Data Goldrush: New research shows apps selling personal data without meaningful consent
The release of the Norwegian Consumer Council’s latest report ‘Out of Control’ has unearthed the extent to which ten widely used apps are sharing the personal data of their users with third parties, without meaningful consent. This information is being used to build profiles of consumers that can be used for targeted advertising, and may lead to discrimination and manipulation.
The report raises serious concerns about the failure of data controllers to protect consumers’ data and privacy, and more than 20 Consumers International, BEUC and TACD members from across Europe, North America and Asia Pacific will be writing to their data authorities to demand an investigation.
About the research
Today, the Norwegian Consumer Council became the latest organisation to challenge the legality of company data-sharing practices under GDPR. This time it is bad actors within the advertising technology (adtech) industry who are under scrutiny for the role of apps in disseminating huge amounts of consumers’ personal data without their meaningful consent in the name of personalising advertising.
The report uncovers how, when consumers use apps on smartphones, hundreds of companies are collecting a lot of information about us, including who we are, where we go, and what we like.
This data is primarily used to drive tailored advertising – problematic in itself as it can be used to exploit our innermost secrets, and reach us in our most vulnerable moments, for example, it could target someone who profiled as impulsive and aspirational with expensive borrowing options. Some fear this data can go further than just tailor adverts to consumers – such as sensitive personal health data being used by insurers to set premiums.
The research paints a grim picture - of consumers unwittingly tracked by hundreds of unknown third parties, and a business model that clearly doesn’t prioritise their needs. For example, popular gay dating app Grindr was found to share extensive personal information about users, such as gender preference, drug habits and precise location to advertising and marketing companies.
Because the extent of tracking and complexity of the adtech industry is incomprehensible to consumers, they cannot make informed choices and give their meaningful consent- a cornerstone of data protection regulation such as the GDPR. These profiles are anonymised, but difficult for consumers to access, edit, or withdraw from.
“ The massive commercial surveillance going on throughout the adtech industry is systematically at odds with our fundamental rights and freedoms.”
Finn Myrstrad, Head of Digital at the Norwegian Consumer Council and report author
Harriet Kingaby, currently working with Consumers International as part of the Mozilla Internet Health Fellowship Programme, explains what could be done to fix the broken world of digital advertising.
Redirecting the energy being expended finding loopholes to addressing trust, privacy and agency would hugely benefit both consumers and companies. Consumer trust in technology is low and scrutiny of platforms, the internet, and adtech is increasing. This has created a huge opportunity to shift from the current opaque and exploitative model to one which empowers, informs and activates consumers, building a more balanced and engaged relationship between companies, suppliers and legislators in the process.
Advertising fuelling the internet
Exploring a new approach starts with understanding the way in which advertising currently funds the internet through the collection and selling of data, payment to publishers when people view or interact with ads, or direct monetisation, such as with contextual advertising. $330bn was spent on digital advertising in 2019, rising to $385bn in 2020. The apps mentioned in the report help us with everything from dating, to monitoring our menstrual cycles. These services can certainly benefit consumers but there is little to no choice about the level of data sharing involved when they use them and they cannot protect themselves from the unintended consequences of this sharing.
What if we re-imagined this money as a consumer asset, which could build a better internet and ensure consumer protection in the process?
An exciting collaboration between Consumers International and Mozilla Internet Health Fellowship is seeking to find answers and solutions to these questions as we enter into the age of AI enhanced advertising. It is clear that culture change and better decision making is necessary in adtech, particularly if the industry is to have access to technologies such as machine learning. Tools and ideas for intervention are under development, but we’re currently exploring the following areas:
Shifting the conversation to ‘consumer needs’: how can we create advertising strategies that seek to build a better internet that prioritises the needs of people, planet and society as well as commercial interests? This might include concepts such as privacy by design, minimal data collection, and placement strategies - adhering to key principles in the Conscious Advertising Network manifestos. This kind of approach could ensure ‘brand safety’ and building better consumer/brand relationships in the longer term.
Ensuring genuine consent: Achieving the ‘informed consent’ required by most data protection rules this is one of the most thorny issues to emerge from the development of the internet (not just advertising) to date, characterised by an information burden on individuals, consent mechanisms that offer nothing meaningful, and a value exchange which is impossible to fully understand for most. Facilitating conversations about the value exchange between content, advertising and personal data, challenging failures where they occur and reimaging infrastructure to deliver agency and fairness will be key.
Treating digital supply chains like physical ones: The management of physical supply chains has spawned countless positive initiatives which have benefited workers and consumers worldwide. Applying similar thinking to digital advertising supply chains could promote accountability and ensure consumer, societal and environmental concerns are being tracked and monitored. Some advertisers are using blockchain technology to audit and optimise their supply chains in real time, rethinking strategy, tackling hate speech, fake news and children’s welfare, or actively seeking to fund better content for example.
Asking the bigger questions: The Norwegian Consumer Council’s report questions the relative effectiveness of behavioural targeting, findings also backed up by academic research. Global commentators are calling out the ‘perverse incentives’ created by ad funded business models, the environmental impacts of so much data processing, and questioning the validity of the success metrics the industry runs on. As we stand on the brink of an AI driven revolution, we will be asking whether the present system can be ‘fixed’ or whether it should be shaken up entirely.
Real change is needed
Clearly, much needs to be done to make consumers and the environment more visible in advertising at the decision-making level, particularly before the widespread adoption of AI changes the sector forever. The findings of this report clearly show that the current advertising eco-system needs a shake up as opposed to incremental change. The consumer advocacy arsenal of tools – standards, international co-operation, testing, empowerment – may provide the building blocks for these solutions and complement the approaches outlined above but commitment and determination from across the whole ecosystem is needed to fix the future of adtech.
To follow the developments in the Consumers International and Mozilla Internet Health Fellowship collaboration around AI and advertising follow our Medium blog here or get in touch with Liz Coll, Head of Digital Change at email@example.com