Four top euro carriers will use phone numbers to target ads and annoy Google & Facebook
European Commission satisfied joint venture won't create competitive problems for locals
In a world saturated with digital ads, four of Europe's mightiest telcos will soon ask citizens if they're willing to volunteer their phone numbers to a startup that promises to deliver targeted ads while also observing European privacy regulations.
The European Commission last Friday approved formation of the joint venture between Deutsche Telekom, Orange, Telefónica, and Vodafone Group – which together boast hundreds of millions of subscribers. It will create an opt-in platform that lets individual submit their phone numbers "to activate communications from brands via publishers."
The EU statement announcing its approval of the entity explains it will "allow brands and publishers to recognize users on their websites or applications on a pseudonymous basis, group them under different categories and tailor their content to specific users' groups."
The only data that is shared between subscribers and carriers is described as "a pseudo-anonymous digital token that cannot be reverse-engineered."
Vodafone drove the idea and asserts "The platform is specifically designed to offer consumers a step change in the control, transparency and protection of their data, which is currently collected, distributed and stored at scale by major, non-European players."
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That last bit is the crux of the matter: the EU and member nations have for years been unhappy that the likes of Google and Facebook dominate the digital advertising market while diminishing privacy.
So while Vodafone's statement makes it plain the joint venture would compete with non-European ad networks, the EU found the new entity "would raise no competition concerns" within Europe.
The four carriers have also pledged to make the platform available to others, and say trials have proven it is possible to deliver personalized ads while preserving privacy.
The as-yet-unnamed ad biz will operate in Belgium. No timeframe for operations commencing has been shared.
The four abovementioned carriers will each hold a 25 percent stake in the AdTech entity.
The joint venture is notable for two reasons. The first is that concerted action by carriers is unusual – never mind on something as tangential to their everyday ops as advertising networks.
The second is carriers in Europe and elsewhere have for years tried and failed to monetize their audiences, then bemoaned the fact that the likes of Google, Facebook, Apple, Amazon, and the big video streamers make enormous profits that just wouldn't be possible without robust communications networks that carry their services to market.
In Europe, carriers have therefore called for Big Tech to contribute to network build costs – an argument that the EU quite likes but which has been mostly dismissed by the likes of Facebook, Microsoft, and Google. They argue that they already pay their fair share of network development costs by funding the development of submarine cables.
Once this AdTech joint venture is up and running, Europe's carriers will have a new way to win revenue. It will help to fund their networks, and by doing so take them into direct competition with the companies they believe should be helping them in other ways.
Grab some popcorn. ®