As part of the draft Online Safety Bill, the government has announced that it will be adding a duty on the largest and most popular social media platforms and search engines to prevent paid-for fraudulent adverts appearing on their services. This aims 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 unsuitable financial investments or hack into bank accounts. It includes ‘boosted’ social media posts by users which they pay to have promoted more widely.
These platforms and search engines will be required 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.
The regulator Ofcom will set out further details on what platforms will need to do to fulfil their new duty in codes of practice. This could include making firms scan for scam adverts before they are uploaded to their systems, measures such as checking the identity of those who wish to publish advertisements, and ensuring financial promotions are only made by firms authorised by the Financial Conduct Authority.
Ofcom will oversee whether companies have adequate measures in place to fulfil the duty, but will not assess individual pieces of content, in keeping with the approach taken in the rest of the bill. Its enforcement powers will include being able to blocking services in the UK or issuing fines of up to £18 million or 10% of annual turnover.
Online advertising consultation
Separately, the government is launching a consultation on proposals to review the regulation of online paid-for advertising.
The content and placement of online advertisements is currently overseen by the Advertising Standards Authority (ASA) under a system of self-regulation. However, the government says that rapid technological developments have transformed the scale and complexity of online advertising leading to an increase in consumer harm.
Adverts seeking to defraud such as investment scams and promotions for fraudulent products and services including fake ticketing, which in many cases involves fake celebrity endorsement, have proliferated online.
People are also being targeted through legitimate-looking adverts that contain hidden malware. When clicked on they allow hackers to commit malicious cyber security attacks such as ‘cryptojacking’ – the unauthorised use of people’s devices to mine for cryptocurrency.
Elsewhere there is evidence of online adverts selling items prohibited by UK laws, such as prescription medicines and counterfeit fashion, misleading adverts misrepresenting the product or service they offer, and influencers failing to reveal sponsorship arrangements with companies in their posts.
The programme will look at the current regulations and regulators including whether they are properly empowered and funded. It will consider the whole supply chain and whether those within it should do more to combat harmful advertising, including ad-funded platforms such as Meta, Snap, Twitter and TikTok and intermediaries such as Google, TheTradeDesk and AppNexus.
Options include strengthening the current self-regulation approach or creating a new statutory regulator with tough enforcement powers including:
- 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 consultation ends on 1 June 2022. The government intends to respond to the consultation and outline proposals to reform online advertising later this year.
