MEPs hold up single market in advertising

Date: 23/01/1997

By Chris Johnstone

MOVES to foster a single market in advertising are facing delays because of foot-dragging in the European Parliament .

The European Commission has extended its original November 1996 deadline for industry comments on its Green Paper on commercial communications until the end of March, having been warned that MEPs will not give their views on the document until April.

But Commission officials believe they should still be able to filter the replies and come up with a proposal by the summer.

Europe's advertising industry is impatient for Commission action to supersede national rules which segment the market and prevent companies from running EU-wide campaigns.

A series of recent battles between the Commission and Union governments have highlighted the problems posed for advertisers. Greece has tried to ban television toy adverts, Sweden wants to curb all advertising to children and France has cut advertising of alcohol and tobacco through sports sponsorship.

The Commission's Green Paper puts forward for the first time a checklist against which such national bans or restrictions, often justified as being in the public interest, would stand or fall. The list is designed to gauge objectively whether the national measure is “proportionate” with its aims.

It also suggests the creation of a committee staffed by member states. Most industry representatives have called for this committee to be used by the Commission to highlight problem areas in advertising where harmonisation or infringement procedures might be necessary. This, they say, should allow the insitution to identify issues and act much faster.

The advertising industry has broadly welcomed the Green Paper, with most of the 245 responses received by Christmas in favour. However, some companies and lawyers are concerned by the many questions raised by the paper.

British Telecom, which sees a lucrative, growing market in advertising and telemarketing on the information highway, is worried the Commission's good intentions might rebound and create a more cumbersome regulatory framework.

It wants the institution to vet all existing national rules for acceptability, not solely to subject future laws to the proportionality test. It also says a six-month time limit should be set for Commission decisions on national regulations, with organisations allowed to file petitions calling for a fast-track review of legislation if it is found to be blocking their activities.

The Brussels-based World Federation of Advertisers says the Commission's proportionality proposal is potentially effective, but unsatisfactory as it now stands. It calls for decisions within three months and for the institution to be given teeth to make sure that countries respect rulings made under the new procedures. But lawyers say it is unclear from the Green Paper how any changes would affect the Commission's existing power to freeze proposed national legislation for three months while it is scrutinised for acceptability.

Meanwhile, a French law banning retailers from using television advertising to sell their products or services is under scrutiny by Commission officials in response to a complaint against it.

The 1992 regulation banning all television advertising by retailers, publishing houses, newspapers, cinemas and film companies is partly aimed at protecting regional newspapers' advertising revenue by forcing publicity in their direction. The Presse Quotidienne Régionale claims it would lose between 10&percent; and 30&percent; of its advertising revenue if the law were changed.

Some French ministers have also argued that TV advertising costs would rise if retailers were allowed into the market.

But large retailers say the rules have passed their sell-by date in an age of digital television broadcasting. They have already launched direct attacks on the ban, as well as trying to circumvent it.

One sports chain, Decathalon, began producing its own goods so that it could advertise on television as a manufacturer and not as a retailer.

Electrical and white goods retailer Darty, on the other hand, has turned to sponsoring television weather forecasts so that its name is prominently displayed to viewers.

Retailer Edouard Leclerc took the legal route by appealing to France's Conseil d'Etat against a previous 1987 version of the ban, but lost. In 1993, Leclerc's petrol station subsidiary appealed to the European Court of Justice against the refusal by television channels TF1 and M6 to carry its publicity. The firm argued this breached the EU treaty by hindering the free circulation of goods, broke competition rules and infringed the Television Without Frontiers Directive.

The Court rejected Leclerc's complaint.