Cookie Consent Management—Your Ally to Improving Customer Data Security & Privacy

Cookies, the tiny text files that track our online behavior, have been a cornerstone in shaping the customer experience and journey. However, concerns about privacy and data misuse have led to a growing push to phase out third-party cookies, which track users across multiple websites.

Google, a major player in the industry, initially proposed eliminating third-party cookies. However, on July 22nd, 2024, the tech giant proposed an ‘updated approach’ enabling users to make an ‘informed choice’ that applies across their web browsing.

Despite this change, the broader trend towards data privacy is undeniable. A recent report by Forrester suggests that data deprecation will continue to advance, regardless of Google’s stance on third-party cookies. This is fueled by a US federal privacy law that is back in the spotlight, and more consumers worldwide proactively safeguarding their privacy.

While Google’s decision may grant businesses additional time to get ready for a cookieless world, it will still affect certain elements of cookie consent management.

To ensure that your website remains compliant with cookie consent requirements and addresses user privacy and data security concerns, you can consider investing in some cookie consent management platforms or solutions like OneTrust and CookieYes. These tools act as your cookie manager and help you track how consent is being collected and stored on your website and if it aligns with the GDPR and ePrivacy requirements.

In this blog post, you will learn more about cookie consent management and how it enables you to navigate the privacy-first marketing era. Also, you can deep dive into how businesses can relay user consent preferences from their cookie manager.

Let’s begin!

What is Cookie Consent Management & How Does It Work?

Cookie consent management is the process of obtaining users’ consent to place a cookie in their browser for collecting and storing specific information about them. Users giving consent to a business website means the website can lawfully gather user data via cookies and use it for marketing purposes.

Global privacy laws such as the GDPR, the California Consumer Privacy Act (CCPA), and the EU ePrivacy Directive mandate cookie consent. Here’s how the cookie laws and compliance work:

a. The GDPR applies to companies worldwide that gather personal data from people in the EU. While it only mentions cookies once in Recital 30, its significance lies in treating IP addresses as personal data, thus subjecting them to GDPR. Moreover, the GDPR regulates how consent is obtained from website visitors and obligates companies to prove the consent received from users.

b. The EU member states must comply with the ePrivacy Directive and can enforce stricter rules based on their local laws. The European Parliament will also soon repeal the ePrivacy Directive with the ePrivacy Regulation, which implies additional updates.

Cookie Consent Management Best Practices

1. Ensure your cookie consent notices are non-intrusive, informative, and don’t impact user experience.
2. Create clear cookie banners stating why cookies are used, which ones are in operation, and how users can customize them per their preferences.
3. Provide a direct link to the website’s cookie policy so that users can learn more about the cookies your website uses.
4. Avoid using legal jargon and technical terms on your website; instead, use clear and understandable language.
5. Mention clearly how website visitors can provide or withdraw consent for cookies.
6. State how often your cookie policy is updated and the process followed to update privacy regulations.
7. Mention clear contact details such as an email address or a dedicated privacy contact to help users reach out in case of any queries regarding the cookie policy.

What are the Main Categories of Web Cookies?

1. Strictly Necessary Cookies

These cookies allow both users and websites to perform important functions on the website such as signing into the account, adding items to the cart, and making purchases. Therefore, global cookie laws like the GDPR exempt websites from collecting user consent, which is why they are named ‘necessary’ cookies.

2. Performance or Analytics Cookies

These cookies monitor website performance and user actions and, therefore, they are also called analytics cookies. Performance cookies can collect data related to page visits, the time a user spends on the website, loading speed, etc. However, they do not collect personally identifiable information. Instead, these cookies only use data anonymously to improve the user experience on the website.

3. Functional Cookies

Functional cookies are not essential to running a website. Rather, they help businesses provide a personalized experience to their users by leveraging crucial user data such as their location, preferences, and language. This ultimately leads to enhanced website performance and functionality.

4. Advertising or Targeting Cookies

Targeting cookies track user data and activity. Businesses can use this information to build user profiles, launch personalized ads, and earn revenue from them. By utilizing targeted ads, they can also attract customers, and share them with other advertisers to measure the effectiveness of these ads.

Understanding First-Party vs. Third-Party Cookies

Before diving into the specifics of first-party and third-party data, let’s quickly recap how the conversation about building a privacy-first ecosystem began.

In 2020, Google announced its plan to eliminate third-party cookies due to their intrusive nature and privacy-eroding tracking abilities. For over a decade, marketers and advertisers worldwide have relied on third-party cookies to personalize user experiences. This announcement took many by surprise, leading Google to postpone the phase-out multiple times to give marketers time to develop privacy-centric strategies using first-party data.

Now that third-party cookies are back on the scene, marketers must know the difference between data from first-party and third-party sources, to successfully embrace a privacy-first marketing approach. Let’s take a look.

Why is Cookie Consent Management Important For Your Business?

