Trademark Law, AI-Driven Behavioural Advertising and the Digital Services Act – Towards Source and Parameter Transparency for Consumers, Brand Owners and Competitors

In its Proposal for a Digital Services Act (“DSA”), the European Commission highlighted the need for new transparency obligations to arrive at accountable digital services, ensure a fair environment for economic operators and empower consumers. However, the proposed new rules seem to focus on transparency measures for consumers. According to the DSA Proposal, platforms, such as online marketplaces, must ensure that platform users receive information enabling them to understand when and on whose behalf an advertisement is displayed, and which parameters are used to direct advertising to them, including explanations of the logic underlying systems for targeted advertising. Statements addressing the interests of trademark owners and trademark policy are sought in vain. Against this background, the analysis sheds light on AI-driven behavioural advertising practices and the policy considerations underlying the proposed new transparency obligations. In the light of the debate on trademark protection in keyword advertising cases, it will show that not only consumers but also trademark owners have a legitimate interest in receiving information on the parameters that are used to target consumers. The discussion will lead to the insight that lessons from the keyword advertising debate can play an important role in the transparency discourse because they broaden the spectrum of policy rationales and guidelines for new transparency rules. In addition to the current focus on consumer empowerment, the enhancement of information on alternative offers in the marketplace and the strengthening of trust in AI-driven, personalized advertising enter the picture. On balance, there are good reasons to broaden the scope of the DSA initiative and ensure access to transparency information for consumers and trademark owners alike.