ECONOMY

Brussels eyes online ad restrictions for political parties

Good morning and welcome to today’s Europe Express, coming to you fresh on the heels of a meeting of EU foreign ministers in New York, where the fallout from the Aukus deal continues to spread. France is still making it very clear that it feels betrayed by the US, with foreign minister Jean-Yves Le Drian basically equating Joe Biden’s presidency to Donald Trump. “We thought the era of unilateralism was over,” Le Drian said in a news conference.

Thierry Breton, the EU commissioner for internal markets, told the Financial Times that Europe has “a growing feeling something is broken in our transatlantic relations.”

Breton’s comments came after France tried to push Brussels to postpone the high-level US-EU trade and technology council meeting due to take place in Pittsburgh this month in anger at the Biden administration’s handling of the submarine deal with Australia and the UK.

Our main story today looks at regulatory steps being considered by the European Commission on how to limit the use of online advertising for political parties, when it is based on user data gathered by tracking their behaviour on social media platforms — often without them realising it.

We’ll also hear from Poland, where the government has vowed to pay zero cents to the commission, after the bloc’s top court ordered Warsaw to pay €500,000 a day for failing to implement its ruling.

And with the countdown clock to Sunday’s German election ticking, our chart du jour looks at the country’s plans to return to fiscal discipline, compared with other countries.

This article is an on-site version of our Europe Express newsletter. Sign up here to get the newsletter sent straight to your inbox every weekday morning

Transparent targeting

We’ve all experienced online ads that push products, services or political campaigns based on what we search for on the internet — or even on conversations we had on chats or emails.

While some restrictions exist when it comes to online platforms and behavioural advertising, the EU is considering rules for political parties that seek to deploy this tool, writes Javier Espinoza in Brussels.

For example, if you are a nurse in Berlin, a certain political party may bombard you with ads promising to increase the pay for healthcare workers. That same party would push different messages on social media feeds depending on the person’s age, gender, ethnicity or employment status.

Called microtargeting, this online advertising practice featured prominently during the 2016 Brexit referendum and the US presidential election — notably in the Cambridge Analytica scandal — and EU regulators are worried it could lead to similar outcomes where targeted disinformation is skewing the result of votes.

The campaign of former US president Donald Trump, for instance, was found to have disproportionately targeted Black American voters to deter them from voting, with academics and rights advocates arguing that microtargeting poses a threat to democracy.

Vera Jourova, the European Commission vice-president in charge of holding tech companies to account when it comes to disinformation and election integrity, has argued that dirty tricks, including a lack of transparency relating to microtargeting, influenced the Brexit referendum result in 2016.

Brussels has a voluntary code of conduct, which all major platforms including Facebook and Google have signed up to, in which they commit to shed light on online profiling and microtargeting.

But a draft document seen by Europe Express revealed the commission is seeking to put forward proposals for hard rules for microtargeting not only when it comes to the platforms themselves but also to ad agencies and political parties.

“Common standards would be established that limit the use of certain microtargeting techniques . . . for political actors,” the paper reads.

This would apply to European parties, such as the centre-right European People’s party or the centre-left S&D, but not to national political parties like the CDU or SPD. Still, the commission says it will recommend member states adopt the same standards.

Vera Jourova blamed dirty tricks, including the lack of transparency relating to microtargeting, as influencing the Brexit referendum result © REUTERS

The new rules would also force ad publishers to flag the practice “on the face of the ad”. They would need to let users know who the agencies are that were involved in the production of the ad and in what way they used personal data. Links would be needed for independent assessments showing compliance with the rules.

EU regulators have already proposed tighter rules for microtargeting and political advertising on online platforms. This new extension of that regulatory scope, encompassing political parties, shows Brussels still has concerns stemming from the Cambridge Analytica episode.

The scandal “brought to light interference in elections exploiting online social networks to mislead citizens and manipulate the debate and voters’ choices”, the paper reads.

Even if this new regulatory effort succeeds, there is still the question of who is likely to enforce the new rules on transparency.

For now, the EU foresees member states being mainly responsible, with some oversight from the commission. The EU also wants to rely on citizens to “flag particularly problematic ads for review by the competent authority”. Regulators are also considering “dissuasive and effective sanctions” but the report falls short in outlining what these would be.

As is the case with all EU legislation, this will have to go through a multiyear process before it actually comes into force. The aim is to have solid law by the time of the next European parliament elections in 2024, said an EU.

Chart du jour: German discipline

Line chart of General government budget balance (% of GDP) showing Germany plans return to fiscal discipline

With Sunday’s general election fast approaching, economists are trying to figure out whether to expect a return to strict fiscal discipline under the next German government and what the consequences will be on the debate about resetting the EU’s fiscal rules. (Read more here)

Polish stand-off

The EU’s top court has imposed daily fines of €500,000 on Poland after it refused to obey an order to stop operations at a mine near the Czech border, writes James Shotter in Warsaw.

The ECJ initially ordered Poland to halt lignite extraction at the Turow mine in May, pending a final ruling on the future of the site which has been the subject of a protracted environmental dispute with the neighbouring Czech Republic.

However, Poland, which says the mine is crucial to its heavily coal-based energy system, refused to comply. This prompted the Czech Republic to return to the court seeking for Warsaw to be ordered to pay daily penalties of €5m to the EU budget.

The ECJ ultimately set a far lower figure, but said the fines, which will be levied each day until Warsaw complies with the ECJ’s previous order, were necessary “in order to deter [Poland] from delaying bringing its conduct into line”.

The penalties, which come as the ECJ is also set to consider a request from the commission to fine Poland for its refusal to comply with separate rulings relating to its controversial judicial overhaul, drew a furious response from politicians from the country’s conservative-nationalist ruling camp.

“This is not even blackmail, it is judicial robbery and theft in broad daylight,” Marcin Romanowski, Poland’s deputy justice minister, wrote on Twitter. “You won’t get a cent.”

Poland’s government subsequently said it would not close the mine, and that the fine imposed by the ECJ was disproportionate and unjustified.

However, the Czech foreign minister, Jakub Kulhanek, welcomed the court’s decision. “We are ready to act further, but the main goal remains — on the Czech side, access to drinking water must not be endangered,” he said.

What to watch today

  1. World leaders speak at UN general assembly

  2. EU affairs ministers are meeting in Brussels to prepare the next EU council and discuss Brexit

Notable, Quotable

  • Picking up the energy bill: Surging gas and electricity costs are forcing European governments to discuss billions of euros in aid for households and stricken suppliers, as concern mounts over a deepening winter energy crisis.

  • Last-minute grilling: Germany’s finance minister Olaf Scholz, the frontrunner to succeed Angela Merkel as chancellor, was grilled yesterday in a parliamentary committee over irregularities at the country’s anti-money laundering agency. The affair could cost him valuable support in Sunday’s election.

  • Aukus fans: The many Indo-Pacific nations that are worried about China’s increasing belligerence look to America, not France, to balance Chinese power, writes Gideon Rachman. A hardening of Britain’s previously ambivalent posture towards Beijing is also welcome in Washington and balances the damage with Paris.

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Today’s Europe Express team: [email protected], [email protected], [email protected], [email protected]. Follow us on Twitter: @javierespFT, @henryjfoy, @JamesShotter, @valentinapop.



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