Dec 14, 2020
Legal Challenges in Ad-Tech
The advertisement-technology (“Ad-Tech”) world is a complex one. In my last post, I attempted to categorize the different players in the Ad-Tech ecosystem into different sub-groups.
The different sub-groups vary not only in what they do but also in their legal best practice & matters that require attention.
Before discussing each sub-group separately, these are some key legal aspects to consider when operating in the marketing field.
For instance, any affiliate marketing platform must know that GDPR compliance is a major issue they need to address in their daily operations.
— — — — — — — — — — — — — But why? — — — — — — — — — — — — -
Think of it this way: you’re working on a CPA deal with an affiliate. Each month the partnerships manager needs to provide you with a report of the acquisitions performed.
To do so, that manager should probably — (i) download the qualifying acquisitions from its CRM, (ii) sieve the data from its report, filtering out all personal data, and (iii) send it your way.
In today’s hyper-speed business perception, it is reasonable to believe that many would try to be as quick and efficient as they can, even if it means skipping that important second step mentioned above.
In doing so, one may or may not be aware of the legal implications that skipping that simple step can have, such as the potential of being considered as a “processor” of personal data, under the GDPR.
Another issue that requires special care and attention by ad-tech companies is a matter of aggressive marketing. While it is not yet known how regulators will enforce the GDPR on online marketing, Vodafone suffered a fine of 12.25 million euros in 2020 for its aggressive telemarketing. Read more here: GDPR Fine Vodafone.
The different legal considerations that may arise include, among many others, data protection regulations, commercial engagement’s restrictions on limitation of liability, conflict of laws provisions per each country, and many others. It is quite impossible to compose a complete guide for all the special considerations listed above, as each is comprised of countless specific challenges.
Two more issues worth mentioning in this space, that are quite extraordinary are:
- As all advertisers know so well, it is highly important to comply with advertising platforms & application stores' terms of use, as any infringement of these may cause significant losses or even ban the advertiser from using those platforms. This is relevant to the internal marketing departments of all ad-tech companies, as well as to any external marketing required for advertisers and publishers (including applications promotional pages).
- Any use of Blockchain technology and consummation of an ICO is an extremely sensitive and complicated process in terms of regulation. In the US, for instance, the SEC charged Salt Blockchain Inc. for their unregistered ICO, forcing the company to return all 47M USD to the investors. While over-eager entrepreneurs like to move fast, it is important to know that launching an unregistered ICO may constitute a criminal federal offense in the US.
Read more here: Salt Blockchain Charged.
While this article may be prolonged for pages more, I believe that the message is clear — the legalization of the ad-tech industry can only become more severe as the regulation tightens, and as public opinion push elected officials to the legislation of more and more robust protective laws.
In the following articles, I will go through each sub-category separately, explaining the fundamental uniqueness of its operational activity, and some issues to consider from a legal perspective.
However, as regulation is ever-changing, and my articles can only cover so much, these should not be considered as a legal opinion, and should be regarded as brief and non-comprehensive reviews.
Once you get a clue and decide how you want to operate your business, contact a personally recommended legal advisor & get the comfort you need to move forward without fear.
Adv. Doron Snapiri
Dorons@shibolet.com
