Home PublicationsCommentary The Political and Corporate Interests Behind the Push to Ban Targeted Ads

The Political and Corporate Interests Behind the Push to Ban Targeted Ads

by Daniel Castro
Lots of toy ducks

This article is part of a three-part series investigating the role of “privacy capitalism” in shaping the EU proposal to ban targeted advertising: 

A number of groups have recently come out in favor of an EU ban on targeted advertising. Those pushing for a ban are trying to pit contextual advertising (where ads are based on the content of pages) against targeted advertising (where ads are based on personal data about the user). To be clear, contextual advertising is highly effective in many cases, but it is not interchangeable with targeted advertising. For example, contextual ads work well on search engines where user intent may be clear from search terms or on specialty sites that cater to a specific demographic (such as a website for sports car enthusiasts). But they are less effective for the many ad publishers—such as apps, games, and news media—that have more diverse audiences.

Until recently, this point was not controversial because multiple studies have shown that ad effectiveness drops substantially without information about users. Advertisers are willing to pay more for targeted ads, and so ad publishers can earn more revenue to support their business. And if policymakers ban targeted advertising, that revenue—which supports the vast array of free online apps and services—will disappear.

So who is behind this effort? Let’s take a look at the key players.

One prominent player is the Greens/EFA, which commissioned a recent report calling for a ban. The Greens hired Autonomy, a self-described “independent, progressive research organisation” to produce the report. Were the Greens interested in an objective analysis? It is unlikely. Not only were they previously on the record as wanting to end targeted advertising, but the lead author they hired at Autonomy was Duncan McCann, an individual who had already authored two reports at the New Economics Foundation, including one as recently as May 2021, calling for a ban on targeted ads for children and other restrictions on data-driven advertising (in fact, one plagiarism tool found that a portion of the Greens report came nearly verbatim from the New Economics Foundation report). In other words, they knew what they were getting. And who paid for the New Economics Foundation report? The Global Action Plan, an advocacy group pushing for a “post-consumerism movement” that wants to “ban surveillance advertising to all Internet users.” The Greens report also relied heavily on private data made available by Kobler, a Norwegian company that sells contextual advertising. Indeed, some of the lines in the report come across as pure marketing for European firms, such as: “There are however some, like Kobler and Opt Out Advertising, who do offer truly privacy preserving contextual opportunities.”

Another player is the Irish Council for Civil Liberties (ICCL), which also published a report this year calling for a ban on targeted ads. The author of that report was until recently the chief policy officer for Brave, a company that sells contextual advertising, and last year spoke at an event chaired by Alexandra Geese, a prominent Greens MEP, to discuss banning targeted ads. As with the Greens report, the ICCL report also relies heavily on private data made available by Kobler. ICCL does not reveal whether it received any funding for this report, but its past disclosures have been sloppy. For example, the ICCL’s EU Transparency Register entry states that it is not a member or affiliated with any other organization. Yet ICCL’s website states “ICCL is a member of The Civil Liberties Union for Europe” and “ICCL works in partnership with INCLO [International Network of International Civil Liberties Organisations].” It also states that it has not received any EU grant funding in the Transparency Register, despite the fact that its 2020 Annual Report notes it received nearly €35,000 in funding from the European Commission.

Finally, the other major player is European Digital Rights (EDRi). EDRi has received funding this year from both DuckDuckGo, which bills itself as a privacy-conscious alternative to Google, and Kobler, a Norwegian company selling contextual ads. Corporate Europe Observatory found that EDRi was among the top 15 lobbyists in Brussels on the Digital Services Act (DSA) and Digital Markets Act (DMA). Its members are among those most actively pushing for a ban on targeted advertising. For example, Panoptykon, which has published its own report last year calling for a ban on targeted ads, is not only a member of EDRi, but notes in the EU Transparency Register that its “advocacy activities in Brussels are essentially carried out through the EDRi office” (translated from Polish).

The amount of money flowing to these organizations adds up. For example, DuckDuckGo paid $1,000,000 this year to groups like EDRi that are pushing policymakers to adopt privacy laws favorable to their business model. Our analysis finds that since 2019 DuckDuckGo has donated $250,000 to organizations that are part of the Tracking-Free Ads Coalition, a group of organizations that are lobbying for Europe to ban targeted ads. When including all organizations that DuckDuckGo funds that are members of EDRi, one of the most prominent members of the Tracking-Free Ads Coalition, that total jumps to over $700,000.

Moreover, DuckDuckGo does not appear to disclose this information publicly on the EU Transparency Register. In the Transparency Register, it states that it only spent €50,000-99,999 on covered activities over the past year, seemingly omitting all of these contributions. In contrast, most large tech firms include their contributions to outside groups in their estimate of how much they spend on work that may influence EU policy. Critics of Big Tech argue that they have on outsized influence on European policy. But their spending, on a per revenue basis, is a fraction of what DuckDuckGo has spent. For example, using its self-reported spending to the EU Transparency Register, as a share of its revenue, DuckDuckGo spends between 15 to 28 times more than Google.

Money talks. When the European Parliament held a recent hearing on targeted ads, three of the five panelists were from EDRi, ICCL, and Kobler. Kobler in particular is an interesting outlier, as it is a relatively minor player in online advertising, yet seems to keep showing up in key reports and hearings and has yet to create an entry in the EU Transparency Register.

While some of these companies have a direct financial interest in achieving certain policy outcomes, the advocacy groups also have a financial stake as well. But they pretend they do not. For example, EDRi states in its Transparency Register entry “we don't have any direct or indirect financial gain from these activities.” But when these organizations receive regular funding from companies to promote these views and fundraise from consumers about these issues as well, it is hard to take those claims of not having a financial stake seriously. Similarly, they may claim to be speaking on behalf of civil society, but the simple facts remain that they also are representing the interests of certain corporations as well.

For example, Bits of Freedom, a Dutch digital rights organization, wrote recently that Big Tech is secretly dominating tech policy discussions in Brussels. One of its policy advisors wrote, “It will help a little if there is more openness about who is talking about who, when and what.” Yet Bits of Freedom has received $50,000 in contributions from DuckDuckGo over the past two years (see table above), and it has not disclosed this information in its entry on the EU Transparency Register.

The point is not to suggest that companies should not promote their interests or that an advocacy group cannot receive funding from a for-profit entity that wants to promote its interests. My think tank receives funds from a number of organizations, including tech companies (the list of supporters is available on our website), but we also have clear rules to maintain editorial independence from our funders and debate the issues on their merits.

Unfortunately, these other organizations routinely critique those opposing their positions as nothing but shills for Big Tech and demand that the media note any financial ties, hoping to reduce the credibility of differing viewpoints, rather than engage on the substance and evidence. These are bad faith arguments and do nothing to foster effective policymaking. Moreover, if they are sincere in their vocal denouncements of “indirect tactics via non-transparent think tanks or associations…to conduct covert lobbying” then they should hold themselves to the same standards.

Next: Oops, the Groups Pushing to Ban Targeted Ads Use Targeted Ads Themselves

Image Credit: Andrew Wulfe

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