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IAB looks to save Internet cookies
Thursday, November 01 2001
by Matthew Clark

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A proposal being considered by the EU to ban "cookies" on the Net is meeting hefty opposition, most notably from the Interactive Advertising Bureau in the UK.

In recent weeks, the European Commission has been debating whether the use of cookies on the Internet should be something users would have to opt into. The cookie proposal, an amendment to a Parliamentary report on electronic data collection and privacy, is set to go to vote on 13 November before the European Parliament plenary assembly. If the proposal passes that assembly it will move on to the EU Council of Ministers for a final vote.

A cookie is a bit of text that a Web server can store on a user's computer. Cookies are important because essentially they let Web sites "remember" visitors: this is useful for shopping sites such as Expedia or Amazon.com which want to recommend new books or flights to users based on past purchases, or offer visitors other customised content. Cookies are also important for Internet advertisers, since they can be used to more closely target ads to users.

The amendment was proposed by Dutch Parliament member W.G. van Velzen, and it suggests that cookies are tools primarily used to track and store information about users' surfing habits. In fact the amendment says the use of the technology, "may seriously intrude on the privacy of these users. The use of such devices should therefore be prohibited unless the explicit, well-informed and freely given consent of the users concerned has been obtained."

In response to this move by the European Government, the Interactive Advertising Bureau (IAB) in the UK has launched its campaign called "Save Our Cookies." The premise behind the initiative is that British advertising and e-commerce companies would lose a collective STG187 million if MEPs were to pass the cookie legislation. "There are several consequences including users being bombarded by intrusive consent messages and advertising, or at worst forcing them to pay for content," the organisation said in a statement.

The IAB said it fears "any change in the law will lead to Internet users having to re-register or re-enter preferences every time they re-visit a site, putting them off e-commerce and from using the Web to search for information, products, services or even entertainment." It continued, "This scenario would force many commercial Web sites to restructure and rebuild their sites."

The IAB cites Haymarket in saying that the UK's top 100 Web design companies generated STG853 million in billings in 2000 with 20 percent of this turnover dedicated to the creation of on-line advertising. It claims that if cookies are restricted, it could lead to a decrease in business turnover of STG170 million which would also lead to job cuts and company closures.

"Cookies serve a number of functions to help consumers make better use of the Internet. They allow consumers to receive useful, personalised content, and can save on time and inconvenience," said Martina King, managing director at Yahoo UK & Ireland, on the subject. "There is always the option, for the concerned consumer, of setting the browser to be alert to, or stop the setting of, cookies. The use of cookies is already covered sufficiently by present legislation. If used responsibly the consumer has nothing to fear."

Her comments were fortified by Alan McCulloch, chairman of the Institute of Practitioners in Advertising's Digital Marketing Group, who said, "Whilst it is important for consumers' privacy to be protected, this legislation is throwing the baby out with the bath water. The commercial impact of this directive is a 'death blow' to Internet advertising in the UK."

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