Privacy laws and the consequences for online advertising

By Ruby Derrick | 28 May 2024
Credit: jsalvino via Unsplash.

The online advertising industry is concerned about consequences if the federal government goes too far with proposed new laws to protect privacy.

The key benefit of digital advertising, as opposed to traditional advertising which broadcasts to a wide net, is that it can be finely targeted to specific audiences and sets of people. 

The government, reacting to online scams, regular data breaches and the rise of artificial intelligence, wants to reform privacy laws, including what data can be collected from individuals.

Advertisers argue they need data on a customer base or audience to ensure the right type of messaging is sent to the people who need it and to protect children and others from inappropriate advertising. 

The government announced it will be fast-tracking the review of several proposed reforms to the Privacy Act 1988 to be put in parliament in August of this year, including making privacy notices more concise and understandable, sources outline.

If the regulatory framework isn’t right, there’ll be inadvertent repercussions for the delivery of service to customers, insiders say. Businesses with online retail presences that use data to market or tailor their services will need to be on top of these reforms.

The Australian government is actively consulting with industry groups around economic feasibility and to measure the regulatory burden during the reformation process.

From IAB Australia’s perspective, there are still a number of issues to work through.

The trade association wants to ensure that the targeting proposals are workable, IAB Australia director of policy and regulatory affairs Sarah Waladan told AdNews.

Tailoring advertising and content, and data segmentation, are fundamental to how the online ecosystem works,” she says.

“If we don’t get the regulatory framework right, there will be significant unintended consequences for the delivery of services to consumers, as well as for day-to-day business operations - and we don’t think that’s the intention of the government.”

It’s also critically important that data processing activities for purposes such as measurement, analytics, research, and reporting, are able to continue, Waladan says, similarly to the positions under the GDPR and in a number of other countries.  

“These activities are essential for business operations. How these activities will be treated under the proposed new law, including the new fair and reasonable requirement, requires urgent clarification.”

Attorney-General Mark Dreyfus will be bringing forward legislation in August to overhaul the Privacy Act.

In a speech delivered at the Privacy By Design Awards, Dreyfus confirmed recent large-scale data breaches and the rise of artificial intelligence have accelerated the need for regulatory reform.

Australian Association of National Advertisers (AANA) head of regulatory affairs Megan McEwin says the consultation on the cost and benefits of the proposed reforms is very important given that the government has indicated that it will introduce privacy reform legislation to parliament in August.

“While the new data protection and erasure requirements will lift standards in the smaller organisations, for large businesses, data protection and cyber security will be an ongoing project as opposed to a set and forget exercise," McEwin says. 

“Many of the reforms will require extensive IT system changes to ensure pro-privacy settings and any opt-out elections made by customers can be implemented instantaneously across multiple business units and systems.”

The definition of personal information and "high-risk" entities are sufficiently wide to capture any organisation undertaking targeted marketing and, combined with the proposal to take away the small business exemption, would capture most online retail businesses, McEwin says.

“Any business with an online retail presence that uses data to tailor their service or market to customers will need to get on top of these reforms and ensure their house is in order from a privacy point of view.”

One issue the advertising industry needs to be aware of is that opting out of receiving targeted advertising is back on the table, albeit in a qualified form.

AANA has always advocated that behavioural data is necessary to ensure advertising is responsible and children and vulnerable groups do not see inappropriate advertising. 

“While we support the vast majority of the proposed reforms, we would prefer to see targeted advertising left alone and the focus to be on restricting illegitimate collection and use of data,” McEwin says.

Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at

Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.

comments powered by Disqus