Mitigating Privacy Risks With Consent Management Platforms

Mitigating Privacy Risks With Consent Management Platforms

Increasing privacy legislation imposes complex and sometimes conflicting compliance requirements on companies, especially those in ad tech. According to a Bloomberg Law article by Steven Roosa and Wenda Tang of Norton Rose Fulbright, consent management platforms (CMPs), essential for managing user opt-out (and opt-in) preferences, present specific challenges. CMPs are intended to ensure compliance but can fail, leading to inadvertent data sharing and heightened litigation and regulatory risks.

Some CMPs, particularly in the U.S., incorporate features aligned more with the EU’s ePrivacy Directive, categorizing cookies in ways not required by U.S. law. This can create unintended liabilities when these categories fail to work as expected, resulting in potential misrepresentation claims.

Roosa and Tang note that CMP failures are often rooted in the complex integration of third-party code on websites and apps, covering analytics, ads, payments, and more. CMPs operate in two modes: sending preference signals or restricting data transmission. However, ensuring CMPs function as intended is challenging in complex development environments, and failure can lead to unintended data sharing or missing opt-out signals.

Detecting these failures is difficult because they typically occur client-side—on users’ devices—outside a company’s direct oversight. This gap in visibility is a primary source of privacy litigation and regulatory risk. Complicating matters, companies may assume their CMP vendors are responsible for compliance, but vendors often disclaim this responsibility, leaving companies ultimately accountable.

To mitigate these risks, the authors suggest that companies implement client-side network traffic analysis, which observes actual data transmissions from a user’s perspective. Regulators and plaintiffs’ experts frequently use this approach to capture whether consent management platforms send the correct signals or properly restrict transmissions. Network traffic analysis offers a proactive way to detect CMP malfunctions, helping companies manage and reduce privacy-related litigation and regulatory risks.