ICO Launches Call for Views on “Pay or Okay” Business Model and Cookie Compliance Work

The Information Commissioner’s Office (ICO) has launched a call for views on the “pay or okay” business model, which gives users the choice to either consent to personalized advertising using their data or pay a fee for an ad-free version of the service. In a blog post, the ICO provided key takeaways on factors that will determine the validity of consent for personalized advertising in this model.

The ICO notes that data protection law does not prohibit the “pay or okay” model in principle, but emphasizes the importance of ensuring valid consent. Factors such as power imbalance, equivalence between ad-funded and paid-for services, appropriate fees, fair presentation of choices, and user understanding of data usage will be considered in determining consent validity.

The ICO’s developing views on the model will be influenced by regulatory and industry developments in the UK and other jurisdictions. Updated guidance on cookies and similar technologies will be published for consultation after the DPDI Bill receives Royal Assent, setting out final regulatory positions on the “pay or okay” models.

The ICO plans to deploy technology to assess cookie compliance on a larger scale and prioritize enforcement action against non-compliant organizations. The blog post ends with a warning that enforcement action will be the next step for companies that do not meet their cookie consent obligations.

The “pay or okay” model has faced scrutiny but may be favored by companies in the online advertising sector, given regulatory challenges. The ICO’s efforts to provide clarity on this model are welcomed, although the final outcome remains uncertain. Stay tuned for more developments in this area as 2024 promises to be a year of significant change for online advertising.