Press play to listen to this article
Europe’s coming after online ads — and Big Tech knows it.
The world’s biggest tech companies are already trying to preempt Europe’s crackdown on online tracking by announcing a slew of new policies meant to limit how, and how much, they target their users. On Tuesday, Facebook said it will remove some of its most controversial ad targeting services, like the ability to show ads to people based on indications of their religion, sexual orientation and political affiliation.
Google is set to phase out support for third-party cookies — widely used tech that tracks users‘ online activity — by 2022, while Apple already started blocking tracking tech on its browser and phones.
These moves come as there’s growing consensus among European lawmakers, regulators and activists that targeted online advertising needs to be reined in.
Just last week, the online ad lobby IAB acknowledged that it seems likely to be found guilty of violating Europe’s privacy rules for its widely-used system of obtaining consent to use data to target ads.
Some EU lawmakers want to insert an outright ban on targeted advertising in the bloc’s sprawling new content moderation rules, known as the Digital Services Act, while MEPs working on a draft digital competition rulebook are mulling penalties that restrict companies‘ ability to pummel users with internet ads if they violate the new rulebook.
The backlash against online ads is a sign that Europe’s decision-makers don’t think companies like Facebook and Google have done enough to limit a practice that many web users see as creepy.
“Facebook is feeling the heat but their new changes are definitely not enough,” said German Green lawmaker Alexandra Geese, who works on Europe’s draft content rulebook. “It’s a good sign that they’re feeling that regulation on targeted ads is coming and we will keep up the pressure asking for a ban.”
Others are skeptical too. Facebook whistleblower Frances Haugen recently said several parts of Facebook’s ads system such as the lack of transparency and microtargeting “really need to be regulated.”
The industry is scared.
IAB is running ads and publishing studies predicting dire consequences for small businesses and consumers if a ban on targeted advertising goes ahead. They claim that a ban would widen the gap between those who benefit from technological developments and those who don’t.
But will Europe actually follow through on its threat to ban targeted ads? Evidence suggests that might be complicated.
IAB said an expected ruling finding it guilty of privacy violations will be an easy fix, while the decision’s legal precedent will serve primarily to heap more paperwork on smaller companies, concentrating yet more power in the hands of big players like Google, according to observers.
And that proposed ban on microtargeting might fail to materialize.
No consensus yet
Key lawmakers in the European Parliament working on the proposal are nowhere near an agreement.
Geese, who leads the call for a ban, is optimistic that Parliament will follow through, especially after a majority of lawmakers supported a nonbinding call to rein in online tracking for ads a year ago. But Danish Social Democrat Christel Schaldemose, who leads the Parliament’s work on the bill, said that’s unlikely.
“I would prefer a ban, but it’s impossible based on negotiations so far, I haven’t heard of anything that gives me a belief that we can find a compromise,” she said.
Schaldemose’s proposal to require that platforms ask for users’ consent before tracking them — significantly short of a ban on targeted ads — has also failed to gather support from her conservative and liberal counterparts.
Czech liberal MEP Dita Charanzová said the EU’s content moderation rules shouldn’t undercut existing privacy laws that are better equipped to deal with targeted ads.
“It is too early to upend [the EU’s data protection rules]. It might be even seen as unhelpful for Europe to tell the world that we have the ‘gold standard’ of data protection rules, only to set totally different rules only five years later,” she said.
Top European Commission officials have also warned lawmakers against messing about with the online advertising system.
Vice President Věra Jourová warned Parliament in October that it could “destroy” the existing online advertising system if Europe goes ahead with a ban, while Executive Vice President Margrethe Vestager echoed the ads lobby, saying that a prohibition would make life difficult for small and medium-sized businesses.
Even when it comes to controversial political ads, the Commission prefers transparency measures instead of bans — though it may be handed more power to restrict or even apply temporary bans on targeted ads for companies that repeatedly flout new digital competition rules.
EU countries, which are nearing an agreement on the Digital Services Act, have so far shown little interest in the issue. Germany’s proposal for a ban on personalized ads for minors didn’t get support.
Schaldemose, the Danish MEP, said she would strive to broker a deal “to send a strong signal to the Council“ to show a united Parliament ahead of future negotiations with EU countries, but added that lawmakers shouldn’t miss a “historic chance to regulate tech giants.”
Want more analysis from POLITICO? POLITICO Pro is our premium intelligence service for professionals. From financial services to trade, technology, cybersecurity and more, Pro delivers real time intelligence, deep insight and breaking scoops you need to keep one step ahead. Email [email protected] to request a complimentary trial.