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11 May 2009

Please find below this week's main EU regulatory developments related to advertising.

Please don't hesitate to contact us should you require any further information.

Kind regards,
Malte

Energy labelling

EP calls for energy labelling in advertising

On 5 May 2009 the European Parliament (EP) adopted a report which seeks to extend energy labelling requirements to all advertising for household appliances and other “energy-related” products.

The report, adopted by a large majority, responds to the Commission’s proposal to amend the EU’s Energy Labelling Directive (see EU Brief 23/03/09). This sets out a series of requirements for the labelling of household appliances (refrigerators, freezers, washing machines, driers, dishwashers, ovens, lighting sources), including an “A-G” energy efficiency rating label.

The aim of the Commission’s proposal is to extend the scope of the Directive to cover all “energy-related products”, (i.e. products having an impact on energy consumption during use). The types of products included in this definition would be decided subsequently by the Commission and Member States through product-specific legislation. Although the most immediate plans are for products such as windows, insulation materials and showerheads, the intention is for future EU legislation to cover all energy-related products in the household, commercial and industrial sectors.

The EP adopted an amendment that aims to extend the environmental labelling requirements (currently for product packaging and on point of sale literature) to all advertising which discloses technical specifications for products.

Next steps: The Energy Labelling Directive will now be discussed by Member States in the Council, which will decide whether or not to support the EP’s amendment.

WFA Priorities:

WFA will continue working with industry partners with a view to seeking a review of this disproportionate requirement for advertising to carry energy-related information.

Online advertising

EP imposes new consent requirement for cookies

On 6 May 2009 the EP voted at second reading on the Telecoms Package, a set of directives which aim to – among other things – regulate certain aspects of online privacy and data protection. The EP adopted an amendment that may affect the ability of online advertising to be targeted based on users’ interests.

The text adopted is the result of a compromise brokered by the Czech Presidency, the EP and the Commission, following lengthy negotiations (see EU Brief 04/05/09). According to this compromise, online advertisers will have to obtain internet users’ consent before placing cookies on their computers. Cookies – the strings of letters and numbers used to optimise navigation of the internet (e.g. remembering passwords and language settings) – are used to target online ads on the basis of users’ interests.

It remains to be confirmed how the consent requirement would be implemented in practice. Existing legislation requires users to be given the possibility to “opt out” whenever cookies are placed on their computers. If the new rule is interpreted as a requirement to “opt-in” to the placement of cookies this might significantly disrupt users’ online experience while complicating online advertising.

Next steps: The Council may endorse the EP’s amendments, in which case the proposal is deemed adopted. Alternatively, the Council may decide to open a conciliation procedure on another aspect of the Telecoms package, in which case the amendment on cookies might be re- negotiated. Such a conciliation procedure would be unlikely to start before the autumn, under the Swedish Presidency and with a new EP. The Member States will meet at technical level on 15 May and possibly at ministerial level on 12 June.

WFA Priorities:

WFA is working with industry partners to explore opportunities for re-opening inter-institutional negotiations on the cookies amendment. If it is ultimately adopted, WFA will aim to ensure that the practical implementation of the consent requirement does not unduly disrupt online advertising.

Online advertising

Commission launches online guide to "digital rights"

On 5 May 2009, Meglena Kuneva, EU Commissioner for Consumer Affairs, and Viviane Reding, EU Commissioner for Information Society and Media, launched the eYou Guide, an online tool for European internet users that informs them about their rights in the digital environment.
The website explains all the rights offered by European legislation in the online market. The objective is to guarantee user confidence and improve the conditions for cross-border online shopping to flourish. It provides information on a wide range of topics including:

  • Protection of privacy and personal data online (e.g. a series of recommendations to prevent misuse of personal information online).
  • Safety and security on the internet.
  • Rules for online advertising (a non-exhaustive list of illegal offers, advertisements and other unfair commercial practices online that users should be aware of).
  • Liability issues and possibilities of claiming redress and enforcing users’ rights.
Under a chapter on ‘Ads and Kids’, the eYou Guide reminds online users that, under the Unfair Commercial Practices Directive, “direct appeals” to children to buy advertised products are an illegal practice [the Directive refers to “direct exhortations”]. The guide goes on to give a short brief on what parents should do to complain against such practices.

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