Online Advertising Reforms

The government has launched a public consultation on its proposals to review and reform the regulatory landscape for online advertising via its Online Advertising Programme (OAP). Online advertising has experienced exponential growth in recent years, and the government is eager to ensure that regulators have the right powers and tools at their disposal to mitigate consumer harm.

What reforms are on the horizon?

Possible options being considered for reforming online advertising regulations include:

1. extending the ASA’s remit so that it regulates platforms, intermediaries and publishers’ compliance with a new regulatory code known as the Online Platforms and Networks Standards (OPNS);
2. appointing a new statutory regulator to backstop the ASA for certain consumer harms and provide stronger powers of enforcement where needed; and
3. abandoning the self-regulatory system altogether (and potentially the ASA too) and moving to a full statutory system of online advertising regulation.

It’s clear from the OAP consultation that change is coming, and it is now a question of the extent of change needed to fulfil the government’s outspoken commitment to make the UK ‘the safest place in the world to be online’.

Online safety

On the same day that the OAP consultation was announced, the government also formally presented the Online Safety Bill (OSB) to Parliament, following a period of pre-legislative scrutiny. The government views these two programmes as complementary, and acknowledges the significant interactions between them. While the focus of the OSB is largely the harm created by user generated content, the OAP will examine and seek to address the harm created by online advertising, specifically the harmful content of adverts and the harmful placement or targeting of adverts. The OAP’s remit is much broader than the OSB as it covers the whole ecosystem for online advertising and considers whether every player in the supply chain should be doing more to increase transparency and accountability in the market.

Enforcement powers

The weakness of the current self-regulatory regime for online advertising can be seen in the ongoing battle between the ASA and online influencers who repeatedly fail to disclose social media posts as adverts. While the ASA is trialling novel methods to encourage compliance with the CAP Code, it’s clear that the current system is not sufficient to deal with this issue and a strengthened range of sanctioning powers is required. Whether the government will go so far as to appoint a new statutory body with powers to issue GDPR style fines is yet to be seen. What we do know is that under the OSB, Ofcom will have the power to issue fines of up to £18 million or 10 per cent of qualifying worldwide revenue (whichever is higher) for non-compliance, marking a significant departure from the status quo. This approach mirrors the BEIS’ proposed reforms of consumer law which may empower the CMA to fine businesses up to 10% of global turnover for consumer law infringements.

Any advertiser, platform, intermediary or publisher is advised to have their say in the future of digital regulation by responding to the government’s consultation by 1 June 2022. Details of how to respond are set out in the consultation document available here. We will be providing further commentary in due course, however, please do get in touch with us if you would like further information or discuss how we may be able to assist in preparing a response to the consultation.