UK launches consultation on online advertising regulation

The government said it could introduce tougher penalties for influencers who fail to declare payments for promoting products and will seek to improve transparency and accountability in the online advertising system.

A new legal duty will be added to the Online Safety Bill requiring social media platforms and search engines to prevent paid-for fraudulent adverts appearing on their services.

Under the current draft of the Online Safety Bill, search engines and platforms which host user-generated content, video-sharing or live streaming will have a duty of care to protect users of their services from fraud committed by other users.

The new duty added to the bill will bring fraudulent paid-for adverts on social media and search engines into scope, whether they are controlled by the platform itself or an advertising intermediary.

Ofcom will oversee whether companies have adequate measures in place and will set out further details on what changes companies need to complete to fulfil the new duty.

A consultation has also been launched on the Online Advertising Programme to attempt to create a more transparent and proposals put forward by the government include tougher rules and sanctions on harmful or misleading adverts, such as those promoting negative body images or illegal activities.

The content and placement of online advertisements is currently overseen by the Advertising Standards Authority (ASA) under a system of self-regulation.

Options in the consultation include strengthening the current self-regulation approach or creating a new statutory regulator with tough enforcement powers.

New powers could improve mandatory codes of conduct, increased scrutiny across the supply chain for ‘high-risk’ advertising, increased scrutiny for advertisers that repeatedly break rules and powers to audit and request transparency reports and data from firms.

The consultation will run for 12 weeks from Wednesday 9^th March 2022 and can be accessed here. 

Nadine Dorries, culture secretary, said: “We want to protect people from online scams and have heard the calls to strengthen our new internet safety laws.

“As technology revolutionises more and more of our lives the law must keep up. Today we are also announcing a review of the wider rules around online advertising to make sure industry practices are accountable, transparent and ethical – so people can trust what they see advertised and know fact from fiction.”

Stephen Woodford, chief executive at the Advertising Association, said: “We welcome the publication today of the Online Advertising Programme and look forward to engaging in the comprehensive review the government is undertaking of the regulatory and self-regulatory framework for online advertising.   

“We fully support the Government’s aim of making the UK the safest place to go online while ensuring it is the best place in the world to do business online too. It is important to recognise the UK has the world’s most advanced digital advertising marketplace and a healthy advertising eco-system is integral to funding a free and open internet.”

Woodford added: “It is vital any future regulation considered during this consultation is proportionate and complements the existing framework.

“Any additional regulation should seek to protect consumers and prosecute bad actors, while enabling the UK to remain at the forefront of the digital economy.”