Authors: Heidi Waem and Simon Verschaeve
The arrival of the internet has revolutionized the advertising landscape, and since the appearance of the first banner ad in 1994, innovative technologies have been developed in the field of online advertising. Since then, new stakeholders, such as online platforms, have emerged and a whole spectrum of new digital (behavioural) advertising means are used that increasingly rely on the use of data for online advertising.
While online advertising brings lots of opportunities for companies wanting to promote their services and products, it may also have adverse effects for fair commercial competition, be perceived as a disturbing factor by users of online services and impinge on fundamental rights of users.
To safeguard these rights and fair competition, there is an established legal framework in place today in the EU consisting of a patchwork of rules focused on enhancing transparency vis-à-vis the recipients of the advertisements, on the one hand, and restricting or prohibiting certain practices, on the other hand. In addition, the content of online advertising is also subject to a range of general and sector-specific self-regulatory and legislative requirements that apply, in principle, indiscriminately to all types of advertising.
Although the use of personal data for online advertising is regulated in general under the General Data Protection Regulation, more targeted regulation has been adopted or proposed recently that will introduce additional rules for more sophisticated data use in the advertising sector.
In this article, we provide a schematic overview of these new legal instruments establishing specific rules for online advertising (stricto sensu). Essentially, they contain stricter transparency obligations for specific actors and additional restrictions on the use of certain types of data for online advertising. At the same time, the upcoming direct marketing rules will be more harmonised across the EU as they are included in EU-wide regulations whereas most of the current rules stem from EU directives and hence transposed in national legislation.
As you will see from the overview, the rules are in a certain way limited but nevertheless impactful on online advertising, especially when combined with the recent case-law from the Court of Justice and national supervisory authorities in this area (e.g. the decision by the Irish Data Protection Commissioner on contract as a legal basis for targeted ads (read more here); the CJEU decision in case C-102/20). The framework may of course still further evolve as the pending proposal texts go through the legislative process in Brussels.
- Transparency requirements
| Legal instrument | Requirement | Scope of application |
| Digital Services Act (Regulation 2022/2065) |
Requires, for each specific advertisement, that information be provided to allow the recipient of the service to identify: – That the information is an advertisement; – The natural/legal person on whose behalf the advertisement is presented; – The natural/legal person who paid for the advertisement if different from the person on whose behalf it is presented; – The parameters used to determine the recipient to whom the advertisement is directed.
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Applies to providers of online platforms that present advertisements on their online interfaces |
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Requires that recipients of the service are offered a functionality to declare whether the content those recipients provide is, or contains, commercial communications. When such declaration is submitted, that content must be ‘flagged’ as commercial communications to other recipients (through prominent markings and in real time). |
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| Requires that a repository is made publicly available containing certain specific information on advertisements presented on their interface for the entire period during which an advertisement is present on the online interface and for one year thereafter | Applies to providers of very large online platforms or very large online search engines that present advertisements on their interfaces | |
| Requires the European Commission to encourage and facilitate the drawing up of voluntary EU-wide codes of conduct for actors involved in the online (programmatic) advertising value chain. | Applies to the European Commission | |
| Digital Markets Act (Regulation 2022/1925) | Requires that, on a daily basis and free of charge, information is provided to each advertiser to which it supplies online advertising services on (i) the price and fees paid by the advertiser, (ii) the remuneration received by the publisher (subject to the publisher’s consent), and (iii) the metrics on which the prices, fees and remunerations are calculated. |
Applies to core platform services of companies designated as gatekeepers.
Core platform services include online advertising services which comprises any advertising networks, advertising exchanges and any other advertising intermediation services, provided by an undertaking that provides a core platform service. |
| Requires that, on a daily basis and free of charge, information is provided to each publisher to which it supplies online advertising services on (i) the remuneration received, and fees paid by the publisher, (ii) the price paid by the advertiser (subject to the advertiser’s consent), and (iii) the metrics on which the prices and remunerations are calculated. | ||
| Requires that access is provided to advertisers and publishers to (i) the gatekeeper’s performance measuring tools and (ii) the data necessary to allow advertisers and publishers to independently verify the advertisements inventory. | ||
| Proposal for a Regulation on the transparency and targeting of political advertising |
Requires, for each political advertisement, that the following information is made available: – a statement that it is a political advertisement; – the identity of the sponsor of the political advertisement, and, where applicable, the entity ultimately controlling the sponsor; – where applicable, a statement whether the political advertisement has been targeted or amplified; – a transparency notice clarifying the wider context and aims of the political advertisement.
Where the political advertising publisher is a very large online platform, the transparency notice must be made available in the repository to be kept under the DSA. |
Applies to political advertising publishers |
| Requires that information on political advertising services is included in their management reports (as per Directive 2013/34/EU) | Applies to political advertising publishers | |
| Proposal for an e-Privacy Regulation |
In essence: adoption of existing e-Privacy and e-Commerce transparency rules for sending direct marketing:
Requires to (i) reveal the senders’ identity and use effective return addresses or numbers, (ii) identify the communication as marketing, (iii) provide information on the identity and contact details of the person on whose behalf it is sent and (iv) clearly and distinctly provide an opt-out or right to withdraw consent.
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Applies to natural or legal persons using electronic communications services for sending direct marketing communications |
- Restrictions on data use
| Legal instrument | Restriction / prohibition | Scope of application |
| Digital Services Act (Regulation 2022/2065) | Prohibits advertisements based on profiling using special categories of data | Applies to providers of online platforms (and indirectly to persons relying on these platforms to display advertisements) |
| Prohibits advertisements based on profiling using personal data of the recipient of the service when they are aware with reasonable certainty that the recipient of the service is a minor | ||
| Digital Markets Act (Regulation 2022/1925) | Prohibits, for the purpose of providing online advertising, the processing of personal data of end users using services of third parties that make use of core platform services of the gatekeeper, unless the end user has consented thereto. |
Applies to core platform services of companies designated as gatekeepers.
Core platform services include online advertising services which comprises any advertising networks, advertising exchanges and any other advertising intermediation services, provided by an undertaking that provides a core platform service. |
| Proposal for a Regulation on the transparency and targeting of political advertising |
Prohibits, in the context of political advertising, targeting and amplification techniques involving special category data
Prohibits, in the context of political advertising, targeting and amplification techniques involving personal data of a data subject that is known with reasonable certainty to be at least one year under the voting age established by national rules |
Applies to any actor wanting to use these techniques |
| Proposal for an e-Privacy Regulation |
In essence: adoption of existing e-Privacy rules for sending direct marketing:
Prohibits sending direct marking by using electronic communications services, unless (i) the end-user has consented thereto or (ii) the conditions of the ‘soft opt-in’ exemption for existing customers are fulfilled. Member States may, however, limit the duration of validity of the ‘soft opt-in’. |
Applies to legal and natural persons conducting direct marketing communications to end-users using electronic communications services |
(*) The italicised legal instruments in the tables above are at the moment of publication of this article not yet finally adopted by the EU legislator.