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18 September 2023
newsletter
hungary

Do your customers know that your website is tracking them?

Many local enterprises use ad management and marketing tools from tech giants like Meta (formerly known as Facebook), TikTok and Google (Meta Pixel, TikTok Pixel, Google Analytics), enabling them to reach their intended audience more effectively and track visitor activity on their websites. You cannot find a marketing professional today who would not suggest at least one of these services to their clients.

These services use "pixels" – trackers embedded in websites – to gather data about visitors. The data collected includes viewed products, search histories, chosen options and frequency of site visits. The possibilities are limitless. Data from users is analysed, creating detailed profiles to facilitate targeted advertising and personalised content delivery. Picture your Facebook timeline: relevant news, articles and adverts are displayed as if someone had handpicked them for you.

This is no coincidence, as the gathered information helps companies identify their target audience, reach potential customers and adjust to their requirements. The more thoroughly a business understands the preferences of its potential customers, the better the conversion rate will be from visitors to customers, and from customers to regulars.

Using pixels is relatively straightforward. By accessing the appropriate control panel (such as Google Analytics or Meta Business Settings), a hidden tracking tool can be added to a website with only a few clicks. This tool will record and send visitor activity to various analytics software for processing.

Businesses using pixel tracking receive analysis on a great deal of data. For example, Facebook's tracker records 17 different events related to a website visit. It keeps track of the user's purchased items, subscriptions, wishlists and shopping cart contents. The service provider registers this information, linking it to the visitor's IP address, device, geographical location and even screen resolution.

The user data collected in this process is not only accessible to the company using this service, but also to the service provider (e.g. Meta) itself, which may store its data on users in the European Union as well as in the United States.

With the European Commission's adoption of an Adequacy Decision on the Framework Agreement with the United States in July, the use of tracking services – and the transfer of website visitors' data to the United States – will be significantly easier. No longer will additional safeguards like standard contractual clauses or transfer impact assessments be required, provided that the recipient service provider is on the US privacy framework list and has been verified by the company sending the data.

However, businesses and marketing agencies may not be aware that using analytics services demands the consent of website visitors for their data to be processed and transferred. Users must be notified in advance and in a clear and specific manner of the data collection process so they can provide their consent.

A major concern regarding pixel tracking is the lack of transparency in the data collection practice. Many website visitors are entirely unaware that their data is continuously being collected and analysed as they browse through trackers integrated into the website code.

To preserve the trust of customers and abide by applicable data protection laws, it is crucial that businesses provide their website visitors with detailed information about the circumstances in which their data is collected and transferred.

The consequences of failing to disclose this information can be serious, as demonstrated by the HUF 10m fine levied by the National Authority for Data Protection and Freedom of Information (in Hungarian: NAIH) against TV2 Media Group. Thus, it behoves every responsible enterprise to not only be aware of how these tracking services work, but to provide complete and transparent information to website visitors and adhere to all data protection regulations.

Áron
Hegyi

Attorney at Law

hungary