Prohibit targeted advertising in Digital Services Act, EU data watchdog says

The EU should prohibit targeted advertising as part of new rules against Big Tech platforms in the bloc's Digital Services Act, the EU's institutional data protection watchdog has said.

The EU should prohibit targeted advertising as part of the Digital Services Act, the EU data protection supervisor has said. [Shutterstock]

The European Union should prohibit targeted advertising as part of new rules against Big Tech platforms in the bloc’s Digital Services Act, the EU’s institutional data protection watchdog has said.

The recommendation comes as part of an opinion from the EU data protection supervisor (EDPS) on the European Commission’s proposals for the Digital Services Act (DSA) and the Digital Markets Act (DMA), which the EDPS released on Wednesday (10 February).

The Commission’s December proposal for a Digital Services Act pitched the idea of greater transparency obligations for platforms in the field of targeted advertising, amongst other requirements in the field of content regulation. Penalties for violations of the rules include fines of up to 6% of a company’s annual income.

In the field of online advertising, the EU executive proposed rules that would give users of online platforms immediate information on the sources of the ads they see online, including granular information on why an individual has been targeted with a specific advertisement.

But for the EDPS, proposals in this field do not go far enough.

“Given the multitude of risks associated with online targeted advertising, the EDPS urges the co-legislators to consider additional rules going beyond transparency,” the body’s recommendation on the Digital Services Act states.

“Such measures should include a phase-out leading to a prohibition of targeted advertising on the basis of pervasive tracking, as well as restrictions in relation to the categories of data that can be processed for targeting purposes and the categories of data that may be disclosed to advertisers or third parties to enable or facilitate targeted advertising.”

Moreover, the EDPS wants further clarifications to the text to ensure that moderation activities conducted by platforms in their efforts to remove illegal content and identity harmful content would not involve, “insofar as is possible”, the processing of any personal data.

In addition, the data watchdog also stated that “profiling for purposes of content moderation should be prohibited unless the provider can demonstrate that such measures are strictly necessary.”

More broadly, as part of the DSA recommendations, the EDPS wants to see greater collaboration between the so-called ‘Digital Services Coordinators,’ and other relevant authorities.

The Commission’s proposal asked EU nations to appoint a ‘Digital Services Coordinator’ to oversee enforcement of the regulation. The coordinator will monitor the number of users of a platform “every six months” to see whether an online service would fall within the 45 million-user scope.

Under the plans, such coordinators have been given the right to force platforms to supply access to data to researchers, “necessary to monitor and assess” compliance with the rules.

The EDPS says that EU national data protection authorities should also be given access to any relevant data if they feel it necessary to assess compliance with the rules.

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Bolster interoperability obligations in Digital Markets Act

In terms of its recommendations for the Digital Markets Act, the EDPS says co-legislators should introduce ‘explicit obligations’ on minimum interoperability requirements for Big Tech platforms.

“The EDPS considers that issues of lack of contestability and possibilities of market entry that the proposal seeks to address are exacerbated by the closed nature of gatekeepers,” the opinion on the DMA states.

The Commission’s proposal for the DMA does in fact include an interoperability obligation but decided on imposing such a requirement only for ‘ancillary services,’ rather than core services.

The EDPS recommendation wants to see more effort invested in a broader obligation here.

“Increased interoperability has the potential to facilitate the development of a more open, pluralistic digital environment, as well as to create new opportunities for the development of innovative digital services,” it adds, calling for co-legislators to introduce “minimum interoperability requirements for gatekeepers and to promote the development of technical standards at the European level.”

After both proposals landed in mid-December, the files now make their way through the EU interinstitutional process, with the Internal Market Committee, under S&D Danish rapporteur Christel Schaldemose, leading Parliament’s response to the plans.

For the Digital Markets Act,  German EPP MEP Andreas Schwab will lead the Internal Market committee’s text, but there is likely to be at least one challenge from another committee to decide who leads the DMA in Parliament.

In the Council, representing the EU27, the Internal Market working party started talks on the DSA in January, as did the Competition Working Party for the DMA. Both files fall under the purview of the Competition Council.

For their part, the Commission is hopeful that relatively swift progress will be made as part of the interinstitutional procedure, with Commission Vice-President for Digital, Margrethe Vestager, saying recently that she hopes both files will be adopted in 2022.

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[Edited by Zoran Radosavljevic]

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