The World: Advertisers prepare for 'small print' EU directive

Europe's print and broadcast owners fear that new regulations could drive brands to advertise online, John Tylee writes.

Imagine a time when a pan-European television commercial advertising Fisher-Price's "laugh and learn" toy grand piano shows not only giggling toddlers playing with the product, but also carries a list of the most mind-numbing information.

Such as the fact that Fisher-Price is the trading name of Fisher-Price Inc, the company's address (696 Girard Avenue, East Aurora, New York, in case you are the slightest bit interested) and that the baby grand requires three LR 14 alkaline 1.5V batteries (not included).

Or what about an Air Berlin print ad promoting £19 fares between Germany and the UK which carries such minutiae as what customers need to do if they want to cancel a reservation for a pet.

What unites these ads is that both include the price of the product that is being offered. According to European Union legislators, that constitutes an "invitation to purchase". As such, it would fall foul of the EU's directive on unfair commercial practices, which is due to come into force by the end of next year.

"If you think that all the 'health warnings' currently carried on financial advertising is bad, this would be much worse," an industry lobbyist warns. "The potential effect on the continent's retail advertisers hardly bears thinking about."

The prospect is causing considerable alarm among ad industry lobbyists across the continent who regard it as an over-zealous interpretation by the EU's Directorate General for Health and Consumer Affairs (DG SANCO for short) of what was originally intended.

The European Association of Communication Agencies and the World Federation of Advertisers is pressing the European Commission to think again. Meanwhile, the Brussels-based European Federation of Magazine Publishers (FEAP), at the behest of Britain's Periodical Publishers Association, is alerting its members to what it calls a potentially "chilling" effect on advertising revenues.

In the UK, industry bodies, including ISBA, met Department of Trade and Industry executives last month and urged them to put pressure on Brussels. Sources say the DTI is opposed to the new restrictions and will try to bring together an alliance of EU states to get them dropped. Officials in France and Germany are said to be among those coming to realise that the directive is flawed.

The controversy has blown up over the EU's proposal that any ad which includes a price is an "invitation to purchase". As such, the advertiser placing it must include their full name and address, any terms and conditions attached to the offer and cancellation rights.

"Of course it's important that people know what product they are buying and what means of redress are available to them," Ian Twinn, ISBA's public affairs director, says. "But they need that when they are in the shop, not when they are just looking at an ad."

As so often with EU directives, the devil is in the detail of what has been a protracted process aimed at ridding the continent of unfair commercial practices. "The reason people are so agitated is that this proposal emerged very late in the process," Hamish Pringle, the IPA director-general, says. "The danger is that this drifts through almost before anybody realises it."

Among Europe's print and broadcast media owners, the big fear is that such restrictions would speed the migration of ad revenue into online, where all this extra information could be more easily provided.

Industry calculations suggest that an advertiser would need to buy an extra 20 seconds of airtime to pack all the necessary information into a radio commercial. In the most extreme cases, some print campaigns would require double the amount of space than at present, it is claimed.

David Hanger, the FEAP president and a former publisher of The Economist, says: "Almost every ad is an 'invitation to purchase' unless it is a brand ad. We will be arguing that the proposed regulations are far too strict and go way beyond what was intended."

However, Dominic Lyle, the director-general of the EACA warns against undue panic. "We're being vigilant but the directive isn't due to come into operation until the end of next year and there is still time to get it adjusted," he says. "At the moment, we are trying to get this clarified."

The EACA's argument is that what the EU regards as an additional safeguard for consumers, will prove to be nothing of the kind. Advertisers could sidestep the rules by dropping any mention of prices. But what possible benefit would that provide for potential customers, it asks.

Also, Europe's consumers have grown increasingly cynical about all the small print that currently appears in ads. "They don't see this as cover for customers but 'get out' clauses for the advertiser," Pringle points out.

The big question, of course, is how likely the EU states are to implement the directive, warts and all, given that, unlike some other legislation coming out of Brussels, it is not binding. However, the EU expects governments to implement the necessary measures to achieve a directive's objectives.

A major concern among some lobbyists is that EU governments could take the so called "copy-out" option. This allows any implementing legislation at national level to adopt the same wording as the directive.

This practice has become increasingly popular with member states ever since the European Court of Justice allowed EU citizens to take legal action against governments in their national courts if they believe an EU directive is not being properly implemented.

"EU governments are increasingly frightened of being sued," Philip Circus, an advertising and marketing law consultant, explains. "The result is that directives and binding legislation are becoming almost indistinguishable."

The most worrying outcome is that any "invitation to purchase" rules will be so full of anomalies that they will have to be defined case by case. As Circus puts it: "The future looks rosy for the lawyers."

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