European Exodus

On Saturday the 26th of May a new law passed by the EU will come into effect governing the use of Cookies in websites hosted and operating inside the EU.  The law in a nutshell states that any site inside the EU must gain explicit permission from site visitors to use cookies, if the user denies permission then the site can't use cookies.  Sound simple enough but the aftermath and the implementation is nothing but one huge headache with far reaching implications.

To start I guess I should explain what a cookie is.  Basically in order for a website to remember a little about who you are when you visit, it stores some information in a small text file called a cookie.  That file is managed by your web browser and can be requested by websites.  Cookies are most often used for recording session data, they are integral to a website allowing you to "log in" - without cookies the site can't mange a session and it wouldn't be possible for you to use any logged in services, e.g. posting comments or replies, having a member profile, having a username etc.

The second most popular use for cookies by far is page analysis.  This allows a website to gather statistics on which pages are the most popular etc.  You can do all this without cookies as I have mentioned in a previous post, but in order to do all this without cookies you need to know a lot about the Internet and how it actually works.  The problem is that most people don't.  This is where Google comes in, and many other companies.  They provide JavaScript code you add to your website.  In the case of Google this code is provided and maintained by Google Analytics.  Practically every site you visit will use some form of Analytical software like this.  However this solution requires cookies.

The new EU law on cookies states that any cookie which is not strictly necessary as part of the site's operational features must require permission from the user.

Now here's the problem which we have already highlighted, a lot of people don't know how the Internet actually works.  So when prompted with the question "can this site store cookies on your computer?" they respond "No" thinking they are some kind of virus or simply out of paranoia.  The following graph shows the tracked user visits to the Information Commissioner's Office website.  The Graph shows average visitors tracked before users had to agree to cookie usage and after users had to agree with cookie usage:

If we take the highest point pre cookie opt-in, that's approx 12,000 visitors and match it to the highest post op-in which is approx 1,200 we can see that about 10% of users will allow cookies and the other 90% will opt-out.  This could also be biased based on the fact that the site is a government website and that may influence the level of trust the user has in allowing the site to store cookies.

A lot of website are ad-supported and many websites use on-site advertising that is not third party related, e.g. Amazon advertises products to its visitors based on cookies it sets and uses to track the items you look at, offering up items others looked at too etc, this is called context-aware advertising and a lot of sites rely on it to make ends meet.

Now for the point of this post the title as it says "European Exodus" - I would be very wary of this law and the impact it will have on online business.  I run a website, not linked to this blog and I have already had to make several changes to comply with this new cookie law and for me it was a pain in the arse quite frankly and I am a one-man-operation.  If I was a large company based in the EU I would realistically assess if it was cheaper to actually move outside the EU, not have to comply with this ridiculous law and maybe even cut my running costs while I am at it - the IT industry in India is massive and is growing at a phenomenal rate, if I moved operations there I may make massive savings - as long as you are based outside the EU then this law does not apply to you.

The EU and the idiots sitting in Brussels are playing a very dangerous game at a time of economic uncertainty, a vast Exodus of IT services from Europe to other countries could be a massive blow to any existing economic recovery.  Will there be a European Exodus of Tech Giants?