Google has been accused of turning privacy regulations to its advantage. By Gciriani - Own work, CC BY-SA 4.0, https://commons.wikimedia.or
A case brewing in the USA between Comcast’s video advert division FreeWheel and Google could have major ramifications for the future of video advertising as it converges with online.
FreeWheel has accused Google of exploiting privacy concerns and regulations to prevent it and other third parties from selling ads for their clients on YouTube channels.
The move, the first from a major media company against Google, has been interpreted as a response to an unintended consequence of data privacy legislation and in particular the European Union’s GDPR which came into force on May 25th 2018 and looked like serving as a template for the rest of the world. Comcast’s action against Google can be interpreted as a backlash against GDPR, or at least the way it is formulated with its tight regulations over sharing of customer data between commercial entities in possession of it. This includes video service providers, brands and advertisers.
The dispute then is all about access to data, which is the currency and lifeblood of advertising because it determines value and directs effective targeting. The issue is that FreeWheel’s clients receive less data from ads placed on Google platforms including YouTube than they would if they placed those ads directly.
The story dates back to 2009 when Google struck a deal with FreeWheel to allow the latter’s service to be used by media companies such as NBC, Turner and Viacom to sell ads as an alternative to Google’s competing offering. At the time, FreeWheel was independent and Google saw this as part of a strategy to expand its reach for advertising by offering the most mature and well proven video ad server.
But since then Google has reduced the deficit and gained experience in serving and managing video ads, while FreeWheel was acquired by Comcast for $360 million in March 2014 and became a cornerstone of its strategy for converging broadcast and online media. FreeWheel became increasingly a direct competitor to Google, which was also intent on embracing video advertising and combining that with its digital platform to achieve synergy, so denying rivals some of the necessary data would enhance its competitiveness.
Then GDPR came along, introducing much more stringent rules over sharing of data with third parties outside the organization that collected it, especially if that involved access to that data from countries outside the EU. In general, the parties whose information is being passed should be informed and they also need to provide consent for actions such as direct marketing that might result. So while the GDPR does not prohibit data sharing with third parties, it does raise the bar and so enterprises such as Google under close scrutiny understandably might react by simply prohibiting such a move. Indeed, FreeWheel might have found it harder to act if Google’s actions had been confined to the EU.
But Google extended some of the restrictions to the USA. It continued to allow FreeWheel to use its platform there but only on condition that some data sources would be cut off for privacy reasons, even if that was not strictly required by Federal regulations. Google might have been anticipating tighter regulations to come but has been forced to rein back a bit and stated that it is working with FreeWheel to preserve access to its data as far as possible in the US and even restore it where possible in Europe by working within the GDPR guidelines.
But this has not been sufficient so far to placate Comcast, which continues to accuse Google of using privacy concerns as a pretext to limit FreeWheel’s ability to sell ads on behalf of its clients’ YouTube channels. It argues the reduction in data access makes FreeWheel’s system less competitive against Google to media companies and their advertisers.
Until now, service providers have been reluctant to take on Google because they rely on its services and platforms, while lacking the resources or clout to make much headway. But Comcast is a big hitter with powerful lobbyists in place to help wage anti-trust war against Google, if it comes to that. It is a big spender on election campaigns and is encouraging the House Judiciary Committee, the US Department of Justice and a coalition of 50 state-level attorneys to pursue investigations of potential antitrust violations, seeking more information about its ad business and constraints over competition there.
The case will be followed closely across pay TV and broadcasting because Google is also a threat to their business while at the same time providing a vital cog in their own competitive armory with Android TV. It also has wider ramifications for data privacy legislation, because it increases scrutiny of the GDPR just over a year after it came into force and may even exert pressure for some relaxation over sharing of third-party data to avoid constraints on competition in various sectors.
You might also like...
Broadcasters are falling prey to common cybersecurity vulnerabilities as some struggle to adjust to the migration away from traditional dedicated systems to generic infrastructures based on the IP protocol, more like enterprises in other sectors.
Media content piracy declined by an average 15% across Europe during 2018 according to the European Union (EU) Intellectual Property Office (EUIPO), contradicting the popular notion that the problem is getting out of hand in the streaming era.
Video consumers are still reluctant to embrace more secure authentication methods than traditional passwords despite mounting fears over identity theft and intrusion into privacy.
Innovation in the media and entertainment industry is at an all-time high with devices, backend technologies, operating systems and consumer behaviors constantly evolving. A key element of this evolution is how viewers see, experience, navigate and consume the content they…
Verimatrix is seeking to win major customers in broadcasting and pay TV on the back of API integration of its MultiRights OTT multi-DRM with Amazon Web Services (AWS). As AWS continues its strong advance into video services by claiming some…