The regulatory insider

GambleAware, UK’s leading gambling charity, called on the next government to ban betting advertising at sports events and on pre-watershed television, based on a conducted survey showing strong public support favouring stricter controls. Two thirds of people in the UK currently think there are too many betting adverts. The government published a white paper on gambling regulation last year, outlining several proposals for more stringent regulation. The charity is however calling the new government to ban all gambling marketing at sports events along with a pre-watershed ban on all broadcast gambling ads on TV, video on demand and radio. For the moment, the industry abides by a voluntary measure called ‘whistle to whistle’ ban under which they commit not to advertise during broadcast sports events. Through these calls backed with data proving the potential harm of betting advertising, and despite the former government stating that research did not establish a causal link, this issue could be re-examined under the new UK government.

The saga of Google’s Privacy Sandbox moves forward with continuing pushback across the industry regarding its cookie-replacement plan. Several AdTech companies performed thorough tests on this new tool to assess how it would affect ad prices, website page loads and publisher ad revenue. The results were however not convincing, with Index Exchange concluding that the Sandbox posed ‘major risks to publishers and the overall programmatic ecosystem’ and Criteo forecasting that should cookies be switched off now, publishers’ Chrome ad revenue would decline by about 60% on average. All in all, Google’s Privacy Sandbox is still very much lacking, as the ad-industry feedback shows, and surely the timeline will continue to change and adapt as Google still awaits for the UK CMA’s approval.

A “briefing book” on digital policy and society (a European Commission internal document often used for the handover of power to another mandate) recently leaked. It indicates that the Commission plans to operate a mid-term review of the digital rulebook (DMA, DSA, AI Act...). But most importantly, this document suggests a revision of the AVMSD in order to modernise it to the current digital era, including influencers in the EU or targeting EU users.

Amazon Ads boasted their AI capabilities at Cannes Lions, presenting their service called “Ad Relevance”, which will be used on its demand-side platform. This circles back to the cookie deprecation era, as Ad Relevance aims to help advertisers target online audiences without the need of 3rd party cookies or identifiers. Amazon Ads is therefore betting on the use of machine learning and model-based audiences, as they consider that simply replacing ad identifiers such as 3rd party cookies would not have been enough in the long run.

Google’s Privacy Sandbox and its plans to deprecate third-party cookies to replace them by new ‘privacy-friendly’ tools to still track users has been an ongoing worry in the advertising sector. However, and not long after the UK ICO raised concerns about privacy in the Privacy Sandbox, Austrian privacy NGO noyb filed a complaint to the Austrian DPA claiming that the Privacy Sandbox can still be used to track users, only that “tracking is now simply done within the browser by Google itself”. Noyb thus affirms that Google is tricking users to give their ‘consent’ (a required legal basis under the GDPR) to this new feature by inviting them to ‘Turn on an ad privacy feature’. To counter Google’s defence of championing a privacy-friendly solution, noyb argues that while Sandbox might be less invasive than third-party cookie tracking mechanisms, it does not give Google the right to violate EU data protection laws.

Despite the recent adoption of Regulation 2024/900 on the transparency and targeting of political advertising, the EU still has to fight the disinformation that Russia is (allegedly) spreading on the upcoming European election. Governments from EU Member States are accusing Russia of interfering with the aim of discrediting them and destabilising the EU. This is performed through disinformation, deepfakes, doppelganger sites, and pro-Russian influencing, with Belgium even advancing that Russian officials paid European Parliament lawmakers to promote Russian propaganda. Russia, of course, is denying all those allegations. While the latest regulation has yet to come into force and will not apply to the upcoming election, the DSA does require the swift removal of illegal content and applies to deceptive advertising and political content. Social platforms such as Meta and TikTok announced measures to counter disinformation in this context.

The EU continues to show its focus on AI regulation with the internal reorganisation of DG CNECT currently taking place to welcome the newly formed AI Office, absorbing notably DG CNECT’s A Unit. It is set to effectively take place on June 16. The AI Office is tasked with implementing the AI Act, regulating this new technology based on expected risk. The AI Office is expected to produce several codes of practice and guidelines to give life to this text. A new unit will also be formed in this new context: A.5. ‘AI for Societal Good’.

Major public broadcasting groups’ staff went on strike due to government planning to merge their services into one media giant. The strike affects notably France Télévisions and Radio France. Up to 16,000 employees could be affected but this merger, especially on the radio side. French Culture Minister defends this bill by saying it would allow the groups to “share their strengths”, with the merger concluding in 2026. While all agree that reforming public broadcasters is needed with the ever-increasing influence of internet and social media, the way forward is subject to heated debate.

With new mechanisms coming into place online, signal loss has prompted advertisers to invest in their first-party data. Adtech however “inflated” expectations about collecting first-party data, a challenging and pricey endeavour. Brands will have to find a solution by working more closely with those ‘walled gardens’, with brands proving ready to trade transparency for more performance.

Bulgaria decided to completely ban gambling advertising in all types of media, with many votes in favour. As Bulgaria was hit by a corruption scandal around gambling which ended in gambling becoming the largest source of revenue for Bulgarian media, the country decided to take action. However, as many national TV stations and news websites are dependant on gambling advertising, they warned that this new law could actually work against the independence of the media.

The EU recently manifested its worry about Meta’s social platforms breaking rules relating to election integrity. Among the elements investigated are the moderation of political ads and non-paid political content, as well as enabling outsiders to monitor elections, particularly crucial considering the upcoming European elections. Concerns have been raised about Meta’s decision to shutter access to CrowdTangle, with the EC sending an urgent formal request for information to the company. Other DSA investigations could follow for Meta.

