The UK Government has today announced that their controversial new Online Safety Bill (OSB) will be extended to add a new duty, which aims to bring fraudulent paid-for adverts on social media and internet search engines into scope, whether they are controlled by the platform itself or an advertising intermediary.
At present the existing OSB draft already requires search engines and platforms which host user-generated content, video-sharing or live streaming, to protect users of their services from fraud committed by other users (e.g. ‘catfishing‘ romance scams and fake stock market tips etc.).
NOTE: The total industry turnover of the UK advertising industry in 2019 was £40bn; it generated £17 billion in GVA and exported £4 billion in services.
However, the Government has frequently been criticised for failing to include measures that would tackle harmful advertising, such as scam adverts. But under the new approach, announced today, the OSB will be updated to add a new legal duty. The duty will require the “largest and most popular social media platforms and search engines” to prevent paid-for fraudulent adverts appearing on their services.
The change seeks to improve protections for internet users from the potentially devastating impact of fake ads, including where criminals impersonate celebrities or companies to steal people’s personal data, peddle dodgy financial investments or break into bank accounts.
Under the changes, harmful or misleading adverts (e.g. those promoting negative body images and adverts for illegal activities, such as weapons sales) could be subject to tougher rules and sanctions. Influencers failing to declare they are being paid to promote products on social media could also be subject to stronger penalties.
Nadine Dorries MP, UK Culture Secretary, said:
“We want to protect people from online scams and have heard the calls to strengthen our new internet safety laws. These changes to the upcoming Online Safety bill will help stop fraudsters conning people out of their hard-earned cash using fake online adverts.
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.”
Internet search engines and content providers will be expected to put in place “proportionate systems and processes” to prevent (or minimise in the case of search engines) the publication and/or hosting of fraudulent advertising on their service, and remove it when they are made aware of it.
Ofcom will oversee whether companies have adequate measures in place to fulfil the duty, but crucially, they “will not assess individual pieces of content, in keeping with the approach taken in the rest of the bill“. The regulator will, however, have the power to hold companies to account by blocking their services in the UK (e.g. network-level blocks by broadband ISPs and mobile operators) or issuing “heavy fines” of up to £18 million (or 10% of annual turnover).
The move is to be welcomed, although it will be difficult to completely stop or pre-scan scam adverts. One of the reasons for that is because a lot of adverts have complex and dynamic code, which can be adjusted to conceal nasty elements during validation checks. Scams can also occur after the code for legitimate adverts is hacked and manipulated, which could result in legitimate advertisers and publishers being hit with unfair penalties.
On top of this, the Government has also launched a separate consultation on the Online Advertising Programme (OAP), which aims to tighten the rules for the online advertising industry. This forms part of a wider overhaul of how online advertising is regulated in the UK, including proposals to improve transparency and accountability, and to tackle harmful, fraudulent and misleading adverts.
The content and placement of online advertisements is currently overseen by the Advertising Standards Authority (ASA) under a system of self-regulation, which may either end up being strengthened or replaced by a “new statutory regulator with tough enforcement powers.”
Potential Powers of a New Statutory Regulator
➤ Rule-making powers such as setting mandatory codes of conduct and enforcing them with fines and the ability to block and ban advertisers which repeatedly break the rules.
➤ Increased scrutiny across the supply chain related to high-risk advertising such as the promotion of products related to alcohol or weight loss. Companies could be required to demonstrate they are taking care to protect users – for example avoiding targeting vulnerable groups.
➤ Increased scrutiny of advertisers which repeatedly breach codes of conduct and more checks on firms and individuals placing adverts and buying ad space. This could include requiring third-party intermediaries or platforms to make advertisers self declare an interest in placing high-risk advertising such as age restricted ads.
➤ Information gathering and investigatory powers such as the power to audit and request transparency reports from companies and request data from them.
The goal of this is to bring more of the major players involved under regulation and to create a more transparent, accountable and safer ad market. The OAP consultation will be open for 12-weeks from Wednesday 9th March 2022. The government intends to respond to the consultation and outline proposals to reform online advertising “later this year.“
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