How the new US privacy law will affect Google, Facebook and the media
While the majority of US residents are focused on the presidential election, Californians will have to make another important decision this November.
The vote will determine whether there will be a new Internet privacy law in the US. We tell you what the new law will change, why votes are important in California, and how the amendments will affect Google and Facebook.
New US privacy: What law are we talking about?
Proposition 24, also known as the California Privacy Rights and Enforcement Act of 2020 (CPRA — California Public Records Act), is intended to expand on an important California privacy law passed two years ago.
There is a strong chance that Californians will approve the new proposal. The amendments are framed as a law that better protects their privacy, in particular sensitive data — such as social Security numbers, race, religion, and health information.
Why will California’s decision affect all states?
While the proposed law technically regulates the use and sale of data for California residents, the state has a huge impact on the technology industry. In fact, this means that the CPRA will become the de facto law for all of the US.
Which, in general, is good for most people, because we are talking about protecting privacy.
In addition, the proposed law will affect the protection of young people, introducing mandatory triple penalties for violations against users under 16 years of age.
It will allow people to restrict the use of geolocation data by third parties, effectively putting an end to practices such as sending targeted ads to people who have visited a rehabilitation center or cancer clinic. According to the law, the authorities will finance the creation of an agency to protect consumer privacy.
But it’s not that simple.
For the media, for example, any new data regulation can create problems. As we know, news publishers already have a lot of well-documented problems. However, the proposed improvements will still help the news industry and here’s why.
Fighting the duopoly of Google and Facebook
From targeted advertising to data personalization on the Internet… At the moment, the two companies dominate data collection and, therefore, all digital advertising.
The big question about any privacy laws is whether they actually create more benefits for Google and Facebook instead of equalizing the rules of the game for smaller competitors.
For example, in Europe, where a new privacy law (GDPR) was put into effect in May 2018, large technology companies were able to effectively neutralize the law by applying half-measures and exploiting loopholes for delays in execution.
The good news for both content consumers and news publishers is that the CPRA is committed to closing any loopholes in the previous privacy law passed in the US two years ago.
In what way?
For starters, the law should more clearly restrict the collection and use of data by third parties — companies that you don’t expect to have access to your data when you visit a news site — while allowing publishers to continue using the data they generate on their sites.
And it makes sense. Consumers usually assume (and hope) that an app or website will collect data about them only for the purpose of improving service, recognizing them as regular visitors, or expertly recommending content.
But they don’t expect unknown third parties to collect data about them to create profiles and display targeted ads on unrelated sites or apps.
This rampant data surveillance by some major tech companies outside of their own user-focused services (namely, the ability of Google and Facebook to track you even when you’re not on their turf) has eroded consumer confidence in the entire digital economy. Allowing consumers to control their own data should, in theory, help restore some of that trust.
How much does the content actually cost
News publishers are also increasingly interested in selling content subscriptions instead of relying on digital advertising.
The CPRA can help with this by allowing publishers to offer subscriptions to consumers who opt out of sharing their data with other parties.
Some critics of the CPRA believe that this provision imposes a price on “privacy”. However, Jason Kint, chief executive of Digital Content Next, a trade association that represents digital content companies, is confident that this gives news publishers the flexibility to choose their own business model. In addition, consumers have the opportunity to understand how content is generally funded.
What else will the new law give? Third parties and liability
Finally, and perhaps most importantly, the CPRA closes loopholes that can be exploited by large tech platforms. For example, when a consumer exercises their right to refuse to provide personal data, and the publisher transfers their choice to all companies with which they work (third parties), these companies must stop reusing this consumer’s data for any other purpose. In essence, this forces these companies to return to the role of a service provider.
Such a system prevents any opportunity for maneuvering companies. In the experience of publishers, in Europe, platforms like Google and Facebook often use their unbalanced negotiating leverage to force publishers to sign up for data rights.
That’s why the new section is extremely important for private publishers, who simply don’t have the leverage to force Google or Facebook to stop mining data.
Finally, the CPRA clarifies that publishers are not responsible for third parties who violate the previous section until they are aware of the violation.
Taken together, these provisions show in practice how data is transmitted in the digital economy. They also hold major technology companies responsible for adapting their data collection methods to consumer preferences.
Imperfect, but unavoidable. How will privacy laws affect the media?
The publishers themselves believe that the CPRA is not perfect, but it is made with the best intentions. And yet, there may be warnings from tech giants that this will harm the media. However, the reason for such statements is clear.
Consumer expectations are evolving; politics and our industry must follow. Yes, there may be some short-term problems as advertisers get used to working with less data and lower the price of the ads they buy. But those who play the long game will be prepared for a world where there is more focus on direct relationships with publishers and consumer trust.
The sensational idea of selling data
Back in 2018, the network actively discussed the new idea of the authorities. According to the possible law, users have the right to receive remuneration for the fact that companies collect and use information about them. It was argued that such a provision could appear in the national program “Digital Economy”.
This should have greatly accelerated the development of the data trading market. And in the end, it is good for the user — the opportunity to earn, and not give away their data for free.