GDPR Actually strengthening the Google / Facebook hegemony?
As everyone is well aware, Europe’s new privacy protection law, the General Data Protection Regulation, or GDPR, will come in force on May 25th. GDPR requires every company in the digital advertising sector, from online publishers to the analytics firms, data brokers and buying platforms that use personal data to aim ads at individuals in real time, to obtain affirmative consent from European residents to utilize their personal data in advertising.
This obviously is a big hassle, as every advertising company targeting Europe now requires every person to give his/her consent. A personalized ad cannot be shown if consent is not given. Fines are quite hefty, especially for small companies, starting at 20m Euro.
Imagine going to your favorite website and being prompted to give a company called AdUX consent to use your personal info to show you personalized adds while you surf. Would you click Yes?
Then imagine going to Facebook and being prompted to give consent. Or wanting to Google something, and then being prompted to give consent. Yes?
The answer is painstakingly clear, and herein lies the biggest problem. Consumers are going to say “No” to small B2B companies they’ve never heard of, such as AdUX, and are much more willing to give their consent to Facebook and Google. Most users of Facebook and Google have been prompted already and have probably clicked yes without giving it much thought.
Also consider the advertisers, who now maybe work with a few different B2B companies. They will see their ad-revenue drop if consumers deny companies like AdUX access. It is likely they will pre-empt this and redirect more money towards the big players.
The big ad platforms such as Google and Facebook are leveraging their scale and sophistication in seeking consent. Next to that they are also applying a relatively strict interpretation to the new law, setting a high bar for the new industry standard, which is hard to meet for the smaller players.
From this you can only conclude that GDPR actually increases the power and market share of Facebook and Google.