Online Advertising Reforms – Lexology

The government has launched a public consultation on its proposals to review and reform the regulatory landscape for online advertising through its Online Advertising Program (OAP). Online advertising has grown exponentially in recent years, and the government is keen to ensure regulators have the proper powers and tools to mitigate consumer harm.

What reforms are on the horizon?

Possible options considered for reforming online advertising regulations include:

  1. extending the ASA’s remit to regulate compliance of platforms, intermediaries and publishers with a new regulatory code known as the Online Platforms and Networks Standards (OPNS);
  2. the appointment of a new statutory regulator to support the ASA for certain consumer damages and provide stronger enforcement powers if necessary; and
  3. completely abandon the self-regulatory system (and potentially also the ASA) and move to a full statutory system for regulating online advertising.

It’s clear from the OAP consultation that change is coming, and it’s now about the scale of change needed to fulfill the government’s outspoken commitment to making the UK ‘the safest place in the world’ to be online.

Online Security

On the same day that the OAP consultation was announced, the government also formally presented the Online Safety Bill (OSB) to Parliament, following a period of pre-legislative scrutiny. The government views these two programs as complementary and recognizes the important interactions between them. While OSB largely focuses on harms caused by user-generated content, OAP will review and seek to remedy harms caused by online advertising, particularly harmful content in advertisements and the placement or harmful targeting of advertisements. OAP’s remit is much broader than that of OSB as it covers the entire online advertising ecosystem and examines whether each player in the supply chain should be doing more to increase transparency and responsibility in the market.

Enforcement powers

The weakness of the current self-regulatory regime for online advertising manifests itself in ongoing battle between the ASA and online influencers who repeatedly fail to disclose social media posts as advertisements. As the ASA tests new methods to encourage compliance with the CAP Code, it is clear that the current system is not sufficient to address this problem and that an enhanced array of sanctioning powers is needed. Whether the government will go so far as to appoint a new statutory body empowered to impose GDPR-style fines remains to be seen. What we do know is that under the OSB, Ofcom will have the power to impose fines of up to £18m or 10% of eligible worldwide revenue (whichever is greater) for non-compliance, which marks a significant break with the status quo. . This approach mirrors that of BEIS consumer law reform proposals which can empower the CMA to impose fines on companies up to 10% of global turnover for breaches of consumer law.

Any advertiser, platform, intermediary or publisher is invited to express their views on the future of digital regulation by responding to the government’s consultation in June 1, 2022. The response procedures are specified in the consultation document. We will provide further comments in due course, however, please contact us if you would like more information or to discuss how we could help you prepare a response to the consultation.