Big tech companies would have to reveal what data was used and refrain from using sensitive data to target people with political ads.
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The European Commission has announced new measures aimed at making online political adverts more transparent.
The plans are designed to force online platforms, like Facebook, to clearly label paid political advertising, or face fines.
According to Věra Jourová, Vice President of the European Commission, who was presenting the proposals on Thursday, online adverts are becoming an "unchecked race of dirty methods".
"Once this law is adopted, the users will be able to clearly distinguish the ads from organic content because paid content will be clearly labelled," Jourová told reporters. "Citizens will be able to know why they are seeing an ad, who paid for it and what data was used to target them."
Big tech companies would have to reveal what data was used and refrain from using sensitive data to target people with political adverts.
Some have criticised the initiative as a dangerous move that would create a "European ministry of truth", but for Doru Frantescu from Votewatch Europe, this is an unjustified concern.
"There is no concrete mechanism being proposed that would endanger freedom of speech," Frantescu told Euronews.
"I think what we will end up with some sort of soft mechanism, a soft co-regulation between the authorities and the platforms to ensure that the content is not misleading, not manipulative, and it is transparent as regards to who posted it."
The rules on political adverts must be approved by both the European Parliament and Council, and are likely to enter into force by 2024.
According to the European Commission, the plan is part of a larger clampdown on tech giants to protect democracy and comes just weeks after Facebook whistleblower Frances Haugen made fresh allegations of wrongdoings.