The Revised Personal Information Protection Act has been enacted. What has actually happened at Facebook Japan?

The revised Personal Information Protection Act, enacted in April 2022, has prompted many companies to explore new approaches to data privacy.

Meta and Facebook Japan have pursued data handling and data privacy approaches even before the law's implementation, developing technologies based on the principle that " privacy protection and personalization are not mutually exclusive."

Amidst this major transformative period in privacy protection, what direction should data businesses aim for? What is the ideal balance between privacy protection and personalization?

This time, we welcomed Mr. Shinichiro Tanaka of Facebook Japan as our guest, interviewed by Mr. Shun Maekawa of Dentsu Inc.'s Data & Technology Center, who collaborates with him on research and development.

Privacy Protection and Personalization Are Not Mutually Exclusive

Maekawa: At Dentsu Inc.'s Data & Technology Center, I work alongside global digital platform companies like Facebook Japan to solve client challenges using data and technology. Having worked in data-related fields for nearly 20 years, I feel the recent privacy protection trend represents the most significant shift in data marketing over the past two decades. As this is a topic I personally follow closely, I'm delighted to discuss it with Mr. Tanaka from various angles today.

Tanaka: I work in the Marketing Science division at Facebook Japan, Meta's Japanese subsidiary. Our department primarily aims to improve client marketing activities through data analysis and similar efforts. Within that, I focus on building foundational frameworks for data analysis in collaboration with major advertising agencies like Dentsu Inc. Thank you for having me today.

Maekawa: The first topic I'd like to address is the revised Personal Information Protection Law enacted in April 2022. While privacy protection initiatives like GDPR and CCPA have accelerated ahead in Europe and the US, how does Facebook Japan view these domestic legal reforms?

Tanaka: Given that many users of our services register and use them with their real names, we take pride in having carefully addressed data handling and privacy considerations in recent years. Against this backdrop, we view the trend where more service providers handle data more strictly, thereby reducing the overall societal risks associated with data usage, as a welcome development. Indeed, we feel there is a heightened sensitivity towards privacy protection in society, and we've noticed increased communication on this topic with advertising agencies and client companies.

Key Points of the Revised Personal Information Protection Law

Maekawa: Did Facebook make any changes to its Terms of Service in response to this amendment?

Tanaka: To conclude, we did not revise our Terms of Service in response to this legal amendment. This is because we have already engaged in extensive global discussions regarding data handling, making specific changes unnecessary.

Furthermore, Meta has communicated the message that "privacy protection and personalization are not mutually exclusive." This means that even as privacy protection efforts accelerate, we believe we can simultaneously deliver the value of personalized content experiences, which is our strength. Our current fundamental policy is to focus on developing the technology to achieve this. That said, heightened privacy awareness across the entire industry has led to a tangible increase in privacy literacy among every Meta employee. This is happening through discussions with client companies and advertising agencies on actual advertising projects, adapting to the changing times.

Conversely, from your perspective within the advertising industry, how do you view this trend, Mr. Maekawa?

Maekawa: To enhance marketing effectiveness using data, the power of "data science" is essential. However, the tension that arises when decisions change based on analysis results is significant. Precisely because of this, in data science, it is crucial for data analysts to grasp issues like missing data at the time of recording, quirks in output data, distribution biases, and the balance of attributes between the intervention group exposed to the campaign and the non-intervention group. They must thoroughly understand both the potential and limitations of what the data can reveal. Based on this understanding, it's also essential to maintain a stance of conducting "correct" data analysis from a neutral perspective, not starting with preconceived conclusions.

It might sound strange, but as a data analyst, I believe it's crucial to conduct analysis while keeping in mind: "Would this analysis be clearly explainable even if the all-seeing Buddha were watching from the heavens?" In this way, data science is extremely important for enhancing the effectiveness of marketing that leverages data.

However, another major point of discussion has emerged recently: the privacy-first approach. As Mr. Tanaka mentioned earlier, "privacy protection" and "personalization" are not inherently contradictory. Conversely, this implies that there was a potential for them to become contradictory. No matter how "correct" an analytical method may be, it does not guarantee that the decisions made using its results will lead to changes that are truly beneficial for the end-user individuals or society, or that such data usage aligns with their expectations. I believe the underlying reason such discussions often fall short is the perception that data primarily belongs to the company.

The defining feature of the privacy-first approach is that data belongs not to the company, but to the end users themselves—the individuals living their lives. The primary owner of the data is the individual. The first consideration must be whether the use of that data benefits the individual and whether it is being used in ways the individual did not anticipate. To practice data science, we must first and foremost continue to receive data entrusted to us by these individuals. Concretely, this necessitates visualizing how data will be utilized for end users, presenting specific purposes of use, and obtaining explicit prior consent. It could be said that going forward, focus will shift not only to "data science" but also to "data ethics."

As someone involved in data analysis, I view this trend as highly welcome. I firmly believe that as each end-user gains more awareness of how their data is used, companies will increasingly consider data utilization with a stronger focus on customer experience (CX). This will create a virtuous cycle of ideas that maximally fulfill both privacy protection and data utilization.

