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Privacy, Law and Advertising: How They Interact in 2018

ByRyan Ayers,
business.com writer
|
Sep 06, 2018
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> Marketing
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How companies collect and use consumers' data is a more pressing issue than ever.

Acting ethically in the digital age means more than just focusing on profit.

Technology and innovation move faster than the legal system – that's always been the way it works. After all, you can't regulate something that doesn't exist yet.

The ethics of privacy are a hot-button issue in the age of digital marketing and advertising, social media, and cybercrime. Businesses have been using consumer data inappropriately since the beginning of the internet, but there are also ethical and legal gray areas when it comes to privacy, information and advertising.

So what are some of the regulations and legal concerns advertisers should be aware of, and how are tech companies dealing with the messy ethical issues surrounding consumer data and privacy? Let's take a look at what's going on in privacy, law and advertising in 2018.

The public's view of privacy: Lack of trust

For a long time, the public took a rather naïve view of the ways sites collect and use information. Before big data, retargeting and Google Analytics became widespread, people didn't really think about how much of their personal data was on social media and other sites.

All that changed when revelations about Cambridge Analytica came to light, a company with right-wing political ties that harvested data from 87 million Facebook profiles through a quiz app. Facebook allowed the company to advertise on the platform and did not protect user data sufficiently, causing millions of users to lose their trust in companies like Facebook to protect their privacy.

Following these privacy scandals, Facebook stock plummeted, losing 19 percent of its value, approximately $120 billion, in a single day. Why? Because the scandal brought up privacy issues, political influence and advertising all at once.

This was a wake-up call for companies that handle data, particularly large tech companies. People no longer trust these companies to keep their data safe, and missteps could have massive consequences. Data breaches have also made consumers wary, as identity theft and other scams compromise privacy, further eroding trust.

What companies are doing to ease fears

While Facebook has responded to its various scandals with assurances of apology and vague promises to do better, other large companies are stepping up to make meaningful changes to protect users' privacy.

Apple is the most prominent tech company to dedicate resources to improving user protection, a move that could boost its reputation with consumers. Not only has it vowed to release features to help users reduce their use of digital tools and apps, it has also begun to protect users' privacy with new updates to its Safari browser. These updates reduce the ability of other tech companies (like Facebook and Google) to view what users have liked or to access their unique browser settings.

These steps were not taken out of regulatory necessity, but because Apple is making an ethical choice and positioning itself as the company that protects consumer data.

GDPR: The first widespread privacy regulations

The European Union's recent adoption of the General Data Protection Regulation (GDPR) is the first sweeping consumer privacy regulation to be passed that puts the power in the consumers' hands. The regulations limit how and for what purposes data can be collected and stored, and it gives consumers the power to request and demand deletion of their own information. Although it applies to the EU only, it can potentially affect any site EU citizens visit. Because GDPR is so new, it's not yet clear how effective it will be, or if it will spur legislation in other countries, but it is a sign that businesses will not be allowed to use consumer data unchecked forever.

Ethics in the digital age

Companies obviously need to pay attention to laws and regulations when it comes to collecting user data and using it to advertise. But they also need to consider the ethics of what they're doing – even if it's technically legal. Aside from the morality standpoint, there's a very good reason for this: maintaining a reputation in a world where "viral" can mean more than an illness.

It means protecting consumers and operating with transparency and integrity. We've seen that media can have a huge impact on society, and companies need to understand the role they play in that process and act accordingly.

Potential future concerns

Social media isn't the only way companies collect information, of course. Web-enabled devices like smart speakers have the potential to passively collect sensitive information. Smart speakers have to be constantly "listening" for their trigger words, which raises concerns about whether any of the extraneous audio feedback the speaker receives is being stored. Of 5,000 U.S. consumers who were surveyed about the issue, 48 percent had concerns about these privacy issues involved with smart speakers. As other smart devices become more popular, this distrust and need for regulations will only increase.

For now, consumers and businesses alike can only do their best to behave in an ethical and intelligent manner. Consumers need to stay informed and question companies' need to collect their personal information. Companies need to understand the value of privacy and work hard to ensure their customers can trust them, no matter what changes are made to data regulation laws.

Ryan Ayers
Ryan Ayers
See Ryan Ayers's Profile
Ryan Ayers has consulted a number of Fortune 500 companies within multiple industries including information technology and big data. After earning his MBA in 2010, Ayers also began working with start-up companies and aspiring entrepreneurs with a keen focus on sustainable scaling, professional development and business growth.
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