Hamburg / Freiburg, May 28th, 2020: In its ruling today (case no. I 49 7/16), the German Federal Court of Justice (BGH) has decided that publishers must actively consent to the use of cookies (so-called opt-in procedure). In doing so, the BGH is adapting previous German case law to European law and shaking up a firm pillar in the marketing models of many publishers, advertisers and e-commerce websites.
The BGH ruling announced today in the Planet49 case (case no. I 49 7/16) provides clarity on at least one important point regarding the use of cookies for advertising purposes: In future, active user consent will also be required for this in Germany. For the online advertising market in Germany, this is a paradigm shift that could have a major economic impact on the refinancing options of digital content providers.
This particularly affects website operators (publishers, blog operators and stores), who must switch to the active consent solution for storing cookies. Advertising that was previously based on cookies for specific target groups is an important source of funding for providers of digital media and journalistic services. The result is declining reach and a further shift in media budgets towards online offerings from major US players that require login. For European advertising technology providers, the ruling also means a further weakening of their position vis-Ã -vis US platforms.
“The ruling increases the requirements for providers of digital content in advertising marketing. Consent is a difficult-to-manage instrument for this multi-layered economic ecosystem, which brings with it numerous challenges. For digital media providers, this means a significant increase in technical complexity as well as legal and economic risks, which can ultimately only be countered by industry-wide standards and careful technical and legal implementations. In terms of legal policy, it would be desirable for the EU legislator to draw the right conclusions based on an evaluation of the implementation of the e-Privacy Directive in the EU member states and, in particular, to correctly assess the sometimes counterproductive economic and data protection control effects of the regulations,” says Stephan Zimprich, partner in the IP and technology team at Fieldfisher.
“The de facto termination of the previous German special path by today’s BGH ruling may be consistent and ultimately also correct with a view to Europe-wide legal standardization and security. And the digital industry has certainly helped pave the way to this point with cookie-based targeting and tracking excesses. Nevertheless, today’s decision is the preliminary culmination in a long series of criticizable legal (mis)regulations, which in practice fatally achieve exactly the opposite of what the policy actually aims to achieve. After all, the final implementation of a strict consent regime means less pseudonymity and more personal data. Less control in the browser, but more non-transparent backend processes through to the development of cookie-independent solutions that the user can no longer see at all, let alone control. More media and opinion monopolization and market power through further concentration of advertising money in large global login walled gardens instead of local plurality. Less data storage in Germany and the EU – but more data processing possibilities in the USA and by US authorities. Obviously, the digital industry has not succeeded in sufficiently communicating the fallacy of its data protection policy to political decision-makers in good time. The hope remains that the login alliances and other post-cookie initiatives launched in the German and European markets will be able to cushion the worst consequences. Because the next market disruption by browser manufacturers is already looming – and it will not have a level playing field in mind or ask for legitimate German or European market interests,” explains Thomas Peruzzi, CTO Technology of the leading European adtech provider virtual minds AG.
About Fieldfisher
Fieldfisher is a dynamically growing international commercial law firm with around 800 lawyers in Belgium, China, France, Germany, Ireland, Italy, Luxembourg, Spain, the UK and the USA – Silicon Valley. The firm specializes in the areas of finance, tech, energy & natural resources and life sciences. The firm also advises companies from all sectors of the economy, from start-ups to leading global corporations, as well as the public sector.
About Virtual Minds
Founded in 2001, virtual minds AG (Freiburg) is a holding company that unites well-known digital and media technology providers under one roof. ADITION technologies (enterprise marketing platform, ad serving and active agent omnichannel DSP), The ADEX (data management platform, cross-device media solutions) and Yieldlab (omnichannel SSP) have been among the top German and European players in their respective segments for years and together form the leading European modular full-stack offering for the digital advertising market. The international customers of virtual minds include major publishing and TV houses and their marketing units, agency groups and numerous top advertisers. virtual minds AG is a wholly owned subsidiary of the ProSiebenSat.1 Group.
www.virtualminds.de
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