Parliament could prevent plans to ease ad rules

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BRUSSELS -- Plans to ease European Union rules on television advertising breaks and product placement could be ruined Monday if European Parliament members fulfill their pledge to defeat any liberalization efforts.

The Parliament's Culture Committee, meeting in Strasbourg, is set to vote on the European Commission's December 2005 plans to reform EU broadcasting rules.

The EC's proposed Audiovisual Media Services directive -- which would replace 1989's Television Without Frontiers directive -- aims to update the EU's broadcasting rules from the analog age to the era of the Internet, satellite, mobile phones and other technologies.

But a majority group of largely left-wing Euro-MPs has said it wants to block the proposed advertising changes as they would confuse consumers and lead to the rampant commercialization of television.

The EC's proposed changes to TV advertising would allow breaks in television programs whenever broadcasters choose, rather than every 20 minutes, as the 1989 rules demand. A new element is expected to say that films, news, current affairs programs and children's shows will be allowed breaks only after 30 minutes. An upper limit of 12 minutes of advertising per hour will be maintained.

The EC has argued strongly that any restrictions on product placement would be impractical. "The reality is that product placement is everywhere on television and in films," EC spokesman Martin Selmayr said. "You can't put white tape on Coca-Cola or blank the screen when a car comes on."

There are no EU-wide rules on product placement, so it already is used in much of the content broadcast in European countries. The new rules would allow it in all programs except news bulletins, documentaries and children's shows. The EC says the new directive would replace today's patchwork of differing national ones and provide legal certainty for operators.

"The common EU rules would prevent excessively intrusive and undisclosed product placement such as that sometimes seen in the U.S., where product placement is not subject to any legislative restrictions," Selmayr said.

The EC says product placement should help the European audiovisual industry become more competitive, noting that it already accounts for about 2% of the total advertising revenues of free-to-air broadcasters in the U.S. and grew by an average of 21% per year between 1999 and 2004.

It also insists that Euro-MPs are overreacting to the phenomenon. "So long as it is clearly identified as such at the start of the program, and the editorial independence of the media service provider is guaranteed, there is no reason to ban product placement," Selmayr said.

The European Group of Television Advertising also has raised concerns about a potential chilling effect on television revenues if the advertising restrictions are not amended.

"If we fail in modernizing advertising rules or if new bans are put in place, free-to-air television will not have the resources to offer the wide variety of programs and the original content that viewers are expecting," EGTA secretary general Michel Gregoire said. "Only citizens subscribing to pay-services could have access to good audiovisual content."

But the Euro-MPs are backed by Germany, which is the only EU government to call for an outright ban on product placement, saying it wants to keep a strict line between editorial content and advertising to protect consumers. The German government is expected to argue its case Monday. By coincidence, EU audiovisual ministers are meeting in Brussels at the same time as the Euro-MPs to examine the reform plans.

Another key issue for the Euro-MPs is how the new rules should apply to Internet services. The EC says the rules are "platform neutral" and apply whenever sounds and images are the principle aim of the service; when there is some sort of editorial responsibility in their production; and when there is a commercial aim. This would exclude video blogs, private e-mail or Web sites like YouTube.

However, some Euro-MPs are threatening to amend the measure to cover all Web sites. This would put the Parliament on a crash course with businesses, who say any attempts to regulate the net would lead to an overly-complicated, inflexible range of regulations that would strangle innovation.
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