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The DSA needs a clear and coherent compromise on digital advertising

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Having secured an agreement on the Digital Markets Act (DMA) last month, the EU is now poised to enter the final stages of negotiation for the other half of the Digital Services Package; the Digital Services Act (DSA). This period will be a crucial time for the DSA as it will need fully resolve a few thorny issues before consensus is achieved, but the debate so far has been robust, writes Konrad Shek, Director, Advertising Information Group.

One of the issues that has received particular focus is targeted advertising. Targeted advertising is an important tool for many organisations across Europe. We know that it enables small businesses to connect with customers; helps social and charitable movements to mobilise support and it generates crucial revenue for publishers. Hence moves to restrict or even ban targeted advertising could have serious implications for these organisations and businesses.

Despite this, it may come as a surprise to learn that there is still no agreed definition of what targeted advertising means. Targeting, itself, is a broad term and it could be said that advertising “targets” people, be it online or offline. Therefore, legal clarity over the definition of targeting is so important, especially as the DSA will have profound and far-reaching effects which could impact thousands of companies across Europe. 

We all agree that the protection of children is of paramount importance. Children are spending more time online, and parents are concerned about what their children encounter online. The principle to protect children with regard to targeted advertising and the use of certain types of data is a welcome one. It is, in fact, a principle that has been enshrined in industry self-regulation codes and enforced by self-regulatory organisations across Europe for many years. However, we need to be sure that any restriction does not result in blanket ban through the back door. This is because to target ads away from children requires some personal data processing to confirm that the user is indeed a child. The alternative is hard age verification measures which would be an anathema to all consumers.

It is barely four years since the GDPR came into force. The Commission has previous stated that the GDPR successfully met its objectives and has become a reference point for the world for high levels of personal data protection. Citizens have become more empowered and aware of their personal data rights. The GDPR already sets out rules on the use of sensitive categories of data which are enforceable by national data protection authorities. Hence, it feels odd to introduce additional provisions through the DSA that replicate what is already in the GDPR. Not only do we risk creating confusion and uncertainty, particularly when it comes to ensuring proper enforcement of the rules, it is also unclear what the outcome will be if there is a clash between the regulatory powers granted in both the DSA and the GDPR. Surely, a full and proper implementation of the GDPR ought to be the way forward.

Another area that has drawn attention of policymakers in the DSA debate are the so-called “dark patterns” that supposedly seek to influence consumer behaviour via online user interfaces. But we struggle to see the difference between dark patterns and the well-established legal concept of unfair commercial practices. In fact, recent Commission guidance makes it clear that Article 6 of the Unfair Commercial Practices Directive covers any misleading actions that deceives or is likely to deceive the average consumer and is likely to cause him or her to take a transactional decision that he or she would have otherwise taken. In other words, we already have a legislative framework which deals with so-called “dark patterns”. However, current DSA proposals are overly broad and vaguely defined without any reference to existing legislation or guidance and yet they seek to ban any practice considered a “dark pattern”. Any layperson could recognise the massive implications for user interaction online and it will be a nightmare for any regulator to enforce. While there are certainly practices that need examination, the solution is definitely not a wholesale ban.

The DSA is one of the most important pieces of legislation for the EU in recent years. Much progress has been made in the negotiations so far. We are still hopeful that a clear and coherent compromise on digital advertising can be achieved before the negotiations come to an end.

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EU Reporter publishes articles from a variety of outside sources which express a wide range of viewpoints. The positions taken in these articles are not necessarily those of EU Reporter.

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