Banning Surveillance Advertising Could Reshape the Internet

A movement to ban surveillance advertising- the use of personal data to precisely target advertising to individuals- is gaining traction both in the U.S and in the European Union. A ban on surveillance advertising has the potential to redefine our digital age and fundamentally change tech business models.

Within the EU, debate on the topic has been spurred on by the proposed Digital Service Act (DSA). The DSA aims to “define the responsibilities and obligations of digital services, and online platforms in particular.” Targeted advertising is examined through the lens of transparency. The DSA requires information to be available about ads and why they are targeting a user in particular to be visible to that user. In this paradigm, users remain in a weak position, unable to act on the information provided. More transparency does not necessarily translate to users being able to act on that information, especially if there is a lack of alternative options.

In its February 2021 opinion on the DSA, the European Data Protection Supervisor (EDPS) advocated for the legislature to go beyond transparency. It called for the consideration of a phase-out leading to a prohibition of targeted advertising on the basis of pervasive tracking, effectively an overall ban on surveillance advertising. If the EDPS opinion influences the law’s evolution and it is formulated in the end with a prospective ban on targeted advertising, the DSA has the potential to create change in one of the core aspects of the tech business model.

Banning surveillance advertising is not the definitive solution to creating an internet that respects the dignity of users and advances democracy, but it is one piece of the complex puzzle.

The idea of banning surveillance advertising is also trickling down to national level. Last month, the Norwegian Consumer Council released a report which calls for a ban on surveillance advertising. The report is backed up by an open letter signed by 55 organisations worldwide also calling for a ban. This ban, the signatories maintain, would protect both individuals and societies by protecting rights and stopping the dangerous spillover effects which being individually targeted can create.

Companies have responded to criticisms of surveillance advertising mostly by focusing on transparency. One way in which this has been done is through the creation of Ad Libraries. These libraries enable searching ads which are and which have run on platforms, but do not generally contain information on how ads are targeted. Although Facebook has stated that its Ad Library is to provide tools to researchers, it has at the same time legally threatened the NYU Ad Observatory, a project aimed at independent oversight of Facebook’s targeted advertising practices. The Observatory has facilitated investigation on how and to whom companies target ads. For instance, it has been found that the oil company ExxonMobil used Facebook to target liberals and conservatives in differing ways, manipulating the target audience and appealing simultaneously to opposing viewpoints.

Although Facebook states that it requires additional disclosures on ads that contain “social issues, elections and politics” in its Ad Library, what falls within this category is up to Facebook. This raises an important question- why should we ban all targeted advertising and not only some, such as political targeting? Only banning political advertising would inevitably create a debate on what should be considered political. An overall ban would avoid the definitional issue.

Companies such as Google and Facebook have banned political advertising in certain limited instances, such as in the lead up to the U.S 2020 elections. This is an acknowledgement that targeted advertising can have real world consequences, including on democracy. In both cases, the ban was lifted after the election, though Facebook has now stated that it will provide information on targeting criteria in relation to the U.S election ads going forward.

Pushback from tech companies on the idea of banning an intrinsic aspect of their business model is inevitable. One argument which will presumably be made is that companies rely heavily on the income from surveillance advertising and without it they will not be able to provide a “free” service. This argument has been used by Facebook recently. It has asked people to keep tracking on their phones in order “to help keep Facebook free of charge.”

This rhetoric implies that there is no way for the company to be profitable without surveillance advertising. Surveillance has become the default business model in the digital age, but this does not mean that there are no alternatives. Contextual advertising, where ads are tailored to the context searched, rather than to the user, is an alternative form of digital advertising which already exists. Google uses this approach, but also connects personal data to keyword searches, to serve its advertising. The search engine DuckDuckGo uses contextual advertising alone, and is a profitable (if much smaller) company.

Studies on whether surveillance advertising produces a definitive benefit have focused on the impact of targeting for publishers. A poll conducted by Digiday, of publisher executives found that only 33% of respondents said that they believe targeting resulted in greater ad revenues, while 45% stated it did not have any notable benefit. A study on the impact of behavioural advertising on publishers has also found that cookie-targeted ads generally generate only 4% additional revenue.

Some entities have experimented in the transition to contextual based advertising. In January 2020 the Dutch public broadcaster, NPO, switched their entire advertising model to contextual advertising. After this, advertising revenue actually increased by 76% in February 2020 compared with the previous year. This result suggests an alternative advertising model that does not depend on surveillance can be profitable.

Banning surveillance advertising is not the definitive solution to creating an internet that respects the dignity of users and advances democracy, but it is one piece of the complex puzzle. A ban has the potential to create structural change in the current predominant tech business model that companies are unwilling to pursue on their own. If a strong regulatory regime banning surveillance is an outcome of the legislative process of the EU Digital Service Act, it may set the scene globally. Without such structural change backed up by the law, the dream of the internet as revolutionizing the world for the good will remain just that- a dream.