New proposals from the W3C, a key standards-making body for the Internet, could pose an existential threat to the Open Web.
By adopting extremist “privacy” definitions, which have been repeatedly rejected by regulators, the W3C’s new Privacy Principles could significantly damage independent publishers who rely on digital advertising to fund consumer access to their properties.
The W3C’s anticompetitive Principles would significantly limit the use of the interoperable data used by the vast majority of publishers to monetise their businesses, whilst exempting walled-gardens’ use of the same data across their platforms. This disproportionate impact on smaller rivals across the open web would be a body blow for publishers who wish to provide their content and services via open standards and browsers, rather than proprietary APIs and app stores.
The W3C claim that publishers could look to contextual advertising and subscriptions to replace this revenue. However, the subscription model has been proven to only be viable for the largest organisations. Additionally, even these larger publishers have seen significantly diminished revenues from contextual advertising, which still relies on identical data collection and processing for fraud, billing, pacing and other standard business purposes.
Smaller publishers are the backbone of a vibrant and competitive open web and destroying their business models plays into the hands of the tech giants.
Outside of advertising, the proposals also seek to bundle and migrate entire markets (VPNs, digital wallets, ad serving, attribution) into browser control.
Additional criticism has been levelled at the proposals on the basis that they are excessively detailed and complex, meaning that their implementation will be hugely challenging for digital businesses.
Questions have also been raised about whether the Principles breach the W3C’s own Antitrust Guidelines by ‘encouraging or forcing others to modify a business relationship with third parties
A number of W3C participants, including the Movement for an Open Web, have objected to the Principles but their comments have largely been rejected without substantiation by the group.
Many of the issues with the Principles arise from a fundamental misunderstanding of privacy law. The Task Force that wrote the Principles relies on the discriminatory and rejected differentiation between first and third party data and on-device versus server-side processing. Recent court rulings and the UK’s ICO have rejected this position in favour of viewing the sensitivity of data based on the context of its usage, not its ownership status, as well as distinguishing personal data from deidentified, non-personal business data.