Big Tech scrambles as Europe ramps up crusade against online advertising

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Europe comes after online advertising – and Big Tech knows it.

The world’s largest tech companies are already trying to forestall Europe’s crackdown on online tracking by announcing a series of new guidelines to limit how and how much they target their users. On Tuesday, Facebook has announced that it will be removing some of its most controversial ad targeting Services, such as the ability to serve ads to people based on indications their religion, sexual orientation, and political affiliation.

Google will phase out support for third-party cookies – a widely used technology that tracks users’ online activities – by 2022, while Apple has already started blocking tracking technologies on its browsers and phones.

These steps are taking place as there is growing consensus among European lawmakers, regulators and activists that targeted online advertising needs to be restricted.

The IAB online advertising lobby opened just last week accepted that it appears likely to be found guilty of the injury Europe’s privacy policy for its widespread system of obtaining consent to use data for targeted advertising.

Some EU lawmakers want a total ban on targeted advertising in the sweeping new rules for content moderation known as the law on digital services, while the MPs work on it a draft of a digital competition rulebook are considering penalties that limit companies’ ability to harass users with Internet advertisements if they violate the new rules.

Regulation in depth

The backlash against online advertising is a sign that Europe’s decision-makers disagree that companies like Facebook and Google have done enough to curtail a practice that many web users find creepy.

“Facebook is feeling the heat, but its new changes are definitely not enough,” said the German Green MP Alexandra Geese, who is working on the draft of the European rules for content. “It is a good sign that they feel like targeted advertising regulation is coming, and we will keep up the pressure to ask for a ban.”

Others are skeptical too. Facebook whistleblower Frances Haugen recently called several parts of the Facebook advertising system such as lack of transparency and microtargeting “really need to be regulated”.

The industry is scared.

IAB is Place ads and the publication of studies predicting dire consequences for small businesses and consumers if a ban on targeted advertising is put in place. They claim a ban would widen the gap between those who benefit from technological developments and those who do not.

But will Europe actually meet its threat to ban targeted advertising? Evidence suggests this could be complicated.

IAB said an awaited verdict found guilty of invasion of privacy will be an easy fix, while the legal precedent of the decision will primarily serve to divide more paperwork to smaller companies and concentrate even more power in the hands of big players like Google, so Observer.

And the proposed ban on microtargeting may not materialize.

No consensus yet

The main legislators in the European Parliament working on the proposal are far from reaching an agreement.

Geese leading demand for a ban is optimistic that Parliament will pull through, especially after a majority of lawmakers backed a non-binding call a year ago to restrict online tracking for ads. But Danish Social Democrat Christel Schaldemose, who heads parliament’s work on the law, said that was unlikely.

“I would prefer a ban, but it is impossible due to the negotiations so far, I have not yet heard anything that leads me to believe that we can find a compromise,” she said.

Schaldemose’s suggestion that platforms should get user consent before they pursue them – far less than a ban on targeted advertising – has found no support from their conservative and liberal counterparts, either.

Czech Liberal MEP Dita Charanzová said EU content moderation rules should not undermine existing data protection laws that are better suited to dealing with targeted advertising.

“It’s too early to tip over [the EU’s data protection rules]. It might even be seen as unhelpful for Europe to tell the world that we have the “gold standard” of data protection rules, only to have completely different rules five years later, “she said.

Top European Commission officials have also warned lawmakers not to mess with the online advertising system.

Vice-President Věra Jourová warned Parliament in October that if Europe imposed a ban it could “destroy” the existing online advertising system, while Executive Vice-President Margrethe Vestager reiterated the advertising lobby, saying that a ban would make life difficult for small and medium-sized businesses would -big corporations.

Even with controversial political advertising, the Commission prefers transparency measures rather than bans – although it may be given more powers to restrict or even temporarily ban targeted advertising for companies that repeatedly violate new digital competition rules.

EU states that are about to reach an agreement on the Digital Services Act have so far shown little interest in the topic. Germany’s proposal to ban personalized advertising for minors found no support.

Schaldemose, the Danish MEP, said she would seek to broker an agreement “to send a strong signal to the Council” to show a united parliament ahead of future negotiations with EU countries, but added that the legislature should not miss any “historic opportunity”, regulate tech giants. “

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