Europe’s largest telcos want to take the next step in commercializing digital identities. Four of Europe’s largest telecommunications giants have filed a joint venture (JV) proposal with the European Commission.

Germany’s Deutsche Telekom, France’s Orange, Spain’s Telefónica and the UK’s Vodafone suggest a “privacy-led, digital identification solution to support the digital marketing and advertising activities of brands and publishers”, according to the filing. If the proposal is approved, the four companies will acquire joint control over and equal shares in the JV.

Identity-driven ads

In order to realize their ID-driven advertising platform, the JV will generate “a secure, pseudonymized token derived from a hashed/encrypted pseudonymous internal identity”. That anonymized ID will be linked to a user’s network subscription, which will then be provided by participating network operators.

The four telcos claim that the token will “allow the brand/publisher concerned to recognize a user without revealing any directly identifiable personal data”. They say that this anonymization process will enable advertisers to “optimize the delivery of online display advertising and perform site/app optimization”.

Personalized ads under scrutiny

The filing assures us that the proposed advertising model will be “subject to explicit user consent provided to a brand or publisher”. The telcos also claim consumers will be enrolled in the system “on an opt-in basis only”.

The four telcos need to step carefully here, as the EC and the EU member states have all been highly critical of personalized advertising. In December 2022, the European Data Protection Board (EDPB), a body that coordinates GDPR enforcement across the EU, ruled that Meta will only be allowed to run user advertisements based on user data with user consent.

In accordance with that ruling, Ireland’s data protection authority fined Dublin-based Meta €390 million for illegal data processing in personalized ads on Instagram and Facebook earlier this month. In a similar action, France’s national data privacy agency (CNIL) fined Apple a total of €8 million over allegations of inadequate user consent for personalized ads in the company’s App Store.

In a bid to placate EU officials, the carriers’ filing states that users will have access to “a user-friendly privacy portal”, in which they can review which brands and publishers to whom they have given consent. Consumers will also be able to use the portal to withdraw their consent if they wish.