Advertising Technology Sector to Adjust to Impending Privacy Regulations and Trends
2025 is shaping up to be a game-changer for the adtech industry, with a wave of privacy laws and trends taking center stage. Here's a look at some of the key developments that are set to shape the landscape:
1. State Privacy Laws Galore in the US
A flurry of new state privacy laws is on the horizon, with at least eight new ones expected to be enacted in jurisdictions like Maryland, Nebraska, and others. These laws will mainly focus on enhancing individual control over their personal data, introducing provisions such as the right to know, the right to deletion, and the opt-out of rights.
2. Leveling the Playing Field with the Digital Markets Act (DMA)
The Digital Markets Act (DMA) in the EU aims to promote fair competition and innovation in the digital landscape. It does this by regulating the practices of large online platforms, known as "gatekeepers," including tech giants like Amazon, Apple, Google, Meta, Microsoft, and TikTok. By establishing a level playing field, DMA seeks to foster innovation, user choice, and overall quality, ultimately maximizing the potential for businesses to leverage digital growth.
Noncompliance with the forthcoming regulations could result in substantial fines. Initial infringements might incur fines up to 10% of the company's total worldwide turnover, while repeated infringements could lead to fines reaching up to 20%.
3. Joining the Bandwagon: India, Brazil, and China
Countries like India, Brazil, and China have enacted comprehensive data protection laws, with India’s Digital Personal Data Protection Act (DPDP), Brazil's Lei Geral de Protecção de Dados (LGPD), and China's Personal Information Protection Law (PIPL) leading the charge. These regulations concentrate on governing the handling of personal data and preventing unauthorized disclosures.
As these laws continue to evolve, their enforcement is expected to become increasingly robust, highlighting the growing emphasis on data governance and privacy.
4. Bidding Adieu to Third-Party Cookies
The use of third-party cookies is being curbed, with organizations like Firefox already blocking cookies from cross-site trackers. Google previously planned to phase out third-party cookies through its Privacy Sandbox initiative, introducing APIs like the Attribution Reporting API (ARA). However, following concerns raised by the U.K.'s Competition and Markets Authority (CMA), Google is now reassessing its approach and exploring alternative privacy solutions.
5. AI under the Spotlight
The European Union is developing a regulatory framework—the EU AI Act—which adopts a risk-based approach, categorizing AI systems according to their potential severity and likelihood of harm. High-risk AI systems will be subject to stringent requirements, including the implementation of robust risk management systems and strict governance of data usage.
Stay tuned for more updates as the adtech landscape continues to evolve in response to these emerging privacy laws and trends.
Vishal Parekh, a prominent figure in the adtech industry, has emphasized the importance of compliance with the upcoming privacy laws, highlighting the potential impact on businesses. By 2025, noncompliant companies could face fines reaching up to 20% of their total worldwide turnover, according to the Digital Markets Act (DMA) in the EU.
The wave of privacy laws is not limited to the US, as other countries like India, Brazil, and China have already enacted comprehensive data protection laws. These regulations, such as India's Digital Personal Data Protection Act (DPDP) and Brazil's Lei Geral de Protecção de Dados (LGPD), are expected to have significant implications for the adtech industry, given the emphasis on data governance and privacy.
Lawmakers worldwide are actively restricting the use of third-party cookies, with organizations like Firefox already blocking cookies from cross-site trackers. This shift in policy is set to impact the adtech industry in the coming years, and companies need to adapt their strategies to remain compliant as regulations evolve.