1. User Privacy and Trust

Cookie Consent Management grants your users the right to know how their data is being used. This also allows them to opt out of data collection and protect their privacy. Users are more inclined to trust businesses that encourage maintaining transparency about their data collection and utilization practices.

2. Data Compliance

Global privacy laws like the European Union’s General Data Privacy Regulation (GDPR) and the California Consumer Privacy Act (CCPA) have made it crucial for websites to obtain explicit consent from users before storing their data. This makes it important for businesses to adhere to the legal requirements associated with these laws.

3. Personalized Experiences

Consent management is more than just mere legal compliance. By understanding user interactions and communications with your website, you can skillfully leverage their consent preferences. This will help you strike a balance between personalization and data privacy and yet deliver a customer-centric experience.

4. Mitigate Compliance Risks

Not complying with cookie consent regulations can lead to hefty compliance penalties, which can also damage your business reputation. However, having an effective cookie consent management platform in place will allow you to create customized consent requests tailored to your specific data processing activities.

What You Should Know About Cookie Consent Models & Global Privacy Regulations Such as GDPR and CCPA?

Types of Cookie Consent Models

1. Opt-In Consent Model

This type of model includes individuals who volunteer and agree to data collection by a website. With the opt-in consent, users allow businesses to use their personal information, and receive emails and newsletters to serve their marketing purposes. The first time a user visits a website, these opt-in consents appear in the form of cookie consent banners, footer, or header banners.

For instance, a user visiting a website can manually ‘opt-in’ and check the boxes of their choice or choose all of them. This way users can ensure that they allow the website owners to save their online activity per the selected boxes.

2. Opt-Out Consent Model

The opt-out consent model describes the consent method where individuals take action to restrict their data collection and use of personal information. Users can also choose to ‘opt-out’ of the mailing list so they don’t receive certain emails from a brand. This consent method has the following two ways to opt-out or unsubscribe:

a. Pre-emptive Opt-Out

In this opt-out method, users stop a data processing activity when they uncheck a pre-selected checkbox, unsubscribe from email newsletters, and decline cookies placed on their devices.

b. Consent Withdrawal

This opt-out method is an extension of the opt-in method wherein users who have previously consented to a data processing activity can opt-out of it if they want.

3. Implied Consent Model

Under the implicit consent model, the website user grants permission to track the browsing activity or collect personal details while browsing the website. Once the user accepts the implied consent mode, all cookies are set on the user’s device and they are informed about it.

4. Granular Consent Model

The granular consent model allows users to specify cookie categories that they would like to activate and deactivate. This model ensures that consent for specific data processes is collected separately. The model seeks permission for distinct use or category of data processing, thus giving the user enhanced control over their data.

5. Cookie-Wall Consent Model

A cookie wall is also called a ‘tracking wall’. It is a cookie consent popup that asks users to accept or decline website tracking and cookies. If the users do not give their consent, their access to the website is blocked. Cookie walls don’t give users a free choice, so they aren’t valid consent under GDPR and are not GDPR compliant.

General Data Protection Regulation (GDPR) and the Opt-In/Opt-Out Consent Models

The General Data Protection Regulation (GDPR) applies to businesses offering their services and solutions to EU residents or monitoring their website behavior. Businesses are required to follow the opt-in consent model to stay compliant with GDPR.

However, GDPR has the following six lawful bases for processing personal data of which ‘consent’ is just a part:

a. Public Interest
b. Legal Obligation
c. Vital Interests
d. Contractual Obligation
e. Legitimate Interests

This implies that if you can rely on any other lawful basis out of the above, consent isn’t mandatorily required. GDPR also asks you to permit the users to opt-out and withdraw their consent after a data processing activity is concluded. In a nutshell, to become GDPR-compliant, businesses should grant users both opt-in and opt-out options.

California Consumer Privacy Act (CCPA) and the Opt-In/Opt-Out Consent Models

California Consumer Privacy Act (CCPA) is a US state privacy law that aims to improve data privacy standards in the state of California. Although it doesn’t explicitly define consent, it does follow the opt-out consent model. Therefore, website owners can utilize the personal data of Californian residents until they choose to opt-out. But this comes with the following exceptions –

a. The amended version of the CCPA i.e., the California Privacy Rights Act (CRPA) grants users the right to opt out of sharing their personal information. To comply with this clause, websites need to set up a prominent link in their Privacy Policy that reads “Do Not Sell or Share My Personal Information”.
b. The pre-emptive opt-out system is unacceptable. Businesses are required to use the opt-in method before selling the personal information of Californian minors.

Key Takeaway

Cookie consent is a critical component of website compliance. With data protection regulations like GDPR and CCPA encouraging stricter laws to protect user privacy, you should consider implementing a promising Consent Management Platform.

While selecting the right consent management solution, ensure that you look at factors like –

a. Privacy Compliance
b. Customizations Enablement
c. Integration Options
d. Scalability and Pricing Plans
e. Technical Functionality
f. Analytics and Reporting Features