'Pay or Okay' Regimes for Online Ad-Tracking Growing in Europe, New Noyb Report Says
Arrangements that force website users to pay a fee if they refuse to consent to ad tracking are on the rise in Europe, Austrian advocacy group Noyb said in a report it published Thursday.
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Data protection authorities haven't adopted a consistent EU-wide approach to so-called "Pay or Okay" systems, Noyb said, which are also known as pay or consent. The report analyzed industry arguments for and the economic impact of the systems ahead of upcoming European Data Protection Board (EDPB) guidelines.
An Austrian newspaper introduced Pay or Okay in 2018, and Meta adopted the approach for Instagram and Facebook in 2023, Noyb noted.
Many newspapers claim they need pay or okay revenue to finance quality media, but Noyb argues that digital advertising accounts for only around 10% of media's revenue. Targeted advertising accounts for even less, Noyb added: roughly 5% of newspaper and magazine revenue stems from processing personal data for advertising purposes.
In the report, Noyb acknowledges the need for media's survival, but "the idea that pay or okay could single-handedly or in any relevant form save European news media is not based on known facts." The report adds, "Given that on average only 5% of revenue of the press comes from programmatic advertising, pay or okay would only increase the income of the press by 0.82% on average."
Media companies also argue that Pay or Okay creates "some form of economic fairness," Noyb said. However, academic research found that publishers earn 0.24 euros ($0.28) per user per month from tracking, but make 3.24 euros ($3.80) per user per month when the pay option is chosen.
Another issue is that, under the General Data Protection Regulation, user consent must be given freely to be deemed valid, Noyb said; that means if any system produces consent rates that don't match the true wishes of data subjects, it's manipulative.
Industry reports show that Pay or Okay systems consistently deliver consent rates of 99% or more, while studies show that only 0.16-7% of users want to be tracked or have their data used for personalized ads, Noyb added. "According to all case law and EDPB guidance, pay or okay is unlawful under current standards," the report concludes.
"The EDPB now has the opportunity to take a clear stance on this issue in its upcoming guidelines,” said Noyb data protection lawyer Felix Mikolasch.