European Cookie legislation costs companies €1.8 billion a year


European Cookie legislation has proven to be very costly for both websites and users. According to a recent report from ITIF (a Washington D.C. based think-tank) the total annual cost of this European law is 2.3 billion US dollars, or 1.8 billion Euros. The costs include compliance costs as well as lost productivity costs for websites operators such as web shops. 

Current European cookie rules
In e-commerce cookies are used to provide a better shopping experience for consumers. Under the current European rules, a web shop has to inform the consumer about which cookies it uses. However, the precise interpretation of the rules on information in the Directive varies in the European Member States. Some countries therefore require web shops to obtain explicit consent about cookies from consumers with an “agree” button, while other countries accept a more simple implied consent. Non-complying web sites can get considerable fines from the national authorities.

Disadvantages for web shops and consumers
Ecommerce Europe has been advocating for a reform of current European Cookie rules, as they are now very burdensome for both web shops and consumers. The findings of the ITIF report support this claim in that:

  • small web shops, with fewer resources due to compliance costs, may decide not to include personalized advertisement for consumers;
  • if internet users have to give their consent every time they visit a website, new visitors will be discouraged from using that website. A potential consumer who wants to buy a product, loses at least 2 seconds to notice, read and click on cookie notifications, even though other users just ignore them;
  • the cookie policy has had few positive effects on users’ online privacy, because they do not often read pop-ups and notifications about privacy, considered boring or too difficult to understand;
  • the differing interpretations of the e-Privacy Directive throughout Europe hamper cross-border online trade.

How to improve the cookie rules
Ecommerce Europe has been encouraging the European policy makers to revise the rules and to develop a clear definition of “consent” and of its timing, based on industry solutions. Director-General Robert Madelin, from the Commission’s DG Connect, has recently affirmed that 2016 may be the year for the revision of the current e-Privacy Directive, as soon as the European policy legislators finish the reform on Data Protection.

Next steps
Ecommerce Europe provides its members with a regularly updated cookie consent rule implementation table, which shows the way in which the consent rule is interpreted in each Member State. This information also forms the basis for Ecommerce Europe’s ongoing discussions with policy makers about reform of the Cookie rules.