Review of the Online Advertising Programme - Which? response

Summary

Consumers can face a number of different harms when engaging with advertising and particularly online advertising. The focus of our response is particularly on fraud. Fraud is the largest category of crime affecting people in the UK. The majority of this takes place online with advertising as a key vector. Our research shows that there is widespread fraud in the Open Display Advertising market perpetrated by organised criminal groups. These scams cause large scale financial and psychological harm to consumers across the UK. 

The different voluntary initiatives undertaken by the advertising industry are wholly insufficient to protect consumers. In fact, industry groups admit that their initiatives are primarily designed to protect advertisers rather than consumers. Industry experts further concede that only 1% of the advertising supply chain is secure against fraud. 

Industry and the regulator have - to date - been too slow and reactive in their efforts to tackle fraud. For example, our research finds that fraudsters can generate almost £1m in a day while Google allows a grace period of 30 days before verifying advertisers identities. The ASA has focused on a notice and takedown approach rather than pursuing effective measures to ensure that fraudulent advertising is never published in the first place. This is both outdated and potentially counterproductive, undermining the standards set by other regulators for how platforms should respond to illegal content. 

A new statutory approach is needed that requires platforms and intermediaries to establish standards for sharing up-to-date data on scams and fraud, conduct audits of their systems to determine the prevalence of scam adverts on their services and produce transparency reports. The regulator should require platforms and intermediaries to conduct due diligence checks on all parts of the supply chain they work with to ensure that they are legitimate actors. Platforms and intermediaries should also be required to use the latest technologies to detect potential scam adverts and conduct detailed checks on adverts with concerning characteristics. 

The Government must use this opportunity to reform the regulation of platforms and intermediaries in the online advertising ecosystem to protect consumers from fraud and misleading adverts. 

Which? also wishes to highlight a number of potential areas that could be a growing source of harm to consumers going forward from the targeting of advertising in fraud and other areas. This includes price personalisation, targeting vulnerable devices for malware and the limits of removing sensitive categories from targeting services. Targeting is not currently the only or the main source of harm in the advertising ecosystem as it is not fraudsters’ primary tool. Our research suggests that scammers seek to broadly target as many victims as possible rather than relying on sophisticated targeting techniques.