AdTech: Top five legal issues to consider

What is AdTech?
The term AdTech refers to a combination of advertising technologies – mainly available on the Internet – through which advertisers and brands can better connect with their audience and exploit the value of their data. For instance, AdTech allows the targeting of potential clients in a more precise and customized way through cookies, web bugs or other online tracking tools.

According to recent reports, emerging technologies such as Artificial Intelligence (AI), big data analytics and the so-called “data lakes” have the potential to boost AdTech towards an exponential growth (see also our previous TMT Bites take on AI and data lakes and an overview of how AI is shaping the AdTech industry).

The large use of AdTech tools is already disrupting the marketing and retail sectors, especially in the online environment where customers’ behavior and personal preferences are better tracked and monitored for commercial purposes (i.e. targeted advertising) compared to the “offline world” of physical shops and stores. In fact, participants in the AdTech industry collect and store a great deal of data about people who use the internet. This information is valuable to online advertising industry providers because it enables them to provide higher quality prospects to advertisers and therefore to charge more for the advertising inventory they supply. We are also facing several attempts to build “omni-channel” CRMs, including both customers’ data collected online and offline.

However, the use of AdTech for profiling customers in the online environment and for the exploitation of data collected through AdTech tools also brings challenges concerning a wide variety of legal and regulatory issues, some of which we summarize in our list below.

Top legal issues to consider
Data Privacy: AdTech is a growing trend, however it also give rise to concerns about how advertisers can track individuals and collect massive amount of data. For example, cookies allow the tracking of users’ browsing history and the subsequent display of targeted advertising based on their preferences and online behaviour. This is becoming more and more relevant with the rise of AI, as we discuss in this article. In fact, the draft ePrivacy Regulation will reinforce existing provisions on online consent (also for cookies) for consistency with GDPR. This means that AdTech providers (and publishers) will have to adapt their processing practices to both the GDPR and the ePrivacy Regulation provisions in order to achieve compliance with major EU legislation.

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