European data regulators work on unified approach to ‘pay or okay’

European Data Protection Board expected to take a position on the issue within eight weeks
Image: Stockfresh

26 January 2024

European data protection regulators are working on a procedure for managing how online platforms obtain consent from users for showing personalised ads.

For example, some platforms argue that people can only continue to use the platform for free if they consent to their personal data being used for targeted ads. For example, to use Spotify on a free tier you have to listen to ads, where the paid version does not feature them.

The European Data Protection Board (EDPB) is expected to take a position in eight weeks.

Online platforms are allowed to show personalised ads only with users’ consent. This is evident from previous rulings. In practice, some platforms use the ‘pay or ok’ model. Users must then pay a monthly fee if they do not consent to the use of their personal data for targeted ads. They are then no longer shown targeted ads.

The privacy authorities, together with all EU colleagues in the EDPB context, want to quickly take a position on whether a ‘pay or okay’ model is allowed under the General Data Protection Regulation (AVG).

The AVG requires companies that process personal data to have a legal basis for doing so, such as consent. You must be able to give consent freely, without being pressured. You must also have the choice to refuse to allow a company to process your personal data. And that should not have any adverse consequences.

The question is whether ‘pay or ok’ policies meet these requirements. At the moment there is no unambiguous European approach; national regulators deal with this differently.

These policies are particularly problematic when it comes to large and popular online platforms with many users. Users may feel dependent on such platforms, for example, because their friends, family and colleagues also use them. Alternatively, important information or popular content is shared on those platforms. Important questions are whether in such circumstances consent to the processing of personal data occurs under pressure, whether the price is fair, and whether rejection leads to adverse consequences, especially for low-income people.

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