Once again, data is in the spotlight, and not in a good way. The EU is proposing radical changes regarding data protection. As they stand, the EU Data Protection Regulations announced on the 25th January have far reaching effects on a large number of businesses and markets at a time when many organisations are struggling to make ends meet. Of course data privacy rights must be upheld, but not at the cost to business and innovation. The balance has to be right, and at the moment it is has swung too far towards the individual.
The major point is that the costs to be placed on businesses in complying with this legislation may well cripple them. Take, for instance, the proposal to scrap the £10 administration charge to customers wanting to access their personal data. All very well, you might say, it’s their data. But that cost is not there to cover the cost of compiling and sending that data, it is there to dissuade requests that aren’t genuine or important. With no charge, data requests may radically increase, putting a large cost and time burden on the companies who hold that data, be it brands, agencies or data brokers. The Ministry of Justice estimated it cost UK business £50 million in 2009 to fulfil these access requests. Smaller businesses will feel the effect of this far greater as the recession has already made it harder to drive profit and break even. With the costs of data requests, something will have to give, and it is glaringly obvious where this will be – investment and jobs.
Another damaging proposal, for customers as well as companies, is the classification of IP addresses and cookies as personal data. We all like a personalised user experience online, much like when we go to the pub and the barman knows our favourite tipple. Websites would be banned from remembering your data from previous visits, and so every time you went to your favourite online store you would have to enter all your preference details again. This has the potential to have a negative impact on sales at a time when online shopping is growing strongly in popularity. What good will it do to stifle this development? And what about web analytics? Without access to IP addresses to study online consumer movement, that entire subset of the marketing industry will be effectively wiped out, along with the companies that provide those enhanced customer experiences.
On top of all this, the effects that it will have on the business world as a whole could be dramatic. If marketing departments and agencies can’t effectively target their customers due to a lack of quality data, sales will undoubtedly drop. This will affect all businesses, in every sector – not just marketing.
Now, amongst all this doom and gloom, there were a few positive elements that will continue to develop the public’s trust in the industry. Data breaches will have to be reported within 24 hours to effectively safeguard and combat data theft. The age of a child has officially been defined as 13 years old, and so safeguards on child marketing materials can be more effectively discussed and implemented.
However, the vast majority of the proposals outlined on the 25th January have the potential to stifle business growth and damage the marketing industry beyond recognition. Now is the time for the business world to have its voice fairly represented before any part of these proposed changes become enshrined in law.
