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Nobody should expect me as European Commissioner for the media to follow my liberal course on advertising regulation only with regard to the print media. Consumers, readers, viewers and Internet surfers are entitled to make up their own minds as regards all ways of using the media. Anyone asking me to defend the print media against advertising bans but to maintain outdated restrictions on television advertising is knocking at the wrong door. And they would be acting against their own interests. The tobacco advertising ban shows it is very likely that advertising restrictions applicable to the audiovisual media will at some time be carried over to other media.

This brings us to the final part, the issue of surreptitious advertising and product placement which is currently the subject of heated debate in Germany. Since 1989, surreptitious advertising has been banned in all EU countries under the EU Television Directive. This ban is an important European media policy achievement as it forbids the television viewer from being deliberately misled by the television broadcaster. To avoid any misunderstandings right from now: surreptitious advertising on television has been prohibited since 1989 and will remain so in future under the modernised Television Directive on which we are presently working.

For some years, however, there has been something in the European media landscape which we have known about for a long time from American films but which is very poorly covered by existing statutory regulations: this is the issue of product placement. Product placement raises difficult practical and legal questions for the media supervisory authorities. How, in terms of media law for example, do we rate the BMW which was so often and so prominently visible in the latest James Bond films? And what about the Lotus Esprit which during the first ten minutes of “Pretty Woman” appears – much to my personal regret – more times than Richard Gere? Imagine the headline announcing a decision: “The European Commission bans James Bond films from Europe’s television screens” – now that really would put Brussels on the front pages of the daily newspapers in all 25 EU countries!

But seriously, product placement today occurs in a grey legal area. Not all product placement is covered by the EU-wide definition of surreptitious advertising. According to the Television Directive, surreptitious advertising only exists when three cumulative requirements are met: first, it must be shown that the television broadcaster’s action is deliberate; second, the television broadcasters’ action must be intended to achieve an advertising effect; and, third, there must be a risk of the public being misled as regards the purpose of mentioning or showing the product.

In the case of the James Bond film, it is not the action of the television broadcaster showing the film which is deliberate but rather the action of the Hollywood studio where the film was made. As it is, it is doubtful whether there is any advertising effect when a BMW is cut up into small pieces using a circular saw, as one was in the film “The world is not enough”– a scene BMW opponents took great pleasure in disseminating over the internet saying: “This is the proper way to treat a BMW”. Finally, how daft do we think viewers are if we think this placement of a BMW will mislead them? As you see, much of this is unclear, and two media legal experts are quite likely in such cases to have three different opinions on the subject.

This lack of legal certainty is one of the reasons why the European Commission has been addressing the issue of produce placement since 2003 and has consulted the whole of Europe and received very many informative comments, including from journalists’ associations and the print media. The lack of legal certainty is increased by the fact that most EU countries do not have any statutory regulation of produce placement, but leave the issue to broadcasting organisations themselves or to the judgments of the courts, which makes it extremely difficult to manage this issue from one country to another. In the comments sent to the Commission, European film producers complain that they are at a considerable disadvantage compared with their US competitors because of the unclear legal situation in Europe. US films may be financed through produce placement, while in Europe, where the film industry has to struggle hard against US competition as it is, the legal situation differs from one country to another and it is often unclear whether such financing is legal or not.

In my view, the European Commission must create legal certainty. We must introduce a legal regulation to make it clear what surreptitious advertising is and when product placement may exceptionally be legal. Such a regulation should, in my view, strike a balance between three important public interest objectives: protection of the consumer against being misled; boosting the competitiveness of the European contents industry; and preserving the independence of editors.

The Commission has not yet taken a final decision. I could however imagine a regulation which prohibits any form of product placement in news programmes, reports and documentaries where protection of the independence of the editorial content must have absolute priority in the interests of free reporting. Conversely, I can imagine product placement being allowed in the fictional area – cinema films, television films and television series – provided viewers are clearly informed.

Anyone who looks at the legal situation in Austria will soon see that such statutory rules are quite possible without this being the beginning of the end of the western world as we know it. Furthermore, the distinction, to which I referred, between news and information programmes, on the one hand, and fiction, on the other, would also ensure that the spillover sometimes feared onto the print media would be extremely limited from the very start. The print media must take account of a further new development in the EU: since 11 May 2005, the EU Directive on unfair business practices prohibits so-called “advertorials” throughout Europe, which at least clearly regulates the legal situation for the print media." Lees hier meer.