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European Commissioner for Health and Consumer Protection

Advertising and Commercial Communication

World Federation of Advertisers 50th Anniversary Congress

Brussels, 28 October 2003

I am delighted to have been offered the opportunity of joining you here today on the golden jubilee of your organisation. Congratulations on reaching this impressive milestone!

It is interesting to note that perhaps the two most important developments within your industry occurred at either end of your 50 year existence to date. Fifty years ago saw the arrival of television advertising and more recently the growth of the internet has offered a new means of communication and new opportunities for the future.

However despite developments of advertising techniques and of course the products they are designed to promote, it is a fact that, even now, some of the slogans I can recall from my childhood are still being used, which shows that some of the fundamentals remain unchanged.

Industry's Communication

Your business aims to influence choice to find ways to attract consumers to products and services and to entice them to buy.

That is a perfectly legitimate activity. I am aware that there has been some whispering of late, which has questioned my view of your industry. Some have gone so far as to suggest that recent Commission proposals might somehow damage the industry's role of communicating with citizens.

So allow me to put the record straight. I have no desire or designs to hamper your creativity. That said, the methods that you use and the messages you promote must be fair and must not mislead the public.

At EU level statutory regulation has been in force to promote this aim for a long time in particular the Misleading Advertising Directive, which dates back to 1984.

And self-regulation has been a major feature within that legislative framework to promote the effective application of the principle of fairness in practice.

New needs for Industry and Consumers

However, just as the market moves on, so regulation has to move on.

Our analyses have shown that the existing regulatory framework is not doing enough to facilitate legitimate advertising across borders of the Member States. Nor is it sufficient to give consumers EU-wide confidence that they will have adequate protection when purchasing goods and services cross borders.

For those reasons, the Commission made a proposal for a directive on unfair commercial practices. This aims to put in place a common, EU-wide framework for protecting consumers against unfair practices, including unfair advertising.

But this proposal aims to work both ways to benefit businesses as well as consumers through allowing for mutual recognition. This will provide regulatory certainty for advertisers, so that you will only have to comply with one set of rules not 15 sets or, from next year, 25.

This aims to free up the internal market, bringing considerable opportunities for cross-border selling. In our surveys, nearly half of businesses cited the need for compliance with different national rules on unfair commercial practices as an important barