Self-regulation: Money down the drain… ...or life jacket for the advertising industry?

1. Self-regulation: Money down the drain… ...or life jacket for the advertising industry? Dominic Lyle Director General EACA

2. What is self-regulation? • Industry polices itselfto make sure ads are legal, honest, truthful and decent • Standards & rules • National SROs apply rules We love advertising so much that at times we have to restrain it

3. What is a Self-Regulatory Organisation (SRO)? ‘Advertising Watchdog’ Independent body, guardian of the code Funded by industry REACTIVE: • Handles consumer & competitor complaints • Issues sanctions (modify or withdrawal) PROACTIVE: (EASA Best Practice) Advice, training and awarenessMonitoring compliance with the codesBenchmarking

4. Complaints handling in Europe • SROs in Europe deal with +/- 50,000 complaints every year • This represents less than 0.1% of total number of ads published Advantages of complaint handling through SROs • Quick – complaints usually handled within 3-30 working days • Cheap – usually complainant does not have to pay • Easily accessible • Industry listens to SRO rulings -> effective sanctions

5. Examples of complaints – indecency Ireland - Outdoor poster Complaint: Offensive, direct link to sex, not suitable for children Ruling: Complaint upheld Sanction: Campaign withdrawn & report released Spain - Outdoor poster Complaint: Woman portrayed as sex object Ruling: Complaint upheld Sanction: Campaign withdrawn worldwide after similar ruling in Italy

6. Misleading ads: #1 reason to complain UK – ad in various media Complaint: unsubstantiated claim “the product’s antioxidants could help keep people healthy” Ruling: Complaint upheld Sanction: Campaign withdrawn • Cost: £15million • Contract with agency terminated

7. Digital media • New challenge • No need for new code -> need for application of established principles to new circumstances EASA’s digital strategy • Will not include editorial content • Still discussing brand-owned websites • Brief Commission in April 2008 • Finalise strategy and best practice recommendation by mid 2008 Crazy frog: - offer not transparent- appeal to children

8. EASA – European Alliance for advertising self-regulation Promoting responsible advertising through best practice in self-regulation 31 SROs in 29 countries: • 25 European SROs • 6 corresponding SRO membersAUS, BR, CAN, IND, NZ, SA 16 industry organisations: • Advertisers • Agencies • Media

9. Promoting effective self-regulation? June 2004: EASA members publicly signed the EASA Advertising Self-Regulatory Charter • Geographical coverage • Media coverage • Funding • Codes • Consultation • Administration • Complaint handling • Advice • Sanctions • Consumer awareness 2004 Summit: “Advertising Self-Regulation: Launching a better system for a bigger Europe”

10. Charter & Commitments Feb 2005: ‘EASAwhite paper’ presented to Commissioner Kyprianou =>EASA pledged to report on EU-25 implementation by end 2007. EASA introduced « Get fit programme » to meet targets During the same period DG Sanco Advertising Roundtable discussions were organised on basis of EASA Charter

11. Comments from EU Advertising Round Table “The Round Table agreed on a best practice model, […] which coincides with the essential thrust of recently adopted EASA best practice” “I am confident that self-regulation will be given the full weight in society’s choices among the menu of regulatory options.” Robert Madelin, Chair of EU Advertising Round Table

12. SR works & is getting stronger • Geographical coverage => 81% of EU-27 (5 SROs more) • Operational SROs: Poland & Lithuania • SROs in progress: Cyprus & Estonia • Monitoring =>EASA BP Recommendations & EASA BP Compliance model • Jury composition EASA BP recommendation on jury composition incl. Lay experts

13. Commissioner Meglena KunevaDG Sanco – Consumer Protection “Self-regulation today has a truly European dimension, thanks to the work that has been carried out by the European Advertising Standards Alliance over the years. I am sure that we can go further together to establish advertising self-regulation as a living best practice model - it has an important role to play in a modern and efficient regulatory framework.” Recognition of SR Robert Madelin - DG Sanco “… the willingness of EASA and all others involved in the current debate to explore what a strategic improvement in SR quality might involve, does create some confidence that SR is capable of a sustained move over time towards a level of heightened effectiveness.” Commissioner Viviane Reding DG Infso“The increasing sense of responsibility of the advertising industry could in my view lead to deregulation in the field of advertising”

14. SR mentioned in several directives & EU publications • Audiovisual Media Services Directive (Dec 2007) Article 3 (7) states that co- and/or self-regulation have proven to be valuable instruments in some Member States. The AMS obliges the Member States to encourage such mechanisms at national level in the fields coordinated by AMS to the extent permitted by their legal systems. • Food white paper (May 2007) The white paper recognises the added value of and supports advertising self-regulation. • Unfair Commercial Practices Directive (May 2005) Articles 10 and 11 of the UCP recognise the valuable role played by voluntary business self-regulation. • EU Alcohol strategy (2006) Commission does not intend to implement the strategy through specific new legislative proposals

15. Conclusions • Self-regulation works and is recognised as such • Defined model for effective self-regulation at EU advertising Round Table organised by DG Sanco • Definitions in the Inter Institutional Agreement need to be revised to reflect reality

16. “This is not so much a debate about self-regulation against hard-law, but rather about how law and self-regulation can and should interact in modern Europe” Conclusion Robert Madelin, Chair of the European Advertising Round Table organised by DG Sanco