EU lawmakers to legislate on online political advertising

The question

What impact will the EU’s new rules on political advertising have on online platforms?

The key takeaway

The European Parliament has adopted its proposal on legislation intended to tackle disinformation and promote transparency in online political advertising. There are a range of requirements on advertising publishers (which would include online platforms) and further requirements on Very Large Online Platforms (VLOPs) and Very Large Online Search Engines (VLOSEs). The proposed law is intended to work alongside the Digital Services Act (DSA).

The background

In its 2018 Communication, “Tackling online disinformation: a European Approach”, the European Commission outlined its views and objectives around raising public awareness about online disinformation. This was then followed up by a Code of Practice on disinformation and a Commission Action Plan against disinformation, both in 2018. Since then, the Commission has been working with stakeholders to encourage transparency in the context of political advertising.

On 25 November 2021, as part of the European Democracy Action Plan, the European Commission presented its proposal for specific legislation to regulate online political advertising (the Proposal).

The development

Most recently, the European Parliament has established its position on the Proposal and has entered into negotiations with the Council on the text. Key aspects of the Proposal (as currently adopted by the European Parliament) are:

• online platforms (as political advertising publishers) must include certain information regarding the advertisement in a transparency notice. This includes details of the advertising sponsor, period of advertising, amounts spent for the advertising, the relevant election, whether the advertisement has been suspended, and if individuals have been targeted for that advertisement
• online platforms must put in place processes to allow individuals to notify them if an advertisement does not meet the requirements under this proposed law
• VLOPs and VLOSEs are required to make the transparency notices available and updated in real time through the repositories required under the DSA, and
• VLOPs and VLOSEs must assess the systemic risks posed by their political advertising services in the context of their risk assessments under the DSA and establish proportionate mitigation measures to address those risks.

  The Proposal also supplements the GDPR by including specific requirements when processing personal data for political advertising (the Article 12 Requirements):

• when using targeting techniques to provide political advertising services that involve processing non-special category data, the data controller (which may be the online platform) must comply with additional requirements concerning such techniques, and
• online platforms are not allowed to selectively deliver political advertising based on processing sensitive personal data.

If it suspects non-compliance with the Article 12 Requirements, the EDPB may initiate an investigation against VLOPS or VLOSEs. It may also order the VLOP or VLOSE not to provide advertising services to that particular sponsor for 15 days.

In the Proposal, fines for general non-compliance are to be determined by national authorities. However, it is worth noting that the Council’s earlier proposal had set out fines of as high as 4% of the annual worldwide turnover of the provider of political advertising services in the preceding financial year, save for breach of the Article 12 Requirements where the fine shall be in line with the GDPR.

The draft legislation is expected to be approved by the European Parliament and Council and finally adopted by Q3 2023. It would then enter into force on the 20th day following publication in the Official Journal of the European Union.

Why is this important?

There is increasing pressure on online platforms to tackle fake news and outside actors interfering with political processes, most recently seen by Twitter being publicly censured for failing to report its efforts to tackle disinformation under the 2018 Code of Practice on Disinformation. The potential enforcement actions under the Proposal are also significant. For example, banning a platform from providing services to a particular sponsor for 15 days could have a significant impact at what might be a crucial time in politics.

Any practical tips?

Online platforms which are already gearing up for compliance with the DSA would do well to also consider the potential requirements under the Proposal, especially as many of the requirements are intended to supplement those of the DSA. One of the keys to compliance generally under the DSA is transparency and this is clearly echoed in the Proposal. It is also worth keeping an eye on the progress of the Proposal through the legislative process and whether the levels on the administrative fines are retained in the final version.