Another blow to Meta’s tracking practices came from Advocate General Athanasios Rantos’ Opinion in the case C-446/21 (Preliminary ruling lodged by Oberster Gerichtshof (Austria) in Maximilian Schrems v Facebook Ireland Ltd), stating that the license to use of personal data for targeted advertising must be limited. Such limits could substantially affect Meta’s current tracking practices. While a final ruling from the CJEU remains pending in this case, it can be suggested that this opinion could be followed by the Court, putting forward that proportionality in data retention for ads should be strictly observed, notably through time restriction for data retention. EU lawmakers and regulators are demonstrating their will to tackle surveillance advertising, mentioning solutions such as contextual advertising.

On Wednesday 3rd July 2024, the European Commission published a call for tenders for a study , entitled "Online advertising at the crossroads of different regulatory frameworks", which will be focusing on technological and market developments in the online advertising sector. Its purpose, as stated in the call, is to "map the main issues, and identify possible regulatory gaps". The Commission also seeks to evaluate the impact of the relevant provisions of the DMA and the DSA in this specific sector. DG CNECT had already mentioned the subject of coherence of the legislative framework on online advertising as one of the points of attention for the next mandate in its briefing book.

Facing ‘pushback’ from European regulators, Meta announced that it will not release its AI features in the EU, stating that the privacy regulations and concerns about generative AI tools would make their technology a ‘second-rate experience’. Meta manifested its disappointment with the Irish DPC who requested to ‘delay training our large language models (LLMs) using public content shared by adults on Facebook and Instagram’. EU regulators, on the other hand, welcomed Meta’s announcement.

Amazon was fined 122 million dollars by a Texas federal jury for violating another company’s rights, AlmondNet Inc (owner of the two patents in question), regarding targeted internet advertising technology. The patents concerned ‘privacy-friendly’ personalized ad targeting. AlmondNet sued Amazon back in 2021 for infringing on their patents, with Amazon technology featuring their ad exchange and targeting services. AlmondNet also introduced complaints against other big tech companies such as Meta, Samsung and Oracle.

In addition to its classic subscription business model, Netflix launched ads at the end of 2022. Continuing to move in this direction, Netflix just doubled down on advertising, in order to prove that it does indeed offer performing and competitive ad buying and measurement options. Netflix thus presented plans to launch its own in-house ad tech platform by next year. The first tests of this new platform will be carried out in Canada this year and in the US by Q2 2025, to reach a global availability by the end of next year. Netflix explained this move by notably putting forward its will to give agencies more control and transparency into what they are buying.

A group composed of French trade associations (representing around 800 advertisers, publishers, agency and AdTech companies) signed a letter addressed to Tim Cook, CEO of Apple, asking for the company not to roll out its “web eraser” feature. They argue that this could prove catastrophic for online-advertising as this new feature allows Safari (Apple’s browser) users to remove unwanted content. This notably includes ads, and the browser would remember such choices for subsequent visits. This new tool would come into play in a period where media and advertising company are already suffering from unilateral and disruptive changes introduced by tech giants and on which they have no control. This group is calling for an assessment and aims to raise awareness on central issues this web-eraser tool brings when it comes to legal and editorial concerns, along with restrictions for citizens to access diverse and pluralistic content and potential job losses. The group also contacted Thierry Breton and the Head of the French Competition Authority while reminding Apple’s obligations under the DMA.

With all the changes that Google has been introducing to its search engine lately, many publishers are struggling to follow the pace and adapt, calling for government intervention in the US. The latest source of worry concerns the ‘AI Overviews’ feature, consisting in AI-generated summaries compiling content from news sites by topics searched. This would cause a sharp decrease in traffic on their own sites, and steal away the content from the creators, causing financial but also consumer and copyright related issues. While media executives want their sites to be in Google’s search results, they just as much want to avoid the AI Overviews. Yet again, the crushing dominance of Google puts those publishers in an impossible situation, where they have little room to negotiate.

The Digital Markets, Competition and Consumers (DMCC) Act just became law in the UK, bringing the UK closer to what the EU has with the DMA. It gives the CMA the ability to designate the activities of certain firms as having strategic market status (SMS), resembling the DMA’s gatekeeper/core platforms services status. It will be interesting to follow its first steps of implementation and the CMA’s SMS designation investigations, with designated SMS probably using similar arguments as they did to the Commission to defend their positions.

A major anti-trust case against Google is coming to a close in the US. The Department of Justice (DOJ) is accusing Google of being a monopoly. To qualify a firm as being a monopoly relies here mainly on market share, however the DOJ claims that Google paid other companies to make its search engine the default one. Its market power was particularly used to dominate digital advertising. This antitrust trial’s conclusion will be particularly interesting to observe, as it adds to the legal actions against the monopolistic power of Google on both sides of the pond.

As Airlines are using advertising to promote ‘guilt-free’ low-carbon flights, the European Commission has stepped in and given 20 airlines an ultimatum to correct those greenwashing claims. The EC intervened after a warning from BEUC, to enforce the EU climate policy on the aviation sector. Airlines should not promote sustainable aviation fuels (SAFs) as they are not market-ready yet, and should avoid playing around what is a fine line that amounts to greenwashing.

With CMOs facing downturns in sales, they are turning away from Google to embrace Meta instead, the latter offering better working targeting tools. But another reason behind this behaviour is the timing when it comes to the US Google Search antitrust trial, whose ruling could affect the market.

The UK Competition and Markets Authority (CMA), who monitors the roll-out of the Google Privacy Sandbox, raised in its last quarterly report, to which the Information Commissioners Office (ICO) also contributed, not only usual anti-competitive concerns but also new consumer privacy concerns. This constitutes another setback for Google who will have to prove its readiness to adapt its new tools to address those concerns, notably on transparency and first-party data when it comes to ad spend.