Finding new ways to regulate advertising and other forms of commercial communications in the age of on-line communications
Currently there is no single market for commercial communications in Europe. The differences that exist as a result of differing national regulations create a barrier to the single market and, unless the EU Institutions and Member States take action to bring this sector into line with policies applicable to other sectors in the internal market, the cost to business and consumers will remain unacceptably high.
The major differences between national rules and the policy objectives behind a number of EU initiatives threaten the coherence of the internal market and the media and advertising industry has long called for an overall appraisal of the commercial communications sector. The European Commission has invited comments on proposals and suggestions for policies which could change the way in which advertising and other forms of commercial communications are regulated in Europe. The media and advertising industry has been pumping the Commission with comments and recommendations since the proposals were first published in a Green Paper last year.The European Parliament is due to debate and vote on these proposals during the July plenary session in Strasbourg. The industry is hoping that this process will lead to a coherent and long overdue review of commercial communications in Europe.
A new approach for a new age of on-line communication
The increasing use and popularity of new forms of commercial communications on the electronic networks challenge the very core of existing regulation,both in terms of some very detailed content regulation and in terms of territoriality. A new approach to regulation must be found based on the well established principles of freedom of expression and the right to receive information. The Internet itself and the World-Wide Web are based on these two principles and provide for a new-found freedom to communicate and provide services on a world-wide basis. Regulation has to move with the times and match this exciting development in the freedom of expression. The industry believes the only way forward is through mutual recognition of rules which apply at national level (based on the principle of country of origin control) and self-regulation. Any attempt at pan-European legislation to harmonise advertising rules will surely fail.
For many years the European Community attempted to eliminate barriers to the free movement of goods and services through harmonisation of national rules by Directive but this process has proved to be both difficult and cumbersome. In an attempt to ease the completion of an internal market in Europe,the principle of mutual recognition was introduced by the European Court of Justice, as far back as 1979.
As far as the commercial communications sector is concerned, there is a considerable body of regulation which relates to media and advertising.There are two main EU Directives which relate directly to this sector:the 1984 Misleading Advertising Directive and the 1989 Broadcasting Directive.In addition there are sector specific directives which contain rules on marketing and advertising, e.g. pharmaceuticals, food, baby foods, banking,consumer credit. Furthermore there are numerous, differing national regulations,both statutory and self-regulatory, which apply to advertising in the press, on television, on posters as well as to direct mail and sales promotion practices. Truly pan-European advertising or sales promotion campaigns are often difficult today.
An advertiser may have to pay for up to 15 different advertisements in order to make information about his product or service available to consumers across the EU instead of just one. In some countries, where national bans have been imposed on certain types of advertising, advertisers are unable to communicate directly with consumers through advertising at all.
The principles of country of origin control and mutual recognition
The internal market principles of country of origin and mutual recognition were enshrined in the Broadcasting Directive to allow the free flow of television broadcasts(which often contain broadcast advertising) throughout the EU. Under the terms of the Directive, Member States must permit the reception and re-transmission of television broadcasts in their entirety from anywhere within the EU which conform with the terms of the Directive. Member States may only block foreign broadcasts on the grounds of the protection of minors, public morality and state security. Member States can, if they wish, impose stricter rules on their domestic (national) broadcasters, within the limits set by the Treaty, but may not invoke these rules to prevent non-domestic broadcasts being broadcast within their jurisdiction. The application of the principles of the country of origin and mutual recognition means that broadcasts from another Member State may contain advertising which has been banned or restricted on the receiving countries’ domestic channels.
The same is true of the printed press. Under Article 30 of the Treaty,newspapers and magazines from any Member State may be sold throughout the EU so long as they conform to the legislation and self-regulatory advertising codes of the country of origin.As in the case of television advertising,this can mean that foreign newspapers and magazines can contain advertising that does not conform to the rules on advertising(either statutory or self-regulatory) in the receiving country.
When a consumer wishes to make a complaint, the country of origin principle guarantees that the consumer has direct redress via the legal system which has jurisdiction over the service provider (country of origin) rather than seeking redress via a system that has no direct or immediate jurisdiction over the service provider, i.e. the receiving country.
At present, in practice, it is often not possible for an individual advertisement automatically to be placed anywhere in the EU, even if it has been legally published or broadcast in any one Member State. It only acquires a "passport"to circulate freely throughout the EU if it is contained in either a television broadcast or a newspaper or magazine which crosses internal frontiers.
The European Commission, in its Green Paper on Commercial Communications, opens the way for a re-assessment of these many rules on advertising and other forms of commercial communication like direct marketing, sponsorship and sales promotion.Both statutory and self-regulatory rules will need to be examined with regard to theirproportionality as a first step to creating a truly internal market for the commercial communications sector. In some cases, where some of the more detailed advertising rules which exist at national level prove to be disproportionate and a barrier to the proper functioning of the internal market,this could lead to the dismantling or revision of some advertising rules.
If the Treaty principle of free movement, supported by the principles of country of origin and mutual recognition, is strictly applied to existing and proposed advertising regulations in the Member States (subject only to those restrictions which are proportionate) we will move towards a situation where pan-European advertising campaigns will be possible. This must be beneficial to the commercial communications sector and consumers alike.
European Publishers Council
23 June 1997