Some proposals in the review of the Privacy Act could impede personalised online services plus reduce the effectiveness of advertising, according to Meta (Facebook).
And the documentation needed would be an onerous burden to businesses across Australia.
The review has set off a firestorm of commentary with industry bodies highlighting how the proposed changes would affect advertising, marketing and media.
Meta's submission supports the broad thrust of the changes. Of the 116 recommendations, Meta supports 106 either in full or in principle or has no comment.
However, Meta is concerend that the latest proposals define all online personalisation as “targeting” to bringing it within scope of the Privacy Act.
“The proposed definition of targeting is overly broad and potentially impedes everyday business behaviours that are beneficial to consumers, businesses and the broader economy,” Meta says in its submission to the Review of the Privacy Act, by the Australian Attorney-General’s Department
Meta says personalisation allows people to receive services that are more useful, relevant and convenient.
And this, Meta argues, improves efficiency and productivity across the economy.
“However, the proposed definition of ‘targeting’ is overly broad,” Meta says.
“It covers any personalisation of services, content or information. For example, even when an online service is showing a consumer content that they have asked to see (such as following an Instagram account), the activity would be covered because of the way that online service displays or disseminates the information.”
And the consequences could be that a host of beneficial or benign business behaviours common across the economy would be subject to a special category of regulation beyond other uses of data, even though the risk of harm to the consumer is low.
“When coupled with the other recommendations in the report, this proposal would mean essentially every aspect of an online service would require onerous documentation, and could be objected to by consumers,” says Meta.
“It is so burdensome as to risk deterring innovation and personalisation.”
The report also proposes establishing an unqualified right to opt out of personalised advertising, coupled with an obligation for companies to continue providing the service to consumers who have opted out.
“An opt out right could raise the cost and lower the effectiveness of advertising, without a commensurate improvement in outcomes for consumers,” says Meta.
The social media platform says personalised advertising contributes significantly to the Australian economy.
Research suggests there has been a $10.2 billion increase in consumer value from better matching consumption and consumer preferences, plus savings of $36.5 billion annually for consumers due to decreased transaction costs.
“The efficiency of personalised advertising brings benefits to organisations with tight marketing budgets, such as small businesses, not-for-profits, and government departments,” says Meta.
“Consumers appreciate the benefits of personalised advertising. Consumers overwhelmingly prefer ads that are useful and tailored to them, with 90% of people reporting that messages from companies that are not personally relevant to them are ‘annoying’.
“According to recent research, 76% of Australians agree that personalised ads show information and products of interest to them, and 70% of Australians prefer to have free access to social media and mobile apps in exchange for seeing ads.
The opt out right as proposed in this report essentially dictates the business model that companies use to provide online services, by compelling businesses who offer ad-supported services to build alternative business models.
“They are left with less-desirable choices, like relying on generic, less effective, and more costly advertising, or moving to other business models such as subscriptions.”
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