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Cookie Consent and Ad Tech Regulations Take Center Stage

Annie Greenley-Giudici

UK ICO and French CNIL Increase Activity Around Cookie Consent Practices

Perhaps the only thing higher than temperatures this summer in the European Union is the level of regulatory attention being paid to data-driven advertising and website cookie practices (including similar tracking technologies within mobile applications and other non-browser environments, collectively referred to here as “cookies”).

UK ICO Report on Ad Tech, RTB, and Privacy

First, the United Kingdom’s Information Commissioner’s Office (ICO) released an “Update Report Into Ad Tech and Real Time Bidding,” concluding that advertising technology-related entities and those involved in real-time bidding (RTB) should reassess their privacy notices, lawful processing bases, and personal data uses and sharing in light of the GDPR.

However, many have not to this point.

The ICO is evaluating practices within the advertising industry, keeping with the view announced in its 2018-2021 Technology Strategy that web and cross-device tracking is one of its three “priority areas” for the current period.  The report’s findings:

  • pointed out deficiencies in publishers’ transparency practices, such as not specifically naming third-party recipients of personal data collected based on consent;
  • adjudged that “special categories” of personal data included in targeted programmatic auction bid requests (e.g., inferred ethnic, health, sexual orientation, or political audience segments associated with a specific cookie or other unique identifiers bid on by advertisers) are regularly being processed unlawfully by ad tech companies due to failure to obtain explicit consent from data subjects;
  • clarified that consent–rather than legitimate interests–is not only required for the placement or accessing of cookies or similar tracking technologies on an end user’s device (under the U.K.’s PECR rules implementing the EU’s “ePrivacy” Directive), but is also generally the appropriate lawful processing basis for the real-time bidding transactions that underpin the programmatic auctions between buyers and sellers of ad spaces for targeted advertising; and
  • noted that “the ICO has published [pursuant to GDPR Article 35(4)] a list of processing operations likely to result in…high risk, for which [Data Protection Impact Assessments] are mandatory, [and] RTB matches a number of examples on this list,” resulting in the conclusion that RTB-involved “organizations are therefore legally required to perform DPIAs.”

The ICO’s report identified areas where it has concerns and expects to see changes, but it also articulated a recognition that the ad tech sector is “an extremely complex environment” that does not change overnight.

With this in mind, the ICO indicated that it seeks to “take a measured and iterative approach, before undertaking a further industry review in six months’ time.”

CNIL’s Change of Consent Interpretation and Timeline

Next, the French privacy regulator, the CNIL, announced on June 28th that in light of a rise in complaints and requests related to online marketing, it has devised an action plan for the next year making “targeted online advertising a priority topic for 2019.”

Part of this plan will be the release of new guidelines that will rescind the CNIL’s 2013 interpretation that continued navigation of a website could be understood as an expression of an end user’s consent to the placement of website cookies or similar tracking technologies.

The CNIL indicated that it will give stakeholders a transitional period of 12 months during which “scrolling down, browsing or swiping through a website or application will still be considered by the CNIL as acceptable.”

Still, the CNIL will regularly investigate matters of transparency, withdrawal of consent, security obligations and more, including instances when cookies are impermissibly set before consent is collected for ePrivacy purposes.

The CNIL’s calendar lists its tentative schedule for cookie-related matters as follows:

  • May – June 2019: Update of the CNIL standards to align with the GDPR (i.e., update of the CNIL’s 2013 interpretation of consent for cookies);
  • June – Sept 2019: Stakeholder working group to test the operational consistency of the guidelines;
  • November 2019: Results of work
  • End of 2019 – Early 2020: Publication of new guidelines for cookies
  • June – July 2020: End of the grace period, entities must comply with the rules of the new guidelines.

UK ICO’s New Guidance on Cookies

On July 3rd, the ICO regulator announced that it had published new, detailed guidance covering the use of cookies and similar tracking technologies on websites and other terminal equipment.

