movement

The 'Delhi Chalo' movement, a clarion call that resonated with thousands of farmers from the fertile plains of Punjab, the verdant fields of Haryana, and the sprawling expanses of Uttar Pradesh, has been a testament to the agrarian community's demand for assured crop prices and legal guarantees for the Minimum Support Price (MSP). The protest, which has seen the fortification of borders and the chaos at the Punjab-Haryana border on February 13, 2024, has become a crucible for the farmers' unyielding spirit.

Yet, amidst this backdrop of civil demonstration and discourse, a nefarious narrative of misinformation has taken root. The viral image, which has been shared with the fervour of wildfire, was accompanied by a screenshot of an article allegedly published by the news agency. This article, dated February 11, 2024, quoted an anonymous official who claimed that intelligence agencies had alerted the police to the protesters' plans to outfit tractors with hydraulic tools. The implication was clear: these machines had been transformed into battering rams against the bulwark of law enforcement.

The Pursuit of Truth

However, the India TV Fact Check team, in their relentless pursuit of truth, unearthed that the viral photo of these so-called modified tractors is nothing but a chimerical creation, a figment of artificial intelligence. Visual discrepancies betrayed its AI-generated nature.

This is not the first time that the misinformation has loomed over the farmers' protest. Previous instances, including a viral video of a modified tractor, have been debunked by the same fact-checking team. These efforts are a bulwark against the tide of false narratives that seek to muddy the waters of public understanding.

The claim that the photo depicted modified tractors intended for use in the ‘Delhi Chalo’ farmers' protest rally in Delhi on February 13, 2024, was a mirage.

The Fact Check

OpIndia, in their article, clarified that the photo used was a representative image created by AI and not a real photograph. To further scrutinize this viral photo, the HIVE AI detector tool was employed, indicating a 99.4% likelihood of the image being AI-generated. Thus, the claim made in the post was misleading.

The viral photo claiming that farmers had modified their tractors to avoid tear gas shells and remove barricades put up by the police during the rally was a digital illusion. The internet has become a fertile ground for the rapid spread of misinformation, reaching millions in an instant. Social media, with its complex algorithms, amplifies this spread, as any interaction, even those intended to debunk false information, inadvertently increases its reach. This phenomenon is exacerbated by 'echo chambers,' where users are exposed to a homogenous stream of content that reinforces their pre-existing beliefs, making it difficult to encounter and consider alternative perspectives.

Conclusion

The viral image depicting modified tractors for the ‘Delhi Chalo’ farmers' protest rally was a digital fabrication, a testament to the power of AI in creating convincing yet false narratives. As we navigate the labyrinth of information in the digital era, it is imperative to remain vigilant, to question the veracity of what we see and hear, and to rely on the diligent work of fact-checkers in discerning the truth. The mirage of modified machines serves as a stark reminder of the potency of misinformation and the importance of critical thinking in the age of artificial intelligence.

References

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Addressing Cross-Border Misinformation: The Need for International Cooperation

October 29, 2024

Misinformation is a scourge in the digital world, making the most mundane experiences fraught with risk. The threat is considerably heightened in conflict settings, especially in the modern era, where geographical borders blur and civilians and conflict actors alike can take to the online realm to discuss -and influence- conflict events. Propaganda can complicate the narrative and distract from the humanitarian crises affecting civilians, while also posing a serious threat to security operations and law and order efforts. Sensationalised reports of casualties and manipulated portrayals of military actions contribute to a cycle of violence and suffering.

A study conducted by MIT found the mere thought of sharing news on social media reduced the ability to judge whether a story was true or false; the urge to share outweighed the consideration of accuracy (2023). Cross-border misinformation has become a critical issue in today's interconnected world, driven by the rise of digital communication platforms. To effectively combat misinformation, coordinated international policy frameworks and cooperation between governments, platforms, and global institutions are created.

The Global Nature of Misinformation

Cross-border misinformation is false or misleading information that spreads across countries. Out-of-border creators amplify information through social media and digital platforms and are a key source of misinformation. Misinformation can interfere with elections, and create serious misconceptions about health concerns such as those witnessed during the COVID-19 pandemic, or even lead to military conflicts.

