Google, Meta, TikTok and other companies in the online advertising industry could face a new regulatory landscape in the UK due to new legislation, the creation of a new regulator and even regulatory measures. ‘application.
The government will close a public consultation on its Online advertising program June 8, which could lead to stricter rules for online advertising. Currently, the placement of online advertising in the UK is overseen by the Advertising Standards Authority (ASA), which has no enforcement powers and is governed by a system of self-regulation. Given the growing number of scams and fraudulent product promotions, the government is considering potential changes to existing regulations and how to properly fund regulators to combat harmful advertising.
An interesting perspective is that whatever new regulatory approach is taken, the liability will lie not only with platforms such as Meta, TikTok or Twitter, but also with intermediaries in the online advertising chain, such as Google, TheTradeDesk and AppNexus. .
The three options considered in the consultation are to pursue a self-regulatory approach with some new requirements for intermediaries, publishers and platforms; introduce a statutory regulator to support the self-regulatory approach that would only come into play when the sanctions available to the ASA do not go far enough to ensure compliance; and to create a new regulator with more powers.
Although the government has not said explicitly which option it would choose, there are references in the report to suggest the government may prefer to have a new regulator with strong enforcement powers. For example, regarding this third option, the document stated: “This is probably the most effective approach to increasing accountability in the fight against unlawful harms such as fraudulent advertising…because criminal enforcement powers would probably be necessary for some of the measures required to combat such activity.”
If the government chooses this policy option, it will create a new regulator empowered to take appropriate action, including regulatory powers, sanctions, freezes and bans, and investigative powers to request data, audit companies or undertake investigations.
The consultation does not provide a provisional timetable for a decision, but its fate could be closely linked to the Online security billwhich also contains provisions to prevent fraudulent paid advertising.
If the Online Safety Bill is approved, it will require the largest and most popular social media platforms and search engines to block paid fraudulent advertisements from appearing on their platforms. Under the current online security bill, Big Tech already has an obligation to protect users from fraud committed by other users. But a last-minute change added to the bill emphasizes fraudulent paid ads, whether controlled by the platform itself or by an advertising intermediary. This includes advertisements with unlicensed financial promotions, scammers posing as legitimate companies, and advertisements for fake companies.
While the online advertising program is only at the consultation stage, the Online Safety Bill is already in its second reading in Parliament and, depending on the results, it could pave the way for a secondary legislation on the online advertising industry.
CMA online advertising probe
The Competition and Markets Authority (CMA) was the first regulator in the UK to investigate the online advertising industry and raise concerns about certain practices that may be anti-competitive. This research informed the public consultation on the online advertising program and the proposed changes.
However, the CMA did not stop at this research. It opened a new investigation into Google’s ad tech practices Thursday, May 26, the second in as many months.
Read more: UK launches second investigation into Google’s advertising practices
The AMC said the investigation will focus on demand-side platforms (DSPs), which allow advertisers and media agencies to buy ad inventory from publishers, and ad exchanges, which offer technology to automate inventory sales.
The actions taken by regulators and legislators are mostly complementary. While the CMA focuses on anti-competitive practices, the Online Safety Bill and Online Advertising Program focus on practices that can cause fraud and harm consumers.