Regulation of product placement on online platforms

In 2021, EU Member States will have to transpose the audiovisual commercial communication provisions including the product placement legal regime provided for in the amended Audiovisual and Media Services (AVMS) Directive^[1].

Product placement is an opportunity for brand visibility, It is also an advertising practice that consists in placing one’s trademark or product visibly in a film, a television programme, a music video or a post on social networks.

As regards the latter, product placement enjoys the popularity of advertisers as they offer alternative outlets to traditional advertising channels.  Therefore, advertisers are increasingly working with influencers to post advertising content but in a framework which is often unclear and which can mislead viewers about the true nature of the message being broadcast.

Legally, product placement is governed by European Union law, where it is defined as any form of audiovisual commercial communication consisting in the inclusion of, or reference to, a product, a service or the trademark thereof so that it is featured within a programme or a user-generated video in return for payment or for similar consideration^[2].

What is the legal regime for product placement today?

Prior to the amendment of the AVMS Directive, the principle was the prohibition of product placement on all audiovisual media services – except in a very limited number of cases.

The amended AVMS Directive has reversed the principle and the exceptions and allowed product placement in all circumstances for all ^[3]audiovisual media services. Indeed, in its recitals, the amended AVMS Directive states that the past general prohibition did not provide legal certainty for media service providers^[4].

One should note the significance of this new principle since the revised AVMS directive has a very broad scope and applies to any social networks, video sharing platforms, live-streaming services – that are considered, in any case, as audiovisual media services^[5].

What are the requirements for lawful product placement?

Programmes that include product placement must comply with the following three formal conditions – compliance with which is governed by each Member States’ TV and radio regulatory body:

1. Their content and organisation within a schedule, in the case of television broadcasting, or within a catalogue, in the case of on-demand audiovisual media services, shall in no circumstances be influenced in such a way as to affect the responsibility and editorial independence of the media service provider;
2. They shall not directly encourage the purchase or rental of goods or services, in particular by making specific promotional references to those goods or services;
3. They do not give undue prominence to the product in question^[6].

Morevover, Member States shall ensure that product placement in the context of audiovisual commercial communications provided by media service providers, comply with the following requirements:

• Product placement is recognisable as such.

In other words, spectator shall be clearly informed of the existence of product placement by means of appropriate identification at the beginning and end of the programme.

However, the amended AVMS directive does not identify any particular means of ensuring compliance with this principle – unlike the product placement on television, where the pictogram “P” is supposed to inform viewers of the existence of product placement for one minute at the beginning of a programme and after each advertising break, as well as for the duration of the end credits.

In the case of Youtube, a content declaration mechanism exists and invites the user to fill in information intended to identify the audiovisual commercial communication nature of the video in question. Once filled in, this declaration is supposed to trigger the display of a notice on top of the video.

• Product placement does not use subliminal techniques.

Put another way, product placement will be regarded as surreptitious advertising^[7] when it does not offer proper information and should be sanctioned as such.

In the case of television, in the event of surreptitious advertising, the editor in question is subject to formal notices from the CSA to comply with the regulations and might, where appropriate, be penalised financially. Sometimes, sanctions may even include the suspension of a programme.

• Product placement does not:

• Prejudice respect for human dignity;
• Include or promote any discrimination based on sex, racial or ethnic origin, nationality, religion or belief, disability, age or sexual orientation;
• Encourage behaviour prejudicial to health or safety;
• Encourage behaviour grossly prejudicial to the protection of the environment^[8]

In particular, product placement shall not cause physical, mental or moral harm to minors.

To this end, it should not:

• Directly encourage minors to buy or rent a product or service by exploiting their inexperience or credulity;
• Directly encouraging minors to persuade their parents or others to purchase the goods or services being advertised;
• Exploit the special trust minors have in their parents, teachers or others;
• Present minors in a dangerous situation without a reason^[9].

Ongoing Restrictions around Product Placement

Prohibitions related to the programme in question

There are four exceptions to the principle of product placement in view of the programme in question^[10]:

• News and current affairs programmes ;
• Consumer programmes,
• Religious programmes ;
• Children’s programmes – as children are generally unable to recognise commercial content^[11].

Prohibitions related to the products involved

Some products are not eligible for product placement, per se, namely:

• Cigarettes and other tobacco products, as well as electronic cigarettes and refill bottles, or product placement from companies whose principal activity is the manufacture or sale of these products;
• Specific medicinal products or medical treatments available only on prescription in the Member State under whose jurisdiction the media service provider falls^[12].

In conclusion, the new legal regime of product placement represents a new phase of advertising regulation in Europe, for brands.

In addition, as one can see fromFrance, this transposition comes at the same time as the discussion on a law bill which may include, on the fringe, provisions relating to the regulation of advertising (e.g.: ban advertising for fossil fuels) and illustrates the contemporary, societal and environmental questioning relating to the regulation of this sector – that may concern trademarks owners.

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^[1] Directive (EU) 2018/1808

^[2] Article 1 h) of the amended AVMS Directive

^[3] See Article 11-2 of the amended AVMS Directive

^[4] See Recital 33 of the amended AVMS Directive 

^[5] Article 1 a) of the amended AVMS Directive

^[6] See Article 11-3 a) of the amended AVMS Directive

^[7] Surreptitious advertising is any verbal or visual presentation of goods, services, the name, the trademark or the activities of a producer of goods or a provider of services in programmes, where such presentation is made intentionally for advertising purposes and is likely to mislead the public as to its nature. A presentation shall be regarded as intentional in particular where it is made in return for payment or for similar consideration.

^[8] See Articles 1 b) c) of the amended AVMS Directive

^[9] See Article 9-1 g) of the amended AVMS Directive

^[10] See Article 11-2 of the amended AVMS Directive

^[11]See: Article 12-2 of the amended AVMS Directive

^[12] See Articles d) and e) of the amended AVMS Directive