??How Artificial Intelligence (AI) legal regulation is changing Digital Advertising businesses?

In the European Union (EU), analytical platforms for publishers and advertising agencies, as well as advertising agencies themselves, are regulated through a combination of data protection laws, specific advertising regulations, and broader digital governance frameworks and lately by AI EU Law.

As artificial intelligence (AI) EU Law came into force, advertising businesses will need to adjust their operations and strategies accordingly.?

I'm Oleksandra, an experienced IT/Tech Global Commercial Lawyer with over 18 years of international expertise,? and I’m sharing my legal practice knowledge and insights here.

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?? ?? Here are three recent examples where AdTech companies were penalized for different EU digital regulations abuse:

1. Meta (Facebook) – €390 Million

• Date: January 2023
• Issue: Meta’s platforms Facebook and Instagram were found in violation of using personalized ads based on user data without obtaining proper consent. Meta claimed that users had consented by agreeing to its Terms of Service, but the DPC ruled this did not meet the standard of "freely given" consent.
• Outcome: Meta was fined €390 million and required to revise its data-processing practices.
• Relevance to AdTech: This case emphasized that consent must be explicit for tracking and data processing purposes, particularly in advertising, and cannot be bundled into terms and conditions.

2. Google – €150 Million Fine

• Date: January 2022
• Issue: The French CNIL fined Google over how it handled cookie consent on its platforms, especially YouTube. The complaint centered around Google making it difficult for users to refuse tracking cookies while making it easier to accept them.
• Outcome: CNIL imposed a €150 million fine. Google also had to amend its cookie policies within three months or face additional fines.
• Relevance to AdTech: This case underscored the importance of providing equal options for users to reject or accept tracking technologies, setting a precedent for transparency and ease of user control in the AdTech industry.

3. IAB Europe (Transparency & Consent Framework) – €250,000 Fine

• Date: February 2022
• Issue: The Belgian DPA ruled that IAB Europe’s Transparency & Consent Framework (TCF), widely used by AdTech companies to collect user consent for tracking. The TCF system allowed extensive PD processing for behavioral ads without adequate user control or proper safeguards for sensitive information.
• Outcome: IAB Europe was fined €250,000.
• Relevance to AdTech: This case questions about AdTech’s reliance on tracking systems and the need for transparent user choices around personal data use.

?? How AI EU Law contributes to AdTech regulation ?

The AI Act classifies

AI systems into risk categories, including high-risk and limited-risk AI systems. Some AdTech applications, especially those involving targeted advertising algorithms or predictive analytics for consumer behavior, could be subject to specific requirements if classified as high-risk.

Transparency requirements

are emphasized in the Act, mandating that users must be informed when interacting with AI-driven systems, especially relevant for AdTech algorithms in personalized advertising.

Bias Mitigation and Monitoring

The Act would require continuous monitoring of AI systems to prevent biases, particularly where algorithms make automated decisions on user profiling based on behavioral data, which could unfairly impact user experience or violate anti-discrimination laws.

?? If you use AI systems for Your Ad Tech Solutions:

?? Technology and Infrastructure Updates is needed:

?? ? AI System Audits: Regularly audit AI systems to ensure compliance with regulations and assess their impact on consumers. This may involve third-party evaluations to enhance objectivity.

?? ? Invest in Compliance Technology: Utilize technology solutions that facilitate compliance with AI regulations, such as tools for managing data consent, tracking data usage, and ensuring transparency.

?? Compliance with Regulatory Standards should follow:

? Advertising businesses must familiarize themselves with the specific provisions of the new AI regulations. This includes understanding what constitutes high-risk AI systems and the requirements for compliance.

? Establish processes for documenting AI systems used in advertising and ensuring they meet the necessary compliance standards. This may include maintaining records of data sources, algorithms used, and intended purposes.Nowadays Transparency and Disclosure for Digital Advertising Businesses:

? Ensure that advertising practices involving AI are transparent. This includes informing consumers when AI is being used to personalize ads or make decisions about them.

? Develop clear communication strategies to explain how AI is used in advertising and what data is collected, ensuring that consumers understand their rights and how their data will be used.

? Create ethical guidelines for AI use in advertising that prioritize consumer trust and societal well-being. This can enhance brand reputation and consumer loyalty.

The introduction of new AI regulations in Europe presents both challenges and opportunities for the advertising business.

By proactively adjusting practices to meet compliance requirements, ensuring transparency, and focusing on ethical considerations, advertising businesses can not only mitigate risks but also enhance their reputation and strengthen consumer trust in an increasingly AI-driven marketplace.

Let’s discuss how we can create a balanced framework that respects both human authors and AI contributions!

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?? If you’re interested to know more, don’t hesitate to get in touch!

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