EU privacy laws to spell an end to Facebook for free?

A lawyer has warned that proposed EU privacy laws would make Facebook and other ad-supported online services unsustainable if they make it into law.
Written by Nick Heath, Contributor

Facebook, Gmail and other ad-supported online services would need to start charging users if proposed changes to EU data protection laws go ahead, a legal expert has warned.

Substantial restrictions on how companies handle personal data have been put forward under the draft European Data Protection Regulation, which will shortly be put before the European Parliament.

The proposals would severely curtail the ability of services to claim they have legitimate grounds for collecting, analysing or selling the personal data of their users. They also make it far more difficult for services to claim they have a user's consent for processing their data, even where a user has signed up to a site's terms and conditions.

Eduardo Ustaran, head of the privacy and information law group at Field Fisher Waterhouse, said services like Facebook and Gmail, which use information gleaned from user data to generate ad revenue, would have to abandon their ad-supported models if the proposals became law unchanged.

"If they weren't able to use your data in the way that is profitable or useful for them for advertising purposes, then either the user has to pay for it or stop using the service," he said.

The effect of the proposed regulations would mean these companies "wouldn't be able to rely on legitimate interest and they wouldn't be able to rely on consent", he said.

Erika Mann, head of EU policy for Brussels at Facebook, echoed concerns about the proposals being incompatible with online business models.

"We are concerned that some aspects of the report do not support a flourishing European digital single market and the reality of innovation on the internet - which is inescapably global in nature, and which includes important partners like the US. We will be examining these proposals closely in the coming weeks," she said in a statement this week.

Protection from changes to T&Cs

The proposed regulation would seem to offer users greater protection against websites and services making significant changes to how they handle their personal data after they sign up.

Part of the proposed text for the European General Data Protection Regulation states: "Consent should not provide a valid legal ground for the processing of personal data, where there is a clear imbalance between the data subject and the controller.

"This is especially the case where… the processor or controller is in a dominant market position with respect to the products or services offered to the data subject or where a unilateral and nonessential change in terms of service gives a data subject no option other than to accept the change or abandon an online resource in which they have invested significant time."

Facebook has been criticised on multiple occasions for changing what it does with data provided by users, most recently when its subsidiary Instagram changed its terms and conditions to seemingly give itself the right to put users' photos into ads. It later agreed to remove the offending text after users threatened to leave the service.

The proposals were set out in amendments suggested by the European Parliament committee on civil liberties, justice and home affairs to the draft European Data Protection Regulation. The European Parliament and Council will decide on the final text of the regulation and will vote on whether to accept the amendments.

Once the final text of the regulation has been agreed, it is expected to come into force this year, after which European member states will have two years before they need to need to enforce the legislation at a local level.

Ustaran said he believes the restrictions that would make ad-supported services unworkable will be removed from the regulation by the European Council before it is approved.

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