“Pay or Okay” — An (un)Ethical Approach to Data Protection? — an industry perspective by Profila
Find out how Profila’s consent based personalized advertising system combats the issues of privacy, security, and transparency in online advertising.
In an era dominated by digital engagement and online advertising, ethical concerns about data privacy have emerged in light of recent developments. Social media platforms have long presented users with a bargain: users trade their personal information for access to online services and content. This has most recently given rise to the increasingly prevalent “pay or okay” model adopted by social media platforms (most notably, Meta).
As a concept, the “pay or okay” model tracks your online activity and collects data by default, requiring you to pay a one-time or recurring fee in exchange for privacy. Choosing not to pay the fee implies “consent” to processing of one’s personal data for advertising purposes. The idea of consenting to data processing is to enable targeted advertising which, in theory, benefits users and companies alike. However, tracking systems are becoming increasingly invasive, and companies are using unethical loopholes to exploit and share user data with third parties without users’ knowledge — thus, raising the question whether such consent is truly “informed” consent (to use the diction adopted by the drafters of the GDPR).
Accordingly, Meta’s adoption of the model is under scrutiny regarding its alignment with privacy laws. The legality of “pay or okay” models as a consent-based advertising system has been challenged by data protection authorities and civil rights organizations. Meta recently implemented an advertising system on Facebook and Instagram requiring users to pay a monthly subscription fee in exchange for ad-free access to the platforms’ services and content.
Within the EU, the GDPR establishes that — in addition to being “informed” — consent to processing of personal data must be voluntarily given. From a privacy point of view, user consent in a “pay or ok” model cannot be said to have been given voluntarily when the alternative to protection of the user’s data (a basic human right under the EU’s Charter of Fundamental Rights) involves monetary payment. Following strong criticism from several European data protection authorities, the European Data Protection Board (EDPB) is soon expected to issue an opinion on the alignment of Meta’s advertising model with EU privacy law.
Another point on which the “pay or okay” model possibly violates GDPR rules is regarding withdrawal of consent to processing of personal data. Under the GDPR, it must be “as easy to withdraw as to give consent”. On platforms such as Facebook and Instagram, users wishing to withdraw their consent are presented with two options: paying the monthly fee or continuing to use the services without privacy. Ad-free access to Facebook and Instagram can cost users up to €250 per year, with other accounts costing additional sums. If such costs were linked to every social media platform, the average user wishing not to consent to the processing of their personal data could face large sums of payments.
Users with fewer resources have no choice but to accept the exploitation of their data, being deprived of the ability to protect their fundamental right to privacy under EU law. If the EDPB, in its opinion regarding Meta, legitimizes “pay or okay” advertising models, other companies will likely follow suit and adopt the same approach. This would establish it as a common practice within the Ad-Tech industry, eventually making digital privacy a mere luxury for Europeans (as opposed to a fundamental right).
What if you were paid for your attention and (consented) access to your data instead?
There is, however, another option. Profila offers a solution to the need for a privacy-preserving alternative to the “pay or okay” model: Consent-based (option 1) and Zero Knowledge (option 2) Advertising (ZKA). Both models allow users to opt-in to receive adverts.
· In the consent-based model a user shares his personal data with a brand in exchange for highly personalized advertising on the channel of choice and at the frequency decided by the user. This current model is already developed and available for use by brands and users (sign up here).
· In the ZKA anonymous advertising system, users remain entirely anonymous while receiving targeted adverts of products/services they choose. This model is worked our in the scientific research paper “Zero Knowledge Advertising: a new era of privacy preserving digital advertising” co-authored with the University of Madrid (see here), and is the subject of Profila’s Horizon proposal “Zero knowledge data”.
Whichever option a user selects, users are paid for sharing their data with brands and for receiving adverts (with up to 90% of the digital advertising budget brands spend on Profila), rather than being forced to pay for their privacy.
With these 2 models, Profila is putting user privacy at the forefront of the internet experience, while recognizing the economic needs of digital platforms.
With increasingly advanced and invasive advertising models threatening the essence of consent and the protection of fundamental rights in the Ad-Tech industry, user empowerment and privacy protection must be preserved. Promoting transparency and accountability in companies’ data collection and processing, Profila’s ZKA system fosters a more equitable relationship between users and platforms.
About Zero Knowledge Advertising & our token
We are building out one of the most crucial solutions in our platform, which is a privacy-preserving, alternative AdTech solution called Zero Knowledge Advertising (ZKA).
With ZKA, we are building a replacement for third-party cookies, where we can still guarantee personalized advertising delivery without the need to share an individual’s personal data with the advertiser.
You can read more about how it all works here:
Zero Knowledge Advertising — How It Works for Consumers
Related to ZKA, we are also launching our Zero Knowledge Token (ZEKE). It is a Cardano-native token which will be used as a reward instrument to increase the user base and incentivize people to learn how to work with key (privacy) features that form part of this new AdTech ecosystem.
ZEKE will also be used as a payment instrument to compensate people who opt-in to receiving ads. Via the Profila app, you can opt-in to view (anonymized or consented) personalized brand content for which brands pay a part of their advertising budget.
Learn more about our Zero Knowledge Token here.
If you are interested to take part , you can already join our newsletter and whitelist here.
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