Govt plans new laws to stamp out harmful online ads

The Government has finally revealed plans for a major crackdown on paid-for online ads in an effort to combat the lack of transparency and accountability in the supply chain and tackle online harms.

While the initiative is only in its early stages, with question marks over who will police the new legislation as well as the potential sanctions for breaching the law, ministers insist the move will put the onus on ad display networks, social media platforms and other online services and force them to act.

As well as bringing in tougher action to stop children seeing age-restricted ads for products like alcohol or gambling, the legislation will also attempt to block fake celebrity scams and pop-up malware from hackers and make advertising regulation fit for the digital age.

The plans are published today by the Government in response to its Online Advertising Programme. It reveals that while online advertising accounted for three quarters (£26.1bn) of the £34.8bn spent on ads in the UK last year, the market is still rife with murky practices.

Ministers argue that the sector’s rapid development, combined with changes in technology and complex supply chains between marketers and platforms, make it difficult to stop illegal ads appearing.

It is claimed that British consumers frequently encounter fraudulent celebrity endorsements for financial scams, legitimate-looking pop-ups containing hidden malware, and promotions for products prohibited under UK law – such as weapons, drugs, counterfeit fashion and fake ticketing. Children can also be exposed to ads for age-restricted products such as alcohol, gambling and adult-rated films and games.

Creative industries minister Sir John Whittingdale said:”Advertising is a huge industry in which Britain is a world leader. However, as online advertising has taken a steadily bigger share, the rules governing it have not kept pace and so we intend to strengthen them to ensure consumers are properly protected.

“Our plans will shut down the scammers using online adverts to con people out of their cash and will stop damaging and inappropriate products being targeted at children.

“We will make sure that our proposed regulation helps keep people safe while supporting and enhancing the legitimate advertising industry so it can maximise its innovation and potential.”

The move will not affect the remit of the self-regulatory Advertising Standards Authority; new statutory regulation will put more responsibilities on major players across the online advertising supply chain to address illegal harms. A range of targeted legislative and non-legislative measures will address the most serious risks linked to online advertising to children.

It is claimed this approach complements the Online Safety Bill, which is targeted at user generated content, and will build on measures tackling fraudulent advertising in that legislation, ministers insist.

As well as online publishers, apps and websites serving ads, adtech intermediary services which facilitate the placement and distribution of online adverts will be in scope. Promotional posts by social media influencers where they receive payment or free products will also be covered.

Social media firms, search engines and other websites will be required by law to have proportionate systems and processes to stop people being served illegal ads, and prevent under-18s seeing ads for products and services illegal to be sold to them. The Government maintains this will improve safety, transparency and consumer trust by introducing more effective action while supporting industry growth.

The Government says it will launch a further consultation on the details of potential legislation “in due course”, including its preferred choice for a regulator to oversee the new illegal paid-for advertising rules.

Ministers will this week convene a new taskforce to gather more evidence around illegal advertising and build on industry initiatives to tackle harms and increase protections for children before the legislation is introduced.

The taskforce will be chaired by Whittingdale and Mark Lund, the chair of the Advertising Standards Board of Finance and former president of McCann UK and Europe.

The group will include representatives from across the advertising industry, including the ASA, as well as tech trade bodies, consumer groups and the Government’s “anti-fraud champion”, Tory MP Anthony Browne.

Lund, at one time chief executive of the Government’s now defunct Central Office of Information, said: “UK advertising is a dynamic engine for the UK economy because it’s creative and trusted.

“I’m delighted to be helping lead the task force’s role in strengthening the industry’s response to illegal harms advertising and the protection of children online, building on the long-term success of the ASA and the self-regulation system in keeping both trust and creativity at world leading levels.”

Anthony Browne added: “We remain absolutely committed to fighting fraud and this is another example of the government delivering on a pledge from its pioneering Fraud Strategy.

“Eighty percent of fraud is cyber enabled and it often starts with fraudulent posts and adverts on social media. I am therefore pleased to see new measures being introduced to tackle these.

“The Government will continue to work with industry, and law enforcement, to prevent fraud from happening and ensure better support is given to the public.”

In response to the proposals, Advertising Association director of policy research Konrad Shek said: “We welcome the long awaited Government response to the Online Advertising Programme and are pleased it planning to take a targeted approach, focusing on illegal advertising with a particular focus on children.

“We also look forward to studying the response in more detail and to supporting the newly announced taskforce. Judgements about changing the coverage and scope of existing advertising regulations will need to be based on the best available evidence.

“The advertising industry strives to support a safe and trusted online environment, and we hope this programme will strengthen the work that industry is already undertaking to protect consumers from illegal harms advertising and to protect under 18s online. In the ASA we also have a recognised world leader in advertising self-regulation, whose role we would hope to see strengthened through this process.

“We will support the taskforce to develop targeted and effective proposals, consistent with the Government’s stated ambitions of being pro-innovation and pro-competition in digital markets, and with the policy-making framework set out in the Digital Regulation Plan. This will ensure that the UK advertising industry continues to be a leading sector within our global creative hub.”