News [12/13/2006 ]         The European Parliament on 13 December adopted its first reading report on the draft Audiovisual Media Services Directive. The Directive – the centrepiece of advertising regulation in the EU – is facing its second revision to ensure it is “future-proof” in the face of rapid technological developments, notably in the field of advertising. It will apply to all TV and TV-like services, including interactive TV, video-on-demand, IPTV, and mobile TV. WFA has actively contributed to negotiations since the Directive was first proposed, and is reassured to see key WFA priorities addressed: - The freedom to broadcast across borders is in principle preserved. - For the first time in the EU, the important role of self-regulation is fully recognised. - Despite considerable pressure, no new bans or restrictions on advertising are introduced. - Rules on inserting ads into programmes become more flexible. - For the first time in the EU, product placement is explicitly allowed in some programmes types. The foundation of the existing Directive is the so-called country of origin principle. This provides that a broadcaster is allowed to broadcast across the EU as long as it complies with the laws of its home country. Another country may not unilaterally prevent a broadcast from reaching its territory. This principle has been directly challenged by a number of EU countries trying to establish greater control over foreign broadcasts, but WFA helped ensure that it was not fundamentally altered by the Parliament.  Following the vote, an EU member state would be allowed to apply its own, stricter national rules only when it can show a broadcaster is established in a second member state solely to escape these stricter rules of the first. Following extensive efforts by WFA, the Parliament vote for the first time recognises that self-regulation can play an essential complementary role to statutory legislation, and encourages EU member states to make more use of such systems. This move is underlined by the Parliament rejecting (albeit by a narrow majority) calls for bans on food/drink and alcohol marketing, instead calling for greater use of self-regulation in these fields Reflecting a key WFA priority, the Parliament voted to ensure greater flexibility on the rules establishing how and when ads can be inserted into programmes, while maintaining a ceiling on the overall amount of advertising. The scheduling of ad breaks, today limited by law to a break every 20 minutes, would in the future be up to broadcasters for most programme types. Movies, news, and childrens’ programmes, already today governed by special rules, could in the future be interrupted by ad breaks once every 30 minutes. Following difficult discussions, the Parliament finally agreed to a new, European approach to product placement. While product placement is today subject to often conflicting and unclear national rules but no coherent EU-level framework, it would in the future be allowed across the EU in movies, TV series and sports broadcasts, unless explicitly banned at national level. However, it but would need to be identified before, after and during programmes (by a signal every 20 minutes). Undue prominence of featured products as well as promotional references would be prohibited, as would product placement in news and children's programmes.  Next steps: The Parliament’s vote will now be considered by national governments in the Council of Ministers during the German EU Presidency in the first half of 2007. After the Council has adopted its “Common Position” in May the text will go back to the European Parliament for a second reading. If the two institutions broadly agree on the text, the new Directive could be formally adopted by end-2007. It is likely that transposition into national laws will last 24 months, putting the application date in early 2010. For more information please contact m.lohan@wfanet.org