COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT REPORT Accompanying the document Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the transparency and targeting of political advertising
Date: 2021-11-25
Institutions: Directorate-General for Justice and Consumers, European Commission
Subjects: advertising, data protection, election, natural person, personal data, political parties, political propaganda, provision of services, referendum, single market

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  EN 

   EUROPEAN COMMISSION  Brussels, 25.11.2021  SWD(2021) 356 final  COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT REPORT  Accompanying the document Proposal for a   REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the transparency and targeting of political advertising {COM(2021) 731 final} - {SEC(2021) 575 final} - {SWD(2021) 355 final}  
 
 
Executive Summary Sheet 

Impact assessment on the initiative on the transparency of political advertising 

A. Need for action 

What is the problem and why is it a problem at EU level?  

Political  advertising  conveys  political  messages  to  voters  through  a  variety  of  media,  from  print  to 
television to social media. It is used in political campaigns and more generally to shape public opinion and 
to contribute to debates on topics of societal importance. It is specifically regulated to ensure free and fair 
elections. An important  element of existing rules is that they seek to ensure political advertising is used 
transparently,  so  that  citizens  can  recognise  advertisements  and  those  who  place  them  can  be  held  to 
account. There is  a legitimate public interest in protecting  this, such as fairness, equal opportunities and 
transparency in the electoral process and the fundamental right to be informed in an objective, transparent 
and  pluralistic  way.  National  rules  thus  place  obligations  on  political  actors  and  on  the  companies 
providing political advertising services. These rules traditionally focused on ‘offline’ media (newspapers, 
broadcasters, etc.), but online advertising has become increasingly common as it can be disseminated with 
more flexibility and be targeted to very specific audiences. Online advertising has brought new challenges, 
in particular related to issues of transparency, accountability and manipulative targeting.  

All Member States have legislation relevant to political advertising, resulting in a fragmented patchwork 
of national rules in terms of substance, scope, implementation and enforcement, which create obligations 
for service providers, and which apply differently between Member States and depending on the medium 
through  which  the  advertising  is  disseminated.  This  particularly  concerns  relevant  definitions  and 
transparency requirements, which affect the content of advertisements. As some Member States intend to 
introduce new legislation to cover the new online media, this fragmentation is expected to increase. This 
complex legal context generates costs and challenges, which also create barriers to political advertising as 
a cross-border service in the internal market, with a direct impact on the functioning of the internal market.  

Personal  data  is  used  to  target  political  messages  to  citizens  by  directing  advertisements  to  groups  and 
tailoring  the  content.  The  processing  of  personal  data  for  such  purposes,  particularly  data  considered 
sensitive under the GDPR, and targeting to groups small enough to enable the non-transparent provision of 
tailored  political  messages,  have  specific  and  pronounced  negative  effects  on  citizens’  protected  rights. 
Some  Member  States  have  also  attempted  or  are  considering  intervention  with  respect  to  targeting,  but 
such measures have proved problematic.  

These  issues  also  affect  democratic  processes  and  campaigning  at  EU  level,  including  by  European 
political  parties  (EUPPs).  The  EU  legal  framework  for  EUPPs  does  not  regulate  the  use  of  political 
advertising, and fragmentation and uncertainty can hinder EUPPs’ ability to conduct EU-wide campaigns. 

This impact assessment analyses core problems with political ads and their causes, from 3 perspectives: 

1. Economic actors who wish to run multi-medium and/or multi-Member State campaigns face significant 
obstacles and additional costs, due to the differences in transparency regulation between Member States 
and  between  online  and  offline  contexts.  Some  political  and  economic  actors  exploit  this  situation  to 
circumvent rules. This situation also drives a large share of political ads online. 

2. This  situation  erodes  the  ability  of  national  rules  on  political  ads  to  protect  democratic  processes  and 
fundamental  rights.  The  targeting  of  online  political  ads,  and  other  manipulative  techniques,  creates 
additional problems. 

3. There  is  insufficient  transparency  around  political  ads  sponsored  by  EUPPs  which  are  campaigning 

across the EU on EU issues. 

What should be achieved? 

 
 
The general objectives are to: (1) facilitate the provision of political advertising and related services in the 
internal  market  while  supporting  fair  democratic  processes  based  on  high  and  harmonised  transparency 
standards and lawful use of targeting techniques; (2) provide for high transparency standards for political 
parties in the EU supporting free and fair elections. 
Specific  objectives  are  to:  (a)  reduce  legal  fragmentation,  remove  obstacles  and  reduce  costs  for  cross-
border  services,  (b)  define  high  transparency  requirements  for  political  ads  (including  issues  ads),  (c) 
address  specific  data  protection  risks  emerging  from  the  use  of  some  targeting  and  amplification 
techniques,  (d)  ensure  effective  oversight  of  the  envisaged  obligations  and  strengthen  regulatory 
outcomes, (e) promote stronger transparency and free and fair elections through compliance with rules by 
political  parties  in  the  EU.  Reaching  these  objectives  will  also  increase  resilience  against  foreign 
information manipulation and interference. 

What is the value added of action at the EU level (subsidiarity)?  

