New guidelines could do away with pesky online advertisements
Published: 01 Jun. 2023, 18:01
People in Korea will be able to choose whether or not to see personalized online advertisements starting from next year as the country's data protection watchdog strengthens regulations on digital advertising practices.
The Personal Information Protection Commission (PIPC) will release guidelines on the so-called personalized ads next month. The core of the new initiative lies in guaranteeing users’ right to choose to view ads. Such tailored advertisements will be delivered after analyzing a user’s private online activities and sometimes their age, gender, location and their personal interests based on their past purchases or keywords from search engines.
The guidelines will include a clause that states that “advertisement agencies must get consent from a user whether or not the subject logs in to the service.”
In other words, if a portal site or social media platform wants to send out tailored ads from users’ personal information, agencies must receive consent from the users.
The new guidelines come some three years after the PIPC took over related matters from the Korea Communications Commission (KCC).
The PIPC issued fines of around 100 billion won ($75.5 million) to Google and Meta last September for not acquiring consent from its users to distribute tailored ads to their accounts.
It was the highest fine that a government regulator imposed on platform operators for violating the personal information protection law. The platforms had access to users’ online activities such as the frequency of their usage in delivery apps provided by app developers and personalized ads based on that information — all done without users’ approval.
Although users may have agreed to provide their information when subscribing to a certain platform, the problem lies in the fact that it was difficult for them to know the extent of the information that the platform may be collecting.
Since then, the PIPC has been looking for ways to amend regulations.
The PIPC has held 10 closed-door meetings with platform operators since it slapped the fine on Meta and Google.
Revised guidelines from the commission will be effective from next year after a six-month grace period.
From then, users have to choose whether they will view the ads whenever they open up a new page on a website or apps they use.
If there are multiple personalized ads from different companies on one page, users will be asked to give their consent for each ad.
To minimize users’ inconvenience, they may choose to give their consent to the ads every one to six months if they visit the platform without logging in.
“The revision is not final, we are still accepting suggestions,” said a PIPC spokesperson.
Industry sources say that although guidelines are not legally binding, they can be used as evidence to impose restrictions on advertisers.
Some worry that users will be more likely to favor large portals or platforms such as Naver because they run their own advertising business and hence, simplify the consent process they need to get from its users.
The revised guidelines may also be unfavorable for domestic companies.
Platforms such as Google and Meta developed trackers to collect user information and provide it to their advertising partners such as app or website developers. Thus, those platforms argue that the responsibility of collecting information lies in respective operators or websites and apps, who can choose whether to use their tools.
Using the same argument, Google and Meta filed a lawsuit against PIPC in March, claiming its fines are unjust.
In the United States, personalized ad models are losing ground as Apple’s App Tracking Transparency allows users to choose whether an app can track their activities for purposes of advertising. Google and Meta’s share in the U.S. online advertising market in 2022 fell below 50 percent for the first time in eight years, according to Wall Street Journal.
The domestic market for online advertisement is shrinking as well, falling below 7 trillion won in 2022 compared to 2021’s 8 trillion won, according to the Korea Broadcast Advertising Corporation.
“The primary reason why the majority of the apps are free is due to advertisements, but they may transition to paid services if they don’t make enough profits from ads,” said another source from an IT company.
BY MIN KYUNG-WON [[email protected]]
with the Korea JoongAng Daily
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