Is online advertising in the EU about to change forever?
Part 1: We look at the proposed legislation
Dramatic changes to the way advertisers run their online promotions are set to come into force in Europe. Changes to the existing legislation won’t just impact Europeans but anyone wanting to advertise in Europe and from Europe.
Online advertising in Europe has had a quite troubled history. In 2018, revelations about Cambridge Analytica threatened to undermine our democratic systems. In the aftermath of the US’ 2016 elections and the Brexit referendum, we suddenly had to come to terms with the fact that opaque targeting tactics could play a role in shaping the outcome of major political events.
Four years later, the European Union seems determined to show it has learned its lesson from the event that changed the reputation of social media, online advertising and advertisers. While social media platforms have taken steps towards self-regulation, the EU wants more: more transparency, more accountability and more limitations on data collection and handling by the tech giants.
In November 2021, the European Commission formalised these asks in a proposal to regulate political advertising. The proposal is currently being reviewed by the Council and the Parliament, that has recently issued a draft opinion. The aim would be to implement the regulation by spring 2023, one year before the next Parliament’s elections.
In short, online advertising as we know it in Europe is likely to change. Although the outcome of the negotiations is yet to be written, let us look at the first projections for the future of platform advertising and what they might mean for businesses and organisations.
How the EU legislation might change
Who might be affected? As things stand now, the legislation would apply to any person or entity using paid social media to advertise around topical issues. For example, promoted messages around climate change, energy supplies, food safety and other topics high on the Brussels agenda could fall within the new rules.
Crucially, the regulation could apply to political advertising sponsored, paid, prepared or disseminated in the Union, irrespective of the location of the advertiser or sponsor. This means that not only European campaigns taking place in Europe, but also campaigns targeting Europe and sponsored from the US, for example, would be affected. And there’s more: also campaigns planned to run in India, for instance, would fall within these restrictions if sponsored from Europe.
What qualifies as a political advert? This definition sits at the core of the debate over this new regulation. Some EU member states already have their own definition of political advertising, others do not; so, the EU legislation will need to provide a harmonised understanding of the phenomenon, in order to regulate it.
In principle, online advertising only qualifies as political if it aims to influence an election, a referendum or the legislative process. However, multiple factors will determine where to draw the line – among them are:
- the content of the message
- the sponsor
- the audience targeted
- the context and period of dissemination, such as electoral or referendum periods
- the objective of the message, if it aims to influence the relevant electorate.
While there is still room for change, the scope of the definition will determine how far the rules will reach.
More transparency for campaigns. According to the current proposal, campaigners would need to: put a ‘political ad’ label onto their advert, disclose what type of personal data is used for the targeting strategy, and declare who or which entity is controlling the campaign.
Now, all eyes turn to the European Parliament, as the proposal continues its legislative journey. By the beginning of September, new amendments are expected from the LIBE Committee, while at the end of November the IMCO Committee will vote on the amended proposal.
Stay tuned for our next blog, where we delve into what the legislative changes might mean in practice for social media platforms and campaigners.