Netherlands votes to approve Meta fines as industry piles on the pressure

The Dutch gambling regulator will be granted powers to fine Meta and others over black market ads, just as a trade group hauls the social media giant before a judge to answer for its alleged crimes.

Politicians in The Hague voted on Tuesday to give the Netherlands Gambling Authority (KSA) the ability to take enforcement action against social media companies if they fail to act on reports of illegal advertising.

The motion calls on the Dutch government to change the country’s gambling act to clarify that an “online platform commits an infringement itself upon the repeated display of illegal gambling advertising following a removal request, for which the Gambling Authority may impose an administrative fine or a penalty payment order”.

As has been the case with a number of changes to gambling regulations in the Netherlands over the past half-decade, the vote was not called by the government, but is nevertheless expected to be honoured, and will require ministerial time to craft the specific amendments and have them passed into law.

So while it may be some time until the KSA actually gains possession of its new powers, the vote sends a message to social media companies and Meta in particular, which was namechecked in the motion.

Meta and others have maintained that they have rigorous systems in place to prevent illegal ads and allow stakeholders to report marketing they believe may be in violation of the law.

The new powers envisaged for the KSA would only make social media firms liable for enforcement if they fail to remove ads after they are reported.

Industry joins the pile-on

Anger over the ease with which unlicensed gambling operators are able to advertise on Netherlands-facing social media platforms has created an unlikely alliance between local gambling industry and lawmakers.

Firing a salvo of its own, trade group VNLOK filed a legal suit against Meta on Monday, alleging the “large-scale dissemination of illegal gambling advertisements via Facebook and Instagram”.

The trade group pointed to its own research which found that more than 90% of the ads for gambling on Facebook directed users to illegal operators.

It said that only 11% of those were removed by Meta in May and 15% in June.

Unlike Dutch politicians, VNLOK is demanding that Meta be more proactive in removing infringing gambling ads.

It notes that marketing for black market operators usually only appears very briefly, as affiliates and other advertisers rapidly cycle through ads.

This means that the process of reporting an infringing ad to Meta and then waiting for it to be removed is often too slow to make any impact.

“We have repeatedly pointed out the scale of the problem to Meta and asked them to cooperate structurally in finding a solution,” said Bjorn Fuchs, chairman of VNLOK.

“That has yielded insufficient results. Therefore, we are now submitting the case to the Dutch courts.”

VLNOK has asked judges in The Hague to determine whether Meta is complying with its obligations under the European Digital Services Act (DSA).

Combined effort

The timing of the Dutch court filing, just as politicians in The Hague were debating the same issue, appears to be no coincidence.

“We see that the House of Representatives is also explicitly putting the responsibility of platforms on the agenda,” said Fuchs.

“That is an important signal. Illegal gambling providers can only reach Dutch consumers by using the infrastructure of large online platforms.”

Frustration with Meta and its peers over the easy access it provides to the black market is not limited to the Netherlands.

The now ex-UK Gambling Commission executive Tim Miller has used frequent speeches to specifically call out Meta for their inaction over gambling ads.

“These social media companies are making a shedload from this and it’s undermining everything that we’re doing,” he said.

His views have been echoed by officials in France and at the KSA in the Netherlands.

The KSA says that it makes frequent complaints to Meta about illegal ads that it discovers on its platform, but VNLOK says that the regulator should go further even before its new powers are in place.

“The regulator must hold parties that play a role in reaching Dutch consumers with illegal offerings more emphatically accountable for their responsibility. No legislative amendment is needed for this; the regulator already has those legal options,” said Fuchs.

Bullet dodged

In The Hague on Tuesday, the regulated gambling industry in the Netherlands narrowly avoided more pressure on its own advertising, even as politicians voted to censure Meta.

Other motions related to gambling voted on during the same session included a proposal to ban gambling advertising in its entirety.

The effort fell short by 12 votes, with 64 members of parliament voting in favour.

Other motions that did receive sufficient support included a requirement to place warning messages on black market websites that are subject to an DNS block.

In a potential blow to the industry, a motion was approved that would bring forward a government plan to increase the minimum age for gambling to 21.