Champagne mood in Silicon Valley with data collectors like Google and Facebook, the feeling of painful defeat in the media houses of Munich, Hamburg and Berlin. Yes, we Germans are good at scoring own goals, and we didn’t just prove that at the start of the European Football Championship. This is also proven by a law that comes into force in December and is hidden behind the combination of letters TTDSG, which stands for “Telecommunications-Telemedia-Data Protection Act”.
In principle everything was meant well. The law takes care of data protection, of people who are called users when they go on the Internet. The aim is that companies should in principle not be able to pick up any data or traces in the network when communicating electronically with customers. Sounds plausible and fair at first. But the law also applies to media companies. And it makes it much more difficult for them to interact with their customers or readers – against a background that is still intransparent: Because hidden traces, the so-called cookie layers, are still passed on to third parties through secret passages, because the user gets an “OK” somewhere “has pressed. In addition, there are long data protection declarations that seem almost as extensive as a Brockhaus encyclopedia. Or the legal-technical explanations, where you only understand the train station. This means that data giants like Google or Facebook can still juggle with data, while in this country the media have to ask for every OK of a user.
The US giants require universal approval for all products
To make the problem clearer: while the US giants design their business models in such a way that all products are connected in such a way that they can function with only one universal consent from the user, media companies must explicitly obtain consent for each website. Only with mediocre success, of course, because the user has the choice of which data processing they consent to. This further exacerbates the imbalance between journalism and tech corporations that has already prevailed in the advertising market.
Wolfgang Lanzrath is CEO of “Infoline”. The company is one of the most important providers for the determination of neutral coverage surveys for “IVW” and “Agof”, among others.
Ms. Merkel said five years ago in the environment of Cebit that the data were “the raw materials of the 21st century”. The federal government is now doing everything possible to make it so difficult for German companies to access precisely this raw material that they can no longer withstand powerful companies such as Google, Amazon or Facebook in a globalized world. Worse still: everything is done to prevent access to this raw material.
The regulations contained in the Monster Letters Act TTDSG go far beyond what is currently being discussed and demanded in Brussels. Legislation requires that any access to a user’s device requires active consent. Only technically necessary functions are excluded. The so-called “legitimate interest” that was previously in force will no longer be possible after the law comes into force, even if the data is collected completely anonymously.
Pure online media houses that are financed through advertising revenues will soon have their backs to the wall
With the implementation of the TTDSG, the Ministry of Economic Affairs has succeeded in doing a bizarre work that will cause massive damage to media companies. The better a house has prepared for the future and invested in online business, the more difficult its situation is likely to become. Pure online media houses, which are usually largely financed by advertising revenues, will soon have their backs to the wall. How should these companies pay their editorial offices in the future if the user does not consent to personalized advertising and targeted advertising is no longer possible?
Users have to be active now and click: Yes, I want! This consent by the user is called consent. These consent or approval rates currently fluctuate between 35 and 80 percent. Conversely, this means that up to 65 percent of the reach of a potential clientele is already being lost – and just as much sales. With the new TTDSG legislation, however, the entire data collection and thus the advertising opportunities are made even more difficult. This affects the online presence of newspapers and magazines particularly hard, because paywalls, i.e. the hard payment barrier, will be the result.
Does it affect everyone? No, companies like Google automatically get consent because they offer so many gadgets, gadgets and tools that the customer can only use with consent to collect and process their data. For the GAFAs (Google, Apple, Facebook, Amazon) this is an incomparable competitive advantage. Another serious problem that the German media industry has to deal with.
After the fifth pop-up at the latest, the biggest refuser gives up
Because the fine print of Google, Facebook and cohorts is not read by normal mortals anyway. And after the fifth pop-up at the latest, people give up, and even the biggest refuser says against all feelings: Yes, I want to! Digital media, on the other hand, “only” offer content that is valuable for editorial purposes, unfortunately quickly fall behind. You cannot sneak blanket “yes” words because you need an explicit “yes, I do!”
It is even more dramatic: The rescue attempts by the free press will fail due to the ban on coupling under Article 7 IV of the General Data Protection Regulation. Another ingenious idea of the federal government: the ban on coupling means that a responsible citizen is legally relieved of the decision whether to pay with his or her data or with money. So whether he pays specifically for articles he reads or whether he stores his data so that he can read it free of charge. This so-called pure model, as well as it mirrors and Time would be a method of securing the digital press, for example through advertising revenue or direct payment to readers. But does the coupling ban apply throughout Germany?
Advertising-free reading against payment is an incalculable game with fire for media companies
No, there is still a great lack of transparency and therefore uncertainty for publishers. From a legal point of view, there is a lack of clear, uniform requirements; so far there have been various individual case decisions in various regions. The use of the pure model, i.e. advertising-free reading for a fee, is an incalculable game with fire for media companies. The data protection organization Noyb has only just filed a complaint against the Pur subscriptions for titles such as mirrors, Time and FAZ submitted, because forcing readers to subscribe if they do not want to pass on data is contrary to data protection law.
When it comes to data, Germany is now in a situation that is virtually unique in the world. In spite of the strictest requirements and laws, we are considered to be the pioneers of filigree and at the same time transparent data acquisition. For the media industry all over the world, Germany applies with TÜV-like seals such as IVW, i.e. the information community for determining the distribution of advertising media, which provides statistical data on the reach of various media products on a daily basis, or Agof, the online research working group – an amalgamation of the leading German online research Marketer and advertising medium – as a prime example. While international search engines and social media portals trade with their data in the underworld, seemingly dubious, law and order prevail in this country. Most of all right. Because without individual consent from users, no more information can be drawn from the Internet.
Up until now there was a state-recognized “legitimate interest” in measuring the reach of media
Yes, and it is precisely these globally leading data standards that may be on the verge of their end. Because state authority interferes in the business model of free media, free reporting and free advertising. Up until now there was a state-recognized “legitimate interest” in measuring the reach of media. But with the TTDSG, this glimmer of hope also disappears. Even providers who collect completely anonymized data fail because information is no longer allowed to be stored on a user’s device, not even for a short time.
Yes, the GAFAs can toast this too. Your data processing is mostly not subject to German law – and you pay for any violations from your postage. Can we really care if the German standardized digital currency, reach data or clicks, which are real money for the media, are ultimately replaced by US regulations? US companies define the currency according to completely opaque conventions. Consequently, the US dollar or, better still, the Facebook Libra or the Google Coin could then be introduced directly as a means of payment throughout Europe, that would be consistent.
But, conversely, wouldn’t it be more attractive if “Big Data Made in Germany” were to establish itself internationally as the recognized reserve currency? Wouldn’t there be winners on all sides? With users as well as with the media and even with advertisers.
At the moment, however, a more dramatic question arises: are we currently experiencing the destruction of the digital advertising market and the associated destruction of media diversity or even freedom of the press as the most important pillar of a functioning democracy? In a free market economy, companies have to invest in media through advertising in order to financially strengthen the free press. This is in the interests of everyone involved, because it consolidates the system and ultimately benefits the company itself. It is not yet destruction, rather a disturbance on all sides. But the risk of destruction is greater than ever.
One can still see a ray of hope for the German media and advertising market: the introduction of the e-privacy regulation at European level. This regulation is intended to define the level of confidentiality of the electronic communication data of the end users. And it should regulate which data may ultimately be stored under which conditions. Complicated thing. In the past no one would have thought that this construct would ever be called a supposed “ray of hope”. But the question is whether e-privacy will ever come. That will depend a lot on the next government. So it will also depend on whether we will have a destruction or “only” a disturbance of the digital advertising market.