EU adopts report on "the Impact of Advertising on Consumer Behaviour"

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22/12/2010
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Today the European Parliament formally adopted the own-initiative report of Philippe Juvin (EPP, France) on: "The impact of advertising on consumer behaviour" during the Plenary session in Strasbourg. The report was adopted by show of hands, with what appeared to be a large majority.

The report, discussed and amended by the members of the Committee for Internal Market and Consumer Protection, is the result of successful cross-party negotiations with the main political groups of the EP, and was largely supported when adopted in committee (30 votes in favour, 1 against and 2 abstentions).

The final text includes a number of important and positive points particularly with regard to the value of advertising, the positive role of advertising self-regulation, the usefulness of media literacy programmes such as MediaSmart and the fact that the text calls on the Commission to explore how the sale by search engines of registered brand names as advertising keywords can be made subject to prior authorisation from the brand owner in question. Previous calls for restrictions on online beverage alcohol advertising have also been removed from the final text.

While broadly supporting advertising self-regulation, this non-binding report sheds a negative light notably on interest-based online advertising (IBA), also known as online behavioural advertising and insists on the protection of children regarding this technique.

The report makes the following points:

1. Advertising is valuable and self-regulation is a dynamic "adjunct" to regulation
The report finds that advertising is an important and often "crucial" source of funding for the European media and therefore actively contributes to a diverse and independent press in Europe; it fosters competition and is beneficial for consumers, offering choice and information, and lowering prices.

The report adds that self-regulation is "a dynamic, flexible and responsible adjunct to the existing legislative framework" but should not take the place of legislation.

2. The UCP Directive is unevenly applied and unable to address certain techniques
The Unfair Commercial Practices Directive is an essential legal instrument to combat misleading and aggressive advertising, but is unevenly applied in Member States. It also fails to prevent "hidden advertising", which is defined by the report as "comments posted on social networks, forums and blogs (...) appearing to emanate from consumers themselves when in reality these are messages of an advertising or commercial nature".

3. New online advertising techniques are "pervasive" and constitute "attacks" on consumers' privacy
The report considers that the development of intrusive advertising techniques - behavioural advertising, profiling, geolocalisation, mobile phone ads, ads on social networking sites, ads in relation to email content - are an "attack" on consumers' privacy, if they have not been "freely and explicitly consented to by the consumer". It stipulates that "there is still a lack of information on the precise socio-psychological effects of new, more pervasive and more wide-spread forms of advertising".

In particular, the report calls for the prohibition of advertising generated by the content of emails. Advertising on mobile devices is also identified as "generating a range of problems", especially ads prompted using the Bluetooth technology, which should be prohibited unless prior consent has been given.

The report urges advertisers to "work towards a standard use of the consumer-friendly opt-in format" and promotes "privacy by design", according to which privacy and data protection are embedded throughout the entire life cycle of technologies, from the early design stage to their deployment, use and ultimate disposal.

4. Children should be better protected from advertising
The report calls for "greater protection of vulnerable consumers, such as children" and encourages the media to "restrict TV advertising addressed at children during TV programmes watched mainly by the young (such as children's educational programmes, cartoons, etc.), given that similar measures are already being implemented in some Member States". In particular, the report insists that all children's specific interests should be "free from targeted advertising".

The report also promotes educational programmes for children, and encourages the EU to develop a programme modelled on the UK's Media Smart initiative.

5. Advertising often communicates discriminatory messages
While advertising can be "an efficient tool in challenging and confronting stereotypes and a lever against racism, sexism and discrimination", the report finds that advertising often communicates discriminatory and/or undignified messages based on all forms of gender stereotyping. It also calls for "all advertising agencies and media professionals to reconsider the promotion of extremely skinny models".

WFA priorities: The WFA-coordinated cross-industry collaboration throughout the report drafting and adoption process is the source of the positive points addressed in the final text. WFA will continue to work with our partners at the European level to address the misperceptions and negative views which have come to light through this report, particularly on IBA.

Next steps: Although own-initiative reports like this are not legally binding, they are often indicative of the European Parliament's views vis--vis a specific issue. The broad support this report enjoys, by a number of political groups, sends a signal that MEPs are very concerned by the development of new advertising techniques, particularly from a "privacy" point of view. This is particularly important given that this report represents the first time the European Parliament has expressed its opinion on these issues. There is no immediate legislative follow-up to this report; however, it can be expected to feed into the ongoing review of the EU Data Protection Framework.


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