Targeted Advertising and Consumer Protection Law in the EU

54 Pages Posted: 7 Jul 2023

See all articles by Lex Zard

Lex Zard

Center for Law and Digital Technologies (eLaw), Leiden Law School, Leiden University

Alan M. Sears

Center for Law and Digital Technologies (eLaw), Leiden Law School, Leiden University

Date Written: 2022

Abstract

Targeted advertising is the primary revenue stream for the largest online platforms that act as the internet's gatekeepers, such as Alphabet and Meta. The financial incentives drive targeted advertising towards maximizing the efficiency of algorithmically matching advertisements with consumers, which typically requires building fine-grained profiles that rely on consumers' personal data. In the European Union (EU), the protection of personal data is a fundamental right operationalized by the General Data Protection Regulation (GDPR), establishing the limits of targeted advertising to the extent that it relies on the processing of personal data. Nevertheless, as online interface design and fine-grained personalization allow platforms and other publishers new ways to influence consumers, targeted advertising is also associated with the potential for consumer manipulation.

While the consumer protection framework in the EU is the primary field that protects consumers from manipulation, it has received little attention in academia in the context of targeted advertising when compared with the GDPR. In 2022, the EU adopted proposals for the Digital Services Act (DSA) and the Digital Markets Act (DMA), which contain consumer protection rules that directly limit targeted advertising. These developments in consumer protection law may fundamentally transform the internet, as its gatekeepers are now faced with a new legal regime that regulates their primary source of revenue. This Article provides an overview of the myriad of legislation that comprises the EU consumer protection framework-including how it intersects with the data protection framework-and analyzes how and the extent to which it coalesces to limit targeted advertising.

Keywords: targeted advertising, behavioral advertising, personalized advertising, online platforms, real-time bidding, cookies, online tracking, third-party tracking, artificial intelligence, profiling, autonomy, privacy, consumer protection law, data protection law, digital services act, digital markets act

Suggested Citation

Zardiashvili, Aleksandre and Sears, Alan M., Targeted Advertising and Consumer Protection Law in the EU ( 2022). Vanderbilt Journal of Transnational Law, Vol. 56, No. 3, 2023, Available at SSRN: https://ssrn.com/abstract=4249743

Aleksandre Zardiashvili (Contact Author)

Center for Law and Digital Technologies (eLaw), Leiden Law School, Leiden University ( email )

Steenschuur 25
Leiden, South Holland 2311 ES
Netherlands

Alan M. Sears

Center for Law and Digital Technologies (eLaw), Leiden Law School, Leiden University ( email )

P.O. Box 9520
2300 RA Leiden, NL-2300RA
Netherlands

HOME PAGE: http://https://www.universiteitleiden.nl/en/staffmembers/alan-m.-sears

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