Online behavioural advertising, consumer empowerment and fair competition: Are the DSA transparency obligations the right answer?

Abstract

This paper explores the legal implications of one of the most prevalent forms of modern advertising practices: online behavioural advertising (OBA). It specifically focuses on the normative implications and potential risks associated with OBA-induced ‘information bubbles’: OBA leading to a situation where consumers are primarily exposed to products and services aligned with their past preferences, potentially limiting their choices and autonomy, and also harming market competition more generally, by limiting the spectrum of information on offers available in the marketplace, thus impacting the regulation of supply and demand that is essential to a well-functioning market economy. To address these challenges posed by OBA, enhanced transparency has been proposed as a means to empower consumers and ensure undistorted, fair competition. This approach, codified at EU level in the Digital Services Act, aims to make consumers more aware of the information bubbles they find themselves in, presumably encouraging them to actively explore alternative products on the market. Building on the findings of a collaborative study with communication science specialists, this paper investigates whether enhanced transparency can, indeed, effectively mitigate OBA-induced information bubbles. The analysis also discusses alternative solutions, such as active ‘information enrichment’ by platforms and OBA service providers, that may remedy shortcomings of the current regulatory approach relying on transparency obligations.

Keywords: Behavioural Advertising, DSA, Consumer Empowerment, Fair Competition, Transparency, Filter Bubbles, Information Enrichment