When I mention data ethics, I mean it goes beyond simply "being mindful of customer experience." It requires accurately understanding legal revisions, of course, but also identifying various risks from four major perspectives to develop the best possible plan.

Personalized information enriches lives, but ensuring transparency is essential

Maekawa: I believe a key point in data utilization is the convenience and benefits for consumers. One such benefit is receiving optimal information and services at the perfect timing. However, I also see a challenge: because we take "data-optimized services" for granted, we rarely consciously appreciate just how much more convenient they make our lives.

For example, my Facebook timeline shows "just the right level of personalized" information—links to articles I haven't read yet about topics I'm interested in or have been following. On the other hand, if I turn off data sharing, I see information outside my usual interests or topics trending in the general public. Personally, I feel that when data is clearly utilized, the information displayed aligns more closely with what I want to know and contributes to my sense of fulfillment in daily life.

A personalized timeline displays information related to your interests (left). A non-personalized timeline shows general topics and things you're not particularly interested in (right).

Tanaka: Exactly. The Yotpo Consumer Experience Survey (May 2021) found that 82% of respondents are willing to share their personal data to receive personalized product information, recommendations, discounts, and services.

However, it's fair to say that users most want to understand how their personal data is used and how it benefits them. We believe it's our responsibility to provide strong protection for the data we use and ensure transparency about how it's used.

In fact, we recently updated our Privacy Policy to make it easier to understand how we use your information and to give you more ways to control the data we provide based on your individual choices. You can manage your privacy settings at any time, and we promise to notify you whenever we make significant changes to how we collect, use, or share your information.

Benefits of Personalization for Consumers

Maekawa: I see. We also maintain ongoing privacy-conscious communication with our client companies and platform operators. However, since this legal revision, we've seen an increase in inquiries like, "Have we properly obtained data consent?" and "Is there any issue with end-user predictability regarding how data is used?" It feels like I check a privacy policy somewhere at least once a day (laughs). Earlier, you mentioned Facebook's policies were already sufficient before the legal changes. Their privacy policy page is also very comprehensive, right? I've been looking at it quite often lately.

Tanaka: Thank you. Meta established its Privacy Center before the law took effect, and you can review Meta's privacy policy on this page. For example, the section titled "How We Use Your Information" includes details about personalization, explaining how we provide users with relevant experiences, including ads, alongside other purposes.

Maekawa: Going forward, it will become increasingly important to consider data utilization while keeping our commitments to end users in mind. We also want to place greater emphasis on data science and data ethics.

Enabling sound data utilization through technology and systems

Maekawa: Given these significant changes in the surrounding environment following legal revisions, what is Meta's specific vision moving forward?

Tanaka: Meta aims to serve both businesses and users. Businesses benefit from the advertising experiences provided by Meta platforms. As mentioned earlier, many users also value personalized experiences.

Our goal is to support client companies' objectives—such as improving cost efficiency, reaching receptive customers, and understanding marketing impact—on the platforms Meta provides. Simultaneously, we want to offer individuals the choice to make their own decisions about the best ways to respect their privacy.

We call this "Privacy-Respecting Performance Marketing." While we've only recently started using this term, it represents our guiding principle and will remain the essence of what we strive for, even as the industry evolves.

Maekawa: Meta is realizing this vision that "performance and data privacy can coexist" through technological development, right? For example, with "Advanced Analytics," which we're collaborating on to develop and provide, marketers can customize their analysis of media performance within a secure environment that protects privacy. Ultimately, whether privacy is safeguarded within the system environment executing data analysis is a crucial point. As an advertising agency analyzing data, we feel this is a framework that makes it easier to propose solutions to client companies.

Tanaka: Exactly. Technological innovation driving the evolution of advertising systems is a key point in advancing our goal that "performance and data privacy can coexist." Our "Advanced Analytics" solution utilizes technologies like privacy filters. It is designed so that aggregated results are only reported when the minimum applicable privacy threshold is met, and only aggregated report data can leave the Advanced Analytics environment.

In an environment where client companies increasingly demand appropriate data usage, it's vital to reevaluate data strategies and find ways to enhance customer experiences using data users have consented to share. We believe Advanced Analytics is a powerful solution for identifying such improvements.

Maekawa: Recently, cutting-edge technologies like Privacy-Enhancing Technologies (PETs) seem to be under development.

Tanaka: Yes. PETs is a collective term for technologies that enable data utilization while respecting user privacy. They are not standalone solutions but foundational technologies and techniques applicable to the data used in our solutions, enabling performance while respecting people's privacy.

At Meta, we believe PETs will form the foundation of next-generation digital advertising. Therefore, we are making multi-year investments alongside academic institutions, global organizations, and developers to build solutions and co-develop industry standards. PETs are diverse, and Meta continues to invest in these technologies, including encryption, data retention on devices, de-identification, aggregation, and the use of randomized data.

Maekawa: I believe such cutting-edge technologies will permeate society in the not-too-distant future, and we intend to keep pace with them. In any case, the trend toward data ethics is a welcome development, so we will continue working with Facebook Japan to promote broader understanding of these activities. Thank you for today.