When we imagine an assault on free media, we often picture a despotic ruler seeking to consolidate power by silencing voices of opposition. Bangladesh, Egypt, Turkey, and Zimbabwe are but a few arenas where battles for media dominance by the ruling class have left news outlets censored, journalists in jail, and the public deprived of the truth.
In Europe, a different but still pernicious assault on free media is also under way. And while it may be harder to see — no news outlets are being seized by force — if left unchecked its long-term impact is harmful to democracy and economic prosperity.
Buried in pages of amendments to the European Union’s latest privacy proposal, the ePrivacy Regulation, members of the European Parliament recently recommended language that would strip European publishers of the right to monetise their content through advertising, eviscerating the basic business model that has supported journalism for more than 200 years. The new directive would require publishers to grant everyone access to their digital sites, even to users who block their ads, effectively creating a shoplifting entitlement for consumers of news, social media, email services, or entertainment.
The language may seem confusing to the uninitiated. “No user shall be denied access to any [online service] or functionality,” the proposed amendment says, “regardless of whether this service is remunerated or not, on grounds that he or she has not given his or her consent […] to the processing of personal information and/or the use of storage capabilities of his or her [device].”
In practice, it means this: The basic functionality of the internet, which is built on data exchanges between a user’s computer and publishers’ servers, can no longer be used for the delivery of advertising unless the consumer agrees to receive the ads — but the publisher must deliver content to that consumer regardless.
In any other scenario, such a proposal would be unthinkable. No lawmaker would consider legalizing turnstile jumping on the subway, or free access to a movie theatre, or the right to steal candy from a candy store, as these practices are clear violations of the most fundamental principles of contract law, on which the entire market economy is built. Yet the European Parliament is intent on creating a special law, by which the media industry alone is denied the right to its historic business model.
The impact of this proposal would be felt around the world, as all businesses operating in Europe would fall under the scope of the proposal and be subject to severe penalties. And it isn’t just businesses that would suffer from such a proposal.
If passed, this proposal would be devastating to consumers across Europe. As consumers begin blocking advertising without consequence, publishers will have to seek new revenue models to replace the 76% of the revenue currently coming from advertising. Consumer fees for the services we receive for free today would add up to hundreds of dollars per month for companies to remain operational.
The impact in the mobile environment, where the majority of mobile applications depend on advertising revenue to survive, would be just as devastating. With few consumers willing and able to pay the additional taxes, the majority of the online content they enjoy today could disappear forever — at exactly the time authoritarian governments around the world are attempting to seize more control of the news and entertainment media.
As one member of the European Parliament, Daniel Dalton of the United Kingdom, recently said, “This [law] will break the current model of the internet.”
Fortunately, the free internet in Europe is not yet dead. Existing EU law says that access to an online service may be made conditional on the ability of a website to deliver targeted advertising. The revised ePrivacy Regulation should maintain this clarification.
More fundamentally, the European Union must reevaluate its prescriptive approach to privacy that hampers innovation. Citizens of the European Union would be better served by enforceable rules of the road that encourage companies to develop tailored approaches to privacy in alignment with consumer expectations and marketplace realities.
With common sense principles that recognise mass media’s dependence on advertising, we can ensure a healthy digital ecosystem where the tremendous consumer surplus of the internet continues to prevail.
Randall Rothenberg is the president and CEO of the Interactive Advertising Bureau, a trade organisation representing media and technology companies centered around the digital advertising industry.
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