This  issue  is  best  addressed  at  EU  level  as  individual  Member  States  can  neither  tackle  the  market 
fragmentation  nor  address  the  cross-border  nature  of  the  issues  identified.  Several  Member  States  have 
passed  or  are  considering  legislation  on  the  transparency  and  targeting  of  political  advertising. 
Fragmentation will thus increase, which jeopardises the right to freedom of establishment and to provide 
services  across  the  EU,  while  also  not  achieving  the  regulations’  intended  aims.  EU-wide  standards  for 
political  ads  and  related  services  would  bring  legal  certainty,  remove  compliance  costs  of  delivering 
services  cross-border  and  reduce  non-compliance  risks.  This  would  mitigate  incentives  for  economic 
actors to partition the internal market and incentivise them to provide compliant cross-border political ads 
services,  and to  develop new ones.  In contrast,  the effects  of  purely  national  legislation  are limited to  a 
single  Member  State.  They  risk  being  circumvented  or  not  being  understood  by  service  providers  from 
other  Member  States.  They  would  not  address  the  EU-wide  problems  identified  above  and  could  even 
increase them. Furthermore, the cross-border nature of activities, in particular in the online environment, 
creates  significant  challenges  regarding  transparency  and  regarding  targeting,  which  purely  national 
regulation  in  this  domain  would  not  be  able  to  address.  Data  protection  is  harmonised  at  EU  level  and 
additional measures should be provided at EU level. Also, only the EU could provide EU-wide measures 
for EUPP political advertising: this would ensure national legislation does not impede their EU campaigns. 

B. Solutions 

What are the various options to achieve the objectives? Is there a preferred option or not? If not, 
why? 

Options related to economic actors in the internal market include: 
1.1 Limited binding measures to align certain definitions and provide for information retention, and soft 
measures and standards to promote transparency in the use of political ads online and offline and support 
further interventions, including self-regulation. Soft measures also cover the use of targeting techniques. 
1.2.  Binding  measures  to  harmonise  transparency  requirements  for  political  ads  accompanied  by  soft 
measures and standards. The binding measures also address the use of targeting techniques in political ads. 
Options addressed to political parties include: 
2.1. Limited binding measures to adapt the existing framework on EUPPs to introduce an obligation for 
parties to support transparent use of political ads; and 
2.2  Extending  the  existing  framework  to  introduce  complementary  obligations  on  EUPPs  to  provide 
meaningful transparency for the use of political ads. Appropriately empowering the Authority for EUPPs 
to report on compliance. 
For both 2.1 and 2.2, soft measures would apply to national political parties, with recommendations to be 
addressed to Member States to introduce equivalent standards for all political actors. 
What are different stakeholders' views? Who supports which option?  

  There is a general demand for a uniform definition of what constitutes political advertising. 

 
 
  Broad support for EU action, in particular for transparency measures to ensure (i) enough information 
about political ads is provided – to allow campaigns to be followed across platforms and media – and 
(ii) information is retained and made accessible to the public. 

  Support for either a ban on targeted political ads, or allowing them only after explicit opt-in by users. 
  Regulation offline (extensively regulated) and online ads (limited or no regulation) needs rebalancing. 
  Member States also broadly support more effective oversight possibilities (off- and on-line) to address 

opaque political ads practices. 

C. Impacts of the preferred option 

What are the benefits of the preferred option (if any, otherwise of main ones)?  

The preferred option is expected to have an positive effect over the baseline by: 
 
increasing legal certainty and removing costs associated with regulatory fragmentation. 
  bringing added transparency to targeting, with positive impacts on fundamental rights. 
  providing a clear basis for oversight, and thus enabling national authorities to request the information 

 

needed to oversee political ads, and to cooperate in investigation and enforcement. 
increasing  transparency  in  the  democratic  processes,  as  well  as  protection  against  manipulation 
through targeting techniques. 

  active supervision of political campaigning around EU elections would also require active and timely 

disclosures by EUPPs and reinforce the role and resources of the Authority to ensure oversight. 

What are the costs of the preferred option (if any, otherwise of main ones)?                                    

Economic actors – compliance costs to implement obligations on transparency and oversight (both one-
off adaptation costs and ongoing compliance costs). But overall costs should service providers should be 
lower than in the baseline, as reduced fragmentation yields efficiency gains. 
National authorities and the Authority for EUPPs – one-off costs for training and capacity to adapt and 
make  best  use  of  the  new  opportunities  for  more  effective  regulation.  Cost  for  procurement  of  EUPP 
repository. Offset by efficiency gains, better information access and better coordination at EU level. 
EUPPs  –  certain  costs  for  disclosures  on  common  ad  repository  platform  offset  against  increased  legal 
certainty and lower pan-EU campaigns costs.  
What are the impacts on SMEs and competitiveness?  

The  new  requirements  will  help  SMEs  scale  up  their  political  advertising  services  across  borders  in  the 
internal  market.  Adapting  their  information  systems  to  comply  with  the  passive  obligation  to  retain 
information on political ads would entail minor one-off costs. These costs would be offset by savings from 
more consistent rules across the EU. 

Will there be significant impacts on national budgets and administrations?  

One-off  costs  for  training  administrative  staff  and  recurrent  costs  for  monitoring  compliance  with 
transparency  and  targeting  obligations.  Should  be  offset  by  efficiency  savings  from  harmonised 
obligations and the streamlined and strengthened oversight process. Current enforcement is low, however. 

Will there be other significant impacts?  

The increased accountability of political actors would encourage a culture of open and honest 
campaigning and should help rebuild public trust in the use of political advertising, and more generally in 
the public political debate and the integrity of the electoral process. 

Proportionality?  

The measures proposed are proportionate to the objectives defined (see box for subsidiarity above). 

 
 
D. Follow up 

When will the policy be reviewed?  

Within 5 years of entering into force of the envisaged Regulation.