Source · Select Committees · Treasury Committee
Recommendation 18
18
Accepted in Part
Paragraph: 97
It is not appropriate that online companies should profit both from paid-for advertising for financial...
Recommendation
It is not appropriate that online companies should profit both from paid-for advertising for financial products and from warnings issued on their platforms by the Financial Conduct Authority (FCA) about those advertisements. We urge all online companies to work constructively with the FCA and to follow Google’s example by giving advertisement credits to the FCA for the future. We also expect them to refund money that has been spent in the past by the FCA.
Government response summary AI-generated
The government agrees it's inappropriate for online companies to profit from both ads and warnings, notes Google offered advertising credits, but mentions struggling to engage with other platforms and that there will be no refund of past spending.
Summary of the government's response below — read the verbatim text to verify.
Paragraph Reference:
97
Government Response
Accepted in Part
HM Government · verbatim extract
Accepted in Part
On 9 March, the government announced a new standalone duty requiring firms to tackle fraudulent advertising as part of the Online Safety Bill. For the first time, companies will have to proactively tackle these ads, instead of potentially benefiting financially from paid-for fraudulent advertising. The government will be working with Ofcom, who will be producing codes of practice to outline the application of the duty. We expect online companies to do their utmost to tackle fraudulent advertising, including verification checks by the regulated company ahead of entering a business arrangement with a potential advertiser; proactive inspection measures to ensure the safety of the advert; and controls to ensure that fraudulent adverts are speedily removed. Separate to the new fraudulent advertising duty, the FCA already has a range of supervisory and enforcement powers available to enforce financial promotion rules on the internet. To promote a financial product, a firm must either be authorised by the FCA or have its advertisement approved by an FCA-authorised firm. This means that authorised firms must not approve the content of a financial promotion unless they are satisfied that the promotion meets the FCA’s rules. Where a financial promotion fails to comply with the FCA’s rules, the FCA already had a wide range of powers to deal with this, including to require the withdrawal of the promotion. Financial adverts hosted on online platforms now need to be communicated or approved by an FCA authorised person. As mentioned above, the government brought this about through a change to the financial promotion regime following our exit from the EU. The changes mean online platforms can no longer rely on an exemption to the financial promotions’ regime for their paid for advertising. Following this change, and after significant engagement between the FCA and government, Google announced a new Financial Services Verification policy to ensure only FCA authorised firms or firms with promotions approved by an FCA authorised firm can advertise financial services products on Google. Other platforms have committed to put in place similar policies. 12
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