Chapter DST19400
| Published date | 19 March 2020 |
| Record Number | DST19400 |
The second stage in the associated online advertising service provisions is to identify whether the group’s online advertising services are associated with a digital services activity.
This section explains when an online advertising service is an associated online advertising service, and consequently when its revenues should be included in the revenues of the digital services activity(ies) it is associated with.
An associated online advertising service is an online advertising service which derives a significant benefit from its association with the social media service, search engine or online marketplace.
There are consequently two elements:
- The online service must be associated with a social media service, search engine or online marketplace
- The online service must derive a significant benefit from that association
The legislation does not define ‘associated with’ so this takes its ordinary meaning.
An online service will be associated with a digital services activity when there is a relationship or connection between them. This is intended to be a broad concept which will be met whenever there is a link between the two services. It does not matter how strong that link is or in what way the two services are connected.
Example A
ABC group operates an online marketplace. It also has an ad server which places adverts on the marketplace and on third party websites. The ad server and the online marketplace are associated.
Significant benefitThe significant benefit test is designed to filter out cases where the online advertising service does not receive a significant benefit or advantage from being associated with a digital services activity. This is because these provisions are only intended to apply when the digital services activity makes a material contribution to the wider [online advertising] revenues of the group, such that these revenues can be seen to be derived from or attributable (at least in part) to the digital services activity.
It is a qualitative test which considers whether the online advertising service receives significant benefits from its relationship with the underlying digital services activity. There is no requirement to quantitatively measure the benefits received.
Significant is not intended to be a high threshold. It is only intended to exclude cases where there is no benefit or a...
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