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Back What are the latest legal challenges in the world of online advertising?

The European Audiovisual Observatory produces a new IRIS Special report
What are the latest legal challenges in the world of online advertising?

Download "New actors and risks in online advertising" 

The European digital advertising market grew by 30.5% in 2021 to €92B. Some of this rapid expansion can be attributed to increased eyeball time on our various screens, a throwback from our old COVID lockdown habits. But it’s not the whole story. With this impressive growth come new societal challenges and the need for increased protection and regulation in order to prevent advertising on the world wide web from becoming some kind of lawless online wild wild west. This new report – New actors and risks in online advertising - by the European Audiovisual Observatory, part of the Council of Europe in Strasbourg, in collaboration with the Institute of information law of the University of Amsterdam, provides a detailed examination of the current legal framework regulating online advertising, the new challenges arising in this field and possible future solutions to meet these emerging issues head-on.

Chapter one of this new report gives a very useful overview of the history and development of online advertising and helps to identify the key players, platforms and formats in the current online advertising landscape.

Chapter two walks us through the current European legal framework applicable to online advertising. The authors zoom in on the work of the European Court of Human Rights and the Council of Europe. Much of the ECtHR case law in this field centres on the right to freedom of expression as protected by Article 10 of the European Convention on Human Rights. Turning to European Union law, the Unfair Commercial Practices Directive aims at protecting us from misleading and aggressive advertising practices. The GDPR and the ePrivacy Directive both aim at ensuring the respect of our personal data and the way in which it is stored, processed and used by the advertising industry. More recently, the DSA package proposed by the European Commission aims at tightening up the rules concerning online intermediaries such as hosting services and platforms, on one hand, and gatekeepers between business users and consumers on the other. The AVMSD, as the main regulatory text concerned with media content providers such as video-sharing platforms, plays a significant role in banning harmful or discriminatory advertising, for example. 

Chapter three looks at the new challenges of harmful and hidden advertising and the provisions in the recently revised AVMSD designed to deal with these. The new 2018 revised version of the AVMSD has been expanded to include further reaching rules on online advertising which aim at reducing children’s exposure to adverts for unhealthy foods and alcoholic beverages, for example. The revised text also brings into line rules concerning VOD service advertising with television advertising. This chapter closes with a case study of influencer-based marketing in the Netherlands.

Chapter four examines another emerging, tech-related issue to challenge European lawmakers: targeted advertising. Never before has our online behaviour been so analyzed, categorized and subject to algorithms. Clearly, the GDPR data protection law plays a key role in determining how our data is used by the advertising industry and the authors of this chapter zoom in on France and Spain in order to exemplify how the transposition of the GDPR coupled with national initiatives can provide data protection. This chapter also looks again at wide ranging implications of the new DSA package in this context.

The penultimate chapter five bring this report right up to date with a focus on advertising and democracy. The UK’s referendum on Brexit and the US election have, in recent years, thrown a spotlight on the possible uses (and abuses) of paid online advertising campaigns for the purpose of political influence. Not surprisingly, the EU has produced a number of new measures to address the impact of online advertising on the democratic system. One set of measures centres on education and media literacy in order to equip us with the skills to make our own critical analysis of whatever message is being pushed at us online. Moreover, the EU has made a proposal for political advertising regulation: the RPA. This new proposed regulation aims at covering the entire complex value chain of actors involved in political advertising, with the overall goal of making the whole process much more transparent. One key measure is based on the obligation for all those involved in political advertising to keep detailed logistical and financial records of their online activities and to make these records available to regulators and other interested parties. 

In conclusion, the authors of this new report stress that “the enforcement of the EU legal framework that applies to online advertising poses a significant challenge to public authorities”, and the ways in which this enforcement may develop will determine “how the new advertising framework set up over the past years will be applied”.  

Strasbourg 21 July 2022
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