Privacy

European carriers file to create joint venture for opt-in ad targeting of mobile users

Comment

Midsection Of Man Using Mobile Phone While Standing Against Wall, photo taken in Jakarta, Indonesia
Image Credits: Alfred Junus Verdio / EyeEm (opens in a new window) / Getty Images

European telcos are moving ahead with a plan to create a joint venture to offer opt-in “personalized” ad targeting of regional mobile network users following trials last year in Germany. Although it remains to be seen whether European Union regulators will sign off on their plan.

In a filing submitted to the European Commission’s competition division (spotted earlier by Politico), Germany’s Deutsche Telekom, France’s Orange, Spain’s Telefónica and the UK’s Vodafone set out the proposed concentration to create a jointly controlled and equally owned joint venture — to offer “a privacy-led, digital identification solution to support the digital marketing and advertising activities of brands and publishers,” as they describe the proposed “first party” data ad-targeting infrastructure.

The Commission has until February 10 to make a decision on whether to clear the joint venture (JV) and, therefore, whether or not to let the carriers go ahead with a commercial launch.

A spokesman for Vodafone said the telcos are not in a position to comment on the intended JV at this stage while the Commission considers whether to clear the initiative — and wouldn’t be drawn on a potential launch timeframe. They suggested public messaging on the project will follow approval — assuming the telcos do get a green light from Brussels to work together on the mobile ad targeting infrastructure.

Details about the plan for the carriers to dive into personalized ad-targeting emerged last summer during initial trials in Germany. The tech was described then as a “cross-operator infrastructure for digital advertising and digital marketing” — and Vodafone said they would be relying on user consent to the data processing. The project was also given the initial moniker “TrustPid” (but if it flies, expect that clunky label to be replaced with some slicker marketing).

Uh oh! European carriers are trying to get into ‘personalized’ ad targeting

The telco ad-targeting proposal quickly landed on the radar of a privacy watcher, who raised concerns about the legal basis for processing mobile users’ data for ads — given the European Union’s comprehensive data protection and privacy laws, and given existing microtargeting adtech (which also relies on a claim of user consent), was found in breach of the General Data Protection Regulation in February last year.

The project also faced some early attention from data protection authorities in Germany and Spain. We’re told engagement with regulators led to some tweaks to how the telcos proposed to gather consent — to make the process more explicit.

The telcos’ filing submission proposing to create a JV, which is dated January 6, 2023, confirms that “explicit user consent” (via an opt-in) is the intended legal basis for the targeting, writing:

Subject to explicit user consent provided to a brand or publisher (on an opt-in basis only), the JV will generate a secure, pseudonymized token derived from a hashed/encrypted pseudonymous internal identity linked to a user’s network subscription which will be provided by participating network operators. This token will allow the brand/publisher concerned to recognize a user without revealing any directly identifiable personal data and thereby enable them to optimize the delivery of online display advertising and perform site/app optimization. Users will have access to a user-friendly privacy portal. They can review which brands and publishers they have given consent to, and withdraw their consent.

Discussing their approach, a representative for one of the involved telcos (Vodafone) confirmed the intent is to rely on gathering consent from users via pop-ups. So if anyone was hoping that the demise of third-party cookie tracking would knock consent spam on its head, that looks, well, premature.

A first-party data-based alternative to the (still, for now) ubiquitous tracking cookie also requires a legal basis to process people’s data for marketing — and alternatives to consent look increasingly tricky given ongoing guidance (and enforcement) by EU data protection regulators, such as the massive fine this month for Meta for trying to claim contractual necessity for processing user data for ads; or the warnings TikTok attracted last year when it sought to switch from consent to a claim of legitimate interest for its “personalized ads” — a move it was forced to back away from.

Consent as the legal basis for “personalized ads” is no picnic either, though: The IAB’s Transparency and Consent Framework (TCF) — which relies upon a claim of consent to third-party ad tracking — was found in breach of the GDPR last year (as was the IAB Europe). And the Belgian DPA issued the adtech industry with a hard reform mandate. However, for now, the tracking-ads status quo lumbers on, zombie-like — pending a final legal reckoning.

The distinction the four telcos behind the proposed JV are seeking to claim for their proposal for consent-based ad targeting — versus current-gen (legally clouded) adtech targeting — is, firstly, that it’s based on first-party data (the claim for the TrustPid project is no syncing and/or enriching of the individual-linked targeting tokens is allowed or possible between participating advertisers). So it’s not the kind of consentless-by-design background “superprofiling” of users that’s landed current-gen adtech into such legal (and reputational) hot water. The proposed tracking is siloed per brand/advertiser — with each needing to gain upfront consent from their own users and only able to target against data points they gather. (Plus we’re told user-linked tokens would be cycled regularly, with the initial proposal being to reset them every 90 days.)

Secondly, the telcos are proposing to put contractual limits on participants — such as requiring that no special category data (e.g., health data, political affiliation) can be attached by an advertiser as a targetable interest to a user-linked token. They also want the JV to have the final say on the language/design of consent pop-ups (which they say will offer users a top-level refusal, rather than burying that option as routinely happens with cookie consent pop-ups). And they say they will audit all participating websites on a regular basis.

There is a third check: a portal where mobile users can view (and revoke) any consents they have provided to individual brands/publishers to use their first-party data for ads — and that, we’re told, will provide an option that lets mobile users block the entire system (so a hard opt-out). Although we understand it’s not currently the case (in the trial) that users who apply such a block are prevented from receiving pop-ups asking for their consent to the ad targeting — so, again, consent spam and consent fatigue look set to continue. (And, well, could plausibly multiply as consent gets unbundled — that is, if the system takes off with lots of brands and advertisers.) At least, unless or until they can figure out an appropriate legal basis that does not require ongoing pestering of users who already denied consent with pop-ups.

If the telcos’ JV gets the green light from the Commission, scrutiny on the project will of course dial up — and close attention to technical (and contractual) details may well throw up fresh concerns. So it’s too soon to judge whether the approach will/would pass muster with regulators and privacy experts.

There could also be friction from mobile network users themselves — if they suddenly find they’re encountering a fresh, irritating layer of consent spam when browsing the mobile web, a service they do, after all, pay the telcos to provide them with. So tolerance for extra consent spam could be very low.

Moreover, convincing mobile users to actually opt in to ads — assuming they are indeed provided with a genuinely free (and fair/non-manipulative) choice to deny tracking, rather than being forced or bamboozled into it as has been the dark pattern rule for years — presents a major barrier for uptake. Plenty of people will deny tracking if they are actually asked about it (see, for example, the impact of Apple’s App Tracking Transparency requirement on third-party iOS apps’ ability to track users).

So even if the telcos are allowed to build their ad targeting JV, there’s no guarantee mobile users on their networks will agree to play ball.

Still, if this flies, there could be a chance for brands to win web users over with a fresh approach. Being transparently upfront about wanting to process people’s personal data for ads — and, potentially, also able to offer incentives for users to agree — offers an opportunity to do things differently versus a creepy status quo that can’t clearly explain how people’s data got sucked up, where it may have ended up, or what’s really been done with it.

An upfront approach could thus provide a route for savvier brands to deepen their relationships with loyal customers by making straightforward asks, not resorting to sneaky surveillance.

Meta’s New Year kicks off with $410M+ in fresh EU privacy fines

More TechCrunch

Welcome back to TechCrunch’s Week in Review. This week had two major events from OpenAI and Google. OpenAI’s spring update event saw the reveal of its new model, GPT-4o, which…

OpenAI and Google lay out their competing AI visions

Expedia says Rathi Murthy and Sreenivas Rachamadugu, respectively its CTO and senior vice president of core services product & engineering, are no longer employed at the travel booking company. In…

Expedia says two execs dismissed after ‘violation of company policy’

When Jeffrey Wang posted to X asking if anyone wanted to go in on an order of fancy-but-affordable office nap pods, he didn’t expect the post to go viral.

With AI startups booming, nap pods and Silicon Valley hustle culture are back

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

A new crop of early-stage startups — along with some recent VC investments — illustrates a niche emerging in the autonomous vehicle technology sector. Unlike the companies bringing robotaxis to…

VCs and the military are fueling self-driving startups that don’t need roads

When the founders of Sagetap, Sahil Khanna and Kevin Hughes, started working at early-stage enterprise software startups, they were surprised to find that the companies they worked at were trying…

Deal Dive: Sagetap looks to bring enterprise software sales into the 21st century

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: OpenAI moves away from safety

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

Featured Article

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

1 day ago
Two Santa Cruz students uncover security bug that could let millions do their laundry for free

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Featured Article

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

1 day ago
Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Ember has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.

Kudos lands $10M for an AI smart wallet that picks the best credit card for purchases

The EU’s warning comes after Microsoft failed to respond to a legally binding request for information that focused on its generative AI tools.

EU warns Microsoft it could be fined billions over missing GenAI risk info

The prospects for troubled banking-as-a-service startup Synapse have gone from bad to worse this week after a United States Trustee filed an emergency motion on Wednesday.  The trustee is asking…

A US Trustee wants troubled fintech Synapse to be liquidated via Chapter 7 bankruptcy, cites ‘gross mismanagement’

U.K.-based Seraphim Space is spinning up its 13th accelerator program, with nine participating companies working on a range of tech from propulsion to in-space manufacturing and space situational awareness. The…

Seraphim’s latest space accelerator welcomes nine companies

OpenAI has reached a deal with Reddit to use the social news site’s data for training AI models. In a blog post on OpenAI’s press relations site, the company said…

OpenAI inks deal to train AI on Reddit data

X users will now be able to discover posts from new Communities that are trending directly from an Explore tab within the section.

X pushes more users to Communities

For Mark Zuckerberg’s 40th birthday, his wife got him a photoshoot. Zuckerberg gives the camera a sly smile as he sits amid a carefully crafted re-creation of his childhood bedroom.…

Mark Zuckerberg’s makeover: Midlife crisis or carefully crafted rebrand?

Strava announced a slew of features, including AI to weed out leaderboard cheats, a new ‘family’ subscription plan, dark mode and more.

Strava taps AI to weed out leaderboard cheats, unveils ‘family’ plan, dark mode and more

We all fall down sometimes. Astronauts are no exception. You need to be in peak physical condition for space travel, but bulky space suits and lower gravity levels can be…

Astronauts fall over. Robotic limbs can help them back up.

Microsoft will launch its custom Cobalt 100 chips to customers as a public preview at its Build conference next week, TechCrunch has learned. In an analyst briefing ahead of Build,…

Microsoft’s custom Cobalt chips will come to Azure next week

What a wild week for transportation news! It was a smorgasbord of news that seemed to touch every sector and theme in transportation.

Tesla keeps cutting jobs and the feds probe Waymo