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EPC writes to the EDPB with regard to "consent or pay" model

11 December 2023

  

 Dear members of the European Data Protection Board,

 

A vivid debate on subscription models or “consent or pay” has started following the recent decision by Meta (November 2023) to implement changes to their services in the EU, where Facebook and Instagram users would have either to consent to the processing of their data for advertising purposes, or pay in order not to be shown advertisements and access the service.

 

The European Publishers Council, representing leading European news media and publishing groups, would like to contribute to the discussion as we understand that the EDPB will be addressing the issue in its December plenary session. We urge the EDPB to recognise the distinct role of news publishers in providing trusted journalism, diversity of opinion and fulfilling vital functions in holding authorities accountable and underpinning democracy as compared to that of platforms. Data protection policies that recognise the essential function of journalism are necessary to preserve media diversity without impeding the public's access to information

 

In the digital age, financing of the media has become increasingly challenging, with most media still relying on advertising revenues to finance all or part of their journalist activities. In recent years, publishers have faced several specific challenges that impact their advertising revenues, sustainability, and overall success, primarily arising from the intensive competition from the dominant platforms which dominate the digital advertising space and siphon off the lion’s share of the digital ad revenues. The shift to programmatic advertising, which facilitates amongst other things the ability of advertisers to benefit from a high degree of personalisation when targeting advertising to consumers, especially via the dominant platforms, together with the changes in consumer behaviour, the rise of Ad Blocking and the fragmentation of audiences contribute to the challenges that media are confronted with.

 

An independent press is vital to democracy, providing critical oversight and informing the public. Financial instability in publishing risks eroding this democratic cornerstone, highlighting the need for policies that support the press's sustainability. For all these reasons, more and more publishers are shifting business models to focus on subscriptions although advertising will continue to be an important source of revenue. As the media landscape evolves, subscription models allow publishers to adapt more easily to changing market trends. They can experiment with new formats, platforms, and distribution methods without solely relying on traditional ad revenue sources. Subscriptions provide a predictable and steady source of revenue for publishers. Unlike one-time purchases or ad-based models, subscriptions ensure a regular income, which is essential to financial stability and long-term planning. Given that advertising revenues can be volatile and unpredictable, subscription models enable publishers to invest in high-quality content, based on a more consistent revenue stream. This provides for production of more in-depth, and valuable content that can attract and retain subscribers. Furthermore, subscriptions provide valuable data about user preferences and behaviour. Following the user's chosen preferences, publishers are able to build more direct relationships with their readers in privacy-respectful ways, using these data to personalise content, improving user engagement and loyalty, leading to higher retention rates. Effectively, there is a community that is built around the publication which enriches the experience for both publishers and readers.

 

However, we should not overestimate that subscriptions only would be able to fund a diversity of editorial content. Many readers do not want to pay for subscriptions as there is also the phenomenon of “subscription-saturation” where users must decide where to spend their money across a choice of a multitude of other subscriptions and telco/broadband charges. Some users on the other hand believe that taking only one news subscription can create a fear of missing out on what others are publishing or indeed curtails their ability to get news from various editorial sources.

 

Several publishers have also started offering a range of paid-for models to users who do not wish to consent to their data being used for personalised advertising. As journalistic products are expensive to produce and the competition, coming also from the always free to access Public Service Media, is intense; publishers cannot afford to offer their products for free or based on significantly reduced advertising revenues. It is paramount that fair “consent or pay” solutions are available as a legal mechanism, in order for news publishers to be able to finance the production of their content. “Consent or pay” should of course also be combined with fair, transparent and proportional data processing. Neither the presence or absence of a consent or pay-solution determines the protection of user data in itself. It is of utmost importance that it is understood that the alternative to users contributing to the financing of journalistic content they consume through receiving advertising, is not a service without advertising. If this were to happen publishers would be obliged to install paywalls for all readers, or suffer a dramatic reduction in the financial fundament of journalistic publishers, with a severe reduction in the availability of free, independent and high-quality journalistic content in Europe. Therefore when assessing Meta’s “consent or paysolution, we ask for EDPB to be wary of the effects of general statements on the validity of consent or pay as such.

 

Publishers’ business models should not be compared or confused with Meta’s, as these are offering two completely different “products” which serve completely different goals. Also, Meta’s data practices can and should be assessed based on what processing they perform based on the consent. The market power of Meta's services in the EU and the very strong network effects of social media platforms (since all your contacts are on Facebook and Instagram) cannot compare to a publisher’s website that is one of hundreds, if not thousands, available to users to choose from.

 

Publishers remain committed to building stable financial foundations in order to maintain their editorial independence, produce trustworthy journalistic content, and as such would welcome an open debate with the EDPB on these important matters before any decisions are taken. 

 

Your sincerely,

 

Angela Mills Wade

Executive Director

European Publishers Council

 

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