DSA: The State of Play Ahead of the EP Plenary Vote

The Digital Services Act (DSA) is poised to shape Europe’s digital future for decades to come. But as the legislation has been debated and discussed, there have been a significant number of proposals that would vastly expand its scope – and could profoundly change the way we operate online. 

With the European Parliament plenary session to be held next week in Strasbourg, IAB Europe organised a roundtable discussion, The Digital Services Act: What Can We Expect from the Plenary Session?, where we were pleased to host Slavina Ancheva, Parliamentary Assistant to MEP Eva Maydell (EPP, Bulgaria), Benedikt Blomeyer (Director EU Policy, Allied for Startups), Tim Geenen (Managing Director, LiveRamp) and Fernando Parreira (Business Director, SAPO). The discussion was moderated by MLex’s Chief Correspondent Matthew Newman and saw participants share their insights on the state of play of the DSA debate.

One of the most prominent proposals in the DSA has been to introduce a blanket ban on targeted ads. This essential – unfairly maligned – low-cost marketing tool has been transformative for businesses large and small throughout the pandemic. It has allowed SMEs to reach new audiences across Europe and convert them into paying customers. Enterprises that have embraced digital tools have fared significantly better amid the uncertainty of Covid-19 and, as Allied for Startups’ Benedikt Blomeyer highlighted last Wednesday, they are essential for startups too.

MEPs in the Internal Market and Consumer Protection (IMCO) Committee voted to avoid the blanket ban that would have had devastating consequences for consumers and businesses across Europe. This is to be welcomed but concerns remain about the scope of new measures that could make their way in during the plenary vote. Indeed, Slavina Ancheva cautioned that proposals for a ban could reappear during the plenary session, though she does not believe such a proposal would garner enough support to pass.

There are also open questions around practical implications of a ban on targeting minors, with an underlying concern about whether age verification of users’ will be allowed under the new rules. If a robust, reliable and affordable method of age verification cannot be used, these measures could potentially amount to a full ban on targeted advertising.

There has also been talk by some MEPs of using a wide-ranging ban on so-called ‘dark patterns’ as a way of banning targeted advertising by the back door. Sweeping language in the proposed Article 13a (1)(b) and (e) would take away the right of publishers to independently hold a dialogue with their users on consent for advertising purposes and heavily interfere with existing provisions in the EU’s consumer law and data protection framework, which are already being interpreted and applied by Data Protection Authorities (DPAs). Similarly, proposals relating to ‘consent’ around the use of personal data in targeting risk duplicating and undermining existing legislation.

Overlapping and sometimes conflictual rules would represent a significant regulatory burden for thousands of small businesses across Europe and could undermine the broader digital advertising ecosystem. 

What is needed is proper enforcement of the EU’s world-leading General Data Protection Regulation (GDPR), not new measures – a point agreed with by Fernando Parreira and Tim Geenen, who said the way to go for any new legislative instrument should be to empower users in line with the GDPR requirements.

There remains a wide divergence in the views of policymakers and the final outcome remains unclear. This was illustrated during a Targeting Startups event which saw MEP Henna Virkkunen (EPP, Finland) state that targeted ads are vital to SMEs. On the other hand, MEP Patrick Breyer (Greens/EFA, Germany) claimed that contextual advertising is an adequate replacement for the existing business model. Above all this, the lead rapporteur Christel Schaldemose (S&D, Denmark) spoke of her aim of “reinforcing the intention of the GDPR” by making it easier “to refuse digital ads than accepting ads”.

Such a discrepancy of views will need to be reconciled ahead of the vote, a task that will not be easy. MEPs must remain alive to the risks of a ban or heavy restrictions on targeted advertising. Otherwise, businesses and consumers could be facing far-reaching, irreversible unintended consequences that will impact the very fabric of our free and open internet.

 

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