The primary challenge in countering cross-border misinformation is the difference in national policies, legal frameworks and governance policies of social media platforms across various jurisdictions. Examining the existing international frameworks, such as cybersecurity treaties and data-sharing agreements used for financial crimes might be helpful to effectively address cross-border misinformation. Adapting these approaches to the digital information ecosystem, nations could strengthen their collective response to the spread of misinformation across borders. Global institutions like the United Nations or regional bodies like the EU and ASEAN can work together to set a unified response and uniform international standards for regulation dealing with misinformation specifically.

Current National and Regional Efforts

Many countries have taken action to deal with misinformation within their borders. Some examples include:

The EU’s Digital Services Act has been instrumental in regulating online intermediaries and platforms including marketplaces, social networks, content-sharing platforms, app stores, etc. The legislation aims to prevent illegal and harmful activities online and the spread of disinformation.
The primary legislation that governs cyberspace in India is the IT Act of 2000 and its corresponding rules (IT Rules, 2023), which impose strict requirements on social media platforms to counter misinformation content and enable the traceability of the creator responsible for the origin of misinformation. Platforms have to conduct due diligence, failing which they risk losing their safe harbour protection. The recently-enacted DPDP Act of 2023 indirectly addresses personal data misuse that can be used to contribute to the creation and spread of misinformation. Also, the proposed Digital India Act is expected to focus on “user harms” specific to the online world.
In the U.S., the Right to Editorial Discretion and Section 230 of the Communications Decency Act place the responsibility for regulating misinformation on private actors like social media platforms and social media regulations. The US government has not created a specific framework addressing misinformation and has rather encouraged voluntary measures by SMPs to have independent policies to regulate misinformation on their platforms.

The common gap area across these policies is the absence of a standardised, global framework for addressing cross-border misinformation which results in uneven enforcement and dependence on national regulations.

Key Challenges in Achieving International Cooperation

Some of the key challenges identified in achieving international cooperation to address cross-border misinformation are as follows:

Geopolitical tensions can emerge due to the differences in political systems, priorities, and trust issues between countries that hinder attempts to cooperate and create a universal regulation.
The diversity in approaches to internet governance and freedom of speech across countries complicates the matters further.
Further complications arise due to technical and legal obstacles around the issues of sovereignty, jurisdiction and enforcement, further complicating matters relating to the monitoring and removal of cross-border misinformation.

CyberPeace Recommendations

The UN Global Principles For Information Integrity Recommendations for Multi-stakeholder Action, unveiled on 24 June 2024, are a welcome step for addressing cross-border misinformation. This can act as the stepping stone for developing a framework for international cooperation on misinformation, drawing inspiration from other successful models like climate change agreements, international criminal law framework etc.
Collaborations like public-private partnerships between government, tech companies and civil societies can help enhance transparency, data sharing and accountability in tackling cross-border misinformation.
Engaging in capacity building and technology transfers in less developed countries would help to create a global front against misinformation.

Conclusion

We are in an era where misinformation knows no borders and the need for international cooperation has never been more urgent. Global democracies are exploring solutions, both regulatory and legislative, to limit the spread of misinformation, however, these fragmented efforts fall short of addressing the global scale of the problem. Establishing a standardised, international framework, backed by multilateral bodies like the UN and regional alliances, can foster accountability and facilitate shared resources in this fight. Through collaborative action, transparent regulations, and support for developing nations, the world can create a united front to curb misinformation and protect democratic values, ensuring information integrity across borders.

Pay for Privacy? The Meta-EU Tussle to Balance Privacy and Advertising

Introduction

Pay for Privacy Model and its Implications with Critical Analysis

Future Impact Outlook

Conclusion

Reference:

Related Blogs

Introduction

Section 9 under the DPDP Act, 2023

Impact on social media platforms

CyberPeace Policy Recommendations

Final Words

References

Introduction

The Movement

The Pursuit of Truth

The Fact Check

Conclusion

References

The Global Nature of Misinformation

Current National and Regional Efforts

Key Challenges in Achieving International Cooperation

Conclusion

References

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