Political ads: The heart of democracy and the economy

The EU reached a milestone in March when it concluded an agreement on the Digital Services Act (DSA), accompanied by its sister legislation the Digital Markets Act (DMA). The legislative package promises to make fundamental and ground-breaking changes in how the online world works and impacts our everyday lives. However, the EU Commission’s digital ambitions will not stop there. The Commission’s proposal on political advertising will double down on efforts ongoing in the DSA’s technical discussions on transparency and oversight for content moderation, writes Konrad Shek, Advertising Information Group (AIG).

Throughout the negotiations on the DSA, and even dating back to those of the General Data Protection Regulation (GDPR), political ads have remained a challenging issue to solve. Political ads play a critical role in democratic elections, ensuring that our political parties and candidates can reach citizens to advocate for their policies, priorities, and values. However, concerns have arisen about the ability of certain actors, both internal and external, to manipulate democratic processes using online political ads to either amplify disinformation or sow discord.

Political advertising is nothing new. It has been around for as long as democratic campaigns have existed. However, the advent of the internet has rapidly shifted the landscape by providing a wealth of information that has transformed campaign ads from billboards to banner ads. As policymakers consider how to regulate political ads, it is crucial that they are crystal clear on the definition of what constitutes a political ad so that the legislation protects political and commercial expression.

While the Commission’s proposal on political ads is still being developed, the definition of political ads will be important. One of the most demanding tasks will be classifying what is and what is not a political ad and who is responsible for making such a decision. Article 2(b) in the proposed regulation says that the scope of the rules will apply to ads that are “liable to influence” political activity. For ads connected to an election, referendum, or a specific political party this is clear cut. However, it can be a subjective interpretation as to whether an issue-based ad is political or not.

Issue-based ads are often run for commercial purposes, by connecting a brand or product with broad societal issues. This is critical for companies to communicate the values that they uphold and connect with customers for whom those values resonate. Grassroots campaigns and civil society organisations would also face an uphill battle, as their ability to promote social causes and garner engagement in public debate could be challenged by this ambiguous classification.

Think about the politics of climate change. Whilst the scientific community are virtually unanimous on the impact of humankind on the climate, there is no consensus on how to address the climate crisis and this has led to politicisation of the issue. If a brand takes a particular stance via an ad about climate change, then it begs the question about whether this activity is captured by the Commission’s definition; and if it is, should it be classified as such?

Think about Adidas’ I’MPOSSIBLE ad promoting its range of sport hijabs for female Muslim athletes. This is an important issue from a freedom of religion perspective – it allows female Muslim athletes to both participate in sports and at the same respect their faiths. But the use of the hijab has not been without controversy in Europe, particularly in France. In addition, far right parties have stood on anti-Islam platforms. Although Adidas may regard their ad as an issues-based campaign, what would stop politicians or political parties from declaring that ad a political ad?

As a result of concerns over what constitutes a political ad, there could be immense uncertainty over legal interpretation and compliance requirements. This is critical for advertisers and platforms alike who are responsible for mediating the ad space. The DSA will implement transparency obligations, which means that the political advertising regulation could make some of these requirements redundant. It is cumbersome when a brand does not intend for issue-based ads to be interpreted as political or to be affiliated with a political party. The result will be reluctance towards using issue-based ads and a potential stifling of innovation in the advertising space.

The burden of compliance with political advertising standards will alter the social benefits of advertising. The draft regulation could deter brands from engaging in issue-based advertising for fear that ads would be perceived as “political” and therefore subject to legal compliance issues and scrutiny by regulators. This is especially important for SMEs and smaller brands that lack the resources and money needed to abide by complex regulations. Companies would have a harder time communicating about their products, brands, and identity to customers.

Political advertising is a critical issue that impacts everyone, from civil society to corporate giants and small family businesses. It is important for democracy and our elections. It empowers political parties to connect with voters on the issues that are most important to them. There must not be any ambiguity as to what constitutes political advertising, and it should be clearly distinguished from issue-based ads produced for commercial purposes. The role and responsibilities of advertisers must also be clarified so that political ads can safeguard and promote democracy rather than disrupting it.

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