The ICO’s guidance is intended to facilitate compliance with the Privacy and Electronic Communications Regulations (PECR) and the GDPR. Firstly setting forth the distinctions and relationship between those legal regimes, and further providing context and nuance around cookies, consent, and transparency.

Cookie Consent and Transparency

The ICO’s guidance confirms that if using cookies, the operator of an online service must inform users of what cookies will be set, explain what the cookies do, and obtain consent to storing cookies on a device before doing so.

Moreover, if using any third party cookies, the operator must clearly and specifically name who the third parties are and explain what they will do with the information.

Exempted from these requirements are cookies needed to transmit a communication over an electronic communications network, as well as cookies that are “strictly necessary” to provide a service or site requested by the user.

Lawful Processing Basis

Whereas PECR addresses the storing or accessing of information on users’ browsers and devices by requiring consent as a prerequisite to doing so, the GDPR (and its six possible lawful processing bases under Article 6) governs the processing of any personal data gained from cookies.

In its guidance, the ICO recognizes that “it may be possible to rely on an alternative lawful basis for subsequent processing beyond the setting of any cookies,” but separately states that, “trying to apply another lawful basis such as legitimate interests when you already have GDPR-compliant consent would be an entirely unnecessary exercise, and would cause confusion for your users.” 

The regulator noted that any data processing involving analyzing or predicting preferences or behavior, or tracking and profiling for direct marketing and advertising purposes, will in most cases require consent as the lawful processing basis.

Also confirmed is that “consent is necessary for first-party analytics cookies, even though they might not appear to be as intrusive as others that might track a user across multiple sites or devices.”

Although the ICO concedes that the setting of a first party analytics cookie “results in a low level of intrusiveness and low risk of harm to individuals,” and that “it is unlikely that priority for any formal action would be given” to such instances.

Cookie Audits and Banners

The ICO also emphasizes the utility of performing comprehensive “cookie audits” to detail what cookies are being used on a site and to discern which of them comprise “strictly necessary” first and third party cookies versus those which do not.

The guidance likewise addresses forms of notice and means of consent, including prominently displayed cookie banners that provide clear information about cookies and user control options to allow or disallow those that are non-essential.

It further notes that the blanket use of “cookie walls,” which require users to agree or accept the setting of non-strictly necessary cookies before the user can access the rest of the site’s content, will generally amount to invalid consent because the user lacks a genuine choice other than to acquiesce in order to use the site.

Lastly, the ICO declined to specify how often consent should be obtained from users, noting that this is dependent on a number of factors such as frequency of visitors or updates of content or functionality.

Cookie Consent and Real-Time Bidding FAQs

What do the new ICO and CNIL guidance around cookie consent and real-time bidding mean for your business? These are the questions you wanted answered:

How to control all these third parties on our website?

Yes, indeed. First, identify all first and third-party trackers present on your website. Next, understand how they arrived within your digital property in the first place (e.g., with your permission versus “daisy-chaining”).

If you have contracts in place, review those and any underlying contracts with the unaffiliated entities. It’s helpful to categorize the cookies/trackers according to what they do for your digital property.

Lastly, use Cookie Consent Manager with a tag management system or your API to not allow their loading until a user consents.

What are EU regulators’ views on “cookie walls” that require consent to advertising cookies to access a site?

The UK ICO generally disfavors cookies walls when employing a “take it or leave it approach” because this generally results in consent not being freely given. That said, the ICO did leave the door open slightly for cookie walls used to access specific website content rather than as a prerequisite to general site access.

The Dutch supervisory authority, on the other hand, has wholly endorsed the view that obstacles that prevent an end user from interacting with a website unless that user first affirmatively consents to the dropping of non-strictly necessary cookies or firing of other tracking technologies equate to the consent being invalid.

The Dutch regulator in March 2019 indicated that it will intensify the verification of correct compliance and has already sent several specific parties a letter about this, suggesting that with that notice now enunciated, enforcement action is likely to follow.

Should the consumer at the end of an Internet session automatically revoke cookie consent?

That’s technically possible, such as by requesting an opt-out for all cookies or by altering one’s browser settings, but in practice for persistent (i.e., non-session) cookies that’s probably not scalable for most consumers given how many websites they visit.

Under the California Consumer Privacy Act (CCPA), aren’t even cookie data, inferred interests and behavior “personal information”?

The definition for PI under the CCPA is very broad–arguably more expansive than the GDPR.

In addition to including inferences drawn to create a profile about a consumer reflecting the consumer’s preferences, behavior, attitudes and abilities, the CCPA’s PI definition also includes IP address, unique personal identifiers and browser search history.

Have you taken the EU court ruling of 29.07.19 into consideration already?

EU court ruling 29.07.19 is also known as the Fashion ID case. The Court of Justice of the European Union found a joint controller relationship between Facebook and operators using its “Like” button on their website–but only with respect to the collection and transmission of website visitor data to Facebook, not with respect to subsequent processing.

Although we continue to monitor how the implications of this complex matter may be further understood, the ECJ seems to have clarified that websites using widgets or social media plug-ins must transparently inform end users of this and request consent in advance of sending PI to such third party recipients.

You indicated that ePrivacy (U.K. PECR) requires GDPR-level prior consent from an end user to access or store information on the user’s device using cookies or similar technologies.

Does using a cookie tool to store EU site visitors’ consent preferences break this requirement?

The ICO has clarified that exemptions to the consent requirement do exist for its PECR regulations that transpose the ePrivacy Directive into U.K. law.  TrustArc’s dynamic Cookie Consent Manager solution was built to help organizations provide notice, offer meaningful choice and remember users’ cookie preferences within a browser.

In its recent guidance, the ICO noted that “user preference,” when coupled with proper purpose limitation, can form the basis for such an exemption, including in the context of a cookie consent mechanism.

It further clarified that “the act of interacting with the consent mechanism can be sufficient for consent to be obtained for any cookies relating to that mechanism, provided the user is given clear and comprehensive information as to the fact that a persistent cookie will be set on their device for the purpose of remembering their cookie consent preference.”

If I’m running A/B tests on a website, do I need to ask for consent to the users based on ICO guidance?

If the A/B tests are running on a website targeted at EU visitors, and the tests involve cookies or similar tracking technologies that access or store information on the user’s browser or mobile device, then absent a documented exemption considered with counsel, it is likely that consent for ePrivacy/PECR purposes would need to be obtained prior to such access or storage.

If I am a data collector, but the personal data unequivocally will not be used for any marketing or sales purposes, do you feel a notification of cookies is sufficient? Or is a separate active consent still a necessity?

Regardless of the purpose, for ePrivacy Directive compliance, consent is likely needed to access or store information on a user’s browser or device unless an exemption applies.

It’s possible to assert a different lawful basis, such as legitimate interests, to process any subsequent information derived from the cookies or trackers for which you obtained ePrivacy consent, but this is a nuanced determination that should only be made when fully understood with legal counsel.

Will real-time bidding procedures be considered a “sale” under the CCPA?  How are cookie issues impacted by CCPA?

These are good questions that are not entirely clear from the text of the CCPA, and which intersect with areas where guidance from the California Attorney General is highly sought after.

Given the breadth of the definition of “sell” or “sale” under the CCPA, which includes disclosing, disseminating, making available or transferring “a consumer’s [PI] to another business or a third party for monetary or other valuable consideration,” this would seem to capture many of the standard practices that exist every millisecond in RTB.

However, determinations as to “business” eligibility, or whether an entity is acting as a “service provider” pursuant to a valid “business purpose” (potentially outside the definition of a “sale”) versus acting as a “third party,” are all matters of interpretation that can change, and so can’t be easily answered on a general level.

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