Regulators Eye the Auctions That Decide Which Web Ads You See

July 09 07:00 2019 Print This Article

To facilitate real-time bidding, which involves tens of billions of dollars, user data is made available to up to 2,000 companies

When you load a website, an electronic auction happens in milliseconds to determine which ads show up on your screen.

In that time, hundreds of potential bidders can find out information about you, including your location, birthday, the unique number associated with your mobile device and even whether you have been reading about infectious diseases or right-wing politics.

Privacy regulators in Europe are beginning to scrutinize this process, known as “real-time bidding,” through which tens of billions of dollars flow from advertisers annually around the world.

The U.K.’s Information Commissioner’s Office, the country’s data-protection authority, said real-time ad auctions violate the European Union’s General Data Protection Regulation, which took effect last year. Such auctions involve the collection and distribution of sensitive information about users—including race, sexuality, health status or political leaning—without their explicit consent, the regulator said in a report last month.

In May, Ireland’s Data Protection Commission opened its own investigation into the matter, focusing on Alphabet Inc. ’s Google, the largest player in the global ecosystem of digital advertising. The probe will look at whether each step of a real-time advertising transaction is compliant with the GDPR, the commission said.

Privacy activists have filed complaints about real-time ad auctions in at least six other European Union countries, including Belgium, the Netherlands, Poland and Spain. Poland’s privacy regulator said it passed a complaint about Google along to Ireland’s privacy regulator, which leads EU investigations into Google because that is where the company has its EU headquarters. Belgium’s data-protection office confirmed it received a complaint as well. Privacy regulators in the other countries didn’t respond to requests for comment.

More than $4 billion in ad dollars flowed from advertisers to publishers in the U.K., France and Germany last year, according to estimates from research firm eMarketer.

In the U.S., the sharing of user data during real-time auctions has received less scrutiny, but it has been a topic of conversation in recent hearings on privacy policy held by the Federal Trade Commission. About $20.7 billion in ad dollars flowed through real-time bidding in the U.S. last year, according to eMarketer.

It isn’t clear whether regulators in the U.K. or elsewhere will take action to curb real-time bidding or restrict the flow of user data in any way. But the recent scrutiny marks a significant shift for regulators, who until now have focused more on a handful of cases involving large tech companies.

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GDPR Associates
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