Thursday, May 29, 2008

Mobile Internet - Privacy concerns

Regulator warns of mobile Internet privacy concerns

Searching on the Internet via a mobile phone poses higher privacy-related concerns than traditional computer-based queries, according to the Italian authority for the protection of personal data.


Mobile Internet is considered the future of the Web. Yahoo! predicts that in less than ten years, the majority of Internet users are expected to access the net via their mobile handsets (see EurActiv 15/05/08).

Privacy concerns related to the Internet mainly arise from social networking websites and search advertising. The latter is based on user profiles assembled by search engine operators by putting together personal information such as query histories, geographical locations and IP addresses.

The effectiveness of targeting specific consumers makes search advertising more valuable than traditional display ads based on banners aimed at non-specific users.

Using a search engine on a mobile handset makes available a larger amount of personal data, allowing for easier identification and location of a user. Specifically, by matching the information collected by search engines and the particular data collected by Telecom networks, "it is possible to have a very accurate profile of a user, namely in terms of localisation," warned Giovanni Buttarelli, secretary general of the Italian Data Protection Authority, after a meetingexternal in the EU Parliament on privacy and the Internet yesterday (28 May).

He expressed his "concern" over potential new scenarios foreseeable due to mobile Internet and reminded search engine operators that they have to abide by the principles set in an opinion issued by EU Privacy regulators last April. The text invites search engines to ask users' permission to collect private data to be used to offer personalised advertisements on the Internet.

The EU's increasingly cautious stance on Internet privacy may have significant consequences for the thriving targeted ads market, developed by search engines by compiling detailed knowledge of their users.

Search (or targeted) ads represent around 45% of the online advertising market in the EU and 40% in the US, comparing to around 30% in both areas for display ads and lower percentages for email advertising. The entire market for online advertising already has an estimated value of around 25 billion euros worldwide, an impressive figure considering that the first Internet banner only appeared in 1994, according to figures from the Milan-based Bicocca University.

Google is the dominant player by far, controlling the largest market share both for search and display ads. The recent acquisition of DoubleClick further strengthened its position in the online advertising market, yet was considered to comply with competition rules by both EU and US regulators.

European citizens are also becoming more concerned about the use of personal information on the Internet. 82% of European Internet users have little trust in personal data management over the Web, according to a recent Eurobarometer poll.

Another poll issued yesterday indicates that in Italy, France, Germany and the UK, 83% of the people interviewed consider it inappropriate for a company to collect a wide variety of detailed personal information on a user. Another 93% said that this information should not in any case be used for targeted ads.

The poll was carried out from a sample of 150 citizens per country in spring 2008 by ICOMP (Initiative for a Competitive Online Marketplace), an advocacy forum sponsored by Microsoft.

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