EU clamps down on sensitive information being used for targeted advertising

The European Parliament has approved new legislation which could hit big tech where it hurts: banning some targeted ads.

A large majority of MEPs voted in favour of the Digital Services Act on Thursday, agreeing to tackle illegal content, ensure platforms are held accountable for their algorithms, and improve content moderation.

The Digital Services Act (DSA), which was first introduced in 2020, will prevent platforms, such as Google, Amazon, and the Meta-owned Facebook, from using sensitive information, such as sexual orientation, race, or religion, for targeted ads. 

It will require services to give users the ability to easily opt out of tracking, and puts pressure on platforms to remove illegal content and products online, including hate speech or counterfeit goods.

“Refusing consent should be no more difficult than giving consent”

After the vote, MEP Christel Schaldemose, who is leading the Parliament’s negotiating team, said: “Today’s vote shows MEPs and EU citizens want an ambitious digital regulation fit for the future. Much has changed in the 20 years since we adopted the e-commerce directive. Online platforms have become increasingly important in our daily life, bringing new opportunities, but also new risks. It is our duty to make sure that what is illegal offline is illegal online. We need to ensure that we put in place digital rules to the benefit of consumers and citizens”.

The DSA will make refusing consent no more difficult or time-consuming to the recipient than giving consent. If their consent is refused or withdrawn, recipients shall be given other options to access the online platform, including 'options based on tracking-free advertising'.

The proposal will prohibit online platforms from using deceiving or nudging techniques to influence users’ behaviour through ‘dark patterns’, which are techniques designed to extort consent to collect personal data, for instance, via repeatedly showing pop-ups. 

Very large online platforms (VLOPs) will be subject to additional obligations due to the particular risks they pose regarding the dissemination of both illegal and harmful content. 

The DSA would help to tackle harmful content, which might not be illegal, and the spread of disinformation by including provisions on mandatory risk assessments, risk mitigation measures, independent audits and the transparency of so-called ‘recommender systems’.

“A broader space for advertising”

In light of this news, Sam O’Brien, CMO of performance marketing platform Affise, responds: “The new EU restrictions on targeted advertising has the potential to completely reshape the tech industry as we currently know it, and will also likely have a huge impact on both the advertising industry, and traditional media organisations. 

“With Big Tech companies being banned from targeted advertisements that could obstruct the use of personal data, such as sexual orientation or ethnicity, marketers will have a broader space for advertising. 

“The new regulation will allow individuals to take back control of their online experience by allowing them to decide the content they want to see, instead of being exploited by surveillance-based advertisements and unfair algorithms.

“The pervasive tracking of all online activity and subsequent advertising leads can lead to discrimination, mental-health issues for children and adults alike.”

“A mistaken belief that targeted advertising causes online disinformation”

However, the proposal was not received well by all. IAB Europe Director of Public Policy Greg Mroczkowski comments: “The use of personal data in advertising is already tightly regulated by existing legislation. It is disappointing that in a mistaken belief that targeted advertising causes online disinformation or breaches privacy and data protection principles, MEPs have decided to pass amendments that not only overlap with the GDPR and existing consumer law but risk undermining these rules, as well as the entire ad-supported digital economy. 

“Ultimately, a Digital Services Act that boosts transparency and certainty across the online economy is in everyone’s interests. We will be consulting with our members and all interested stakeholders to try to come up with solutions that are workable, secure and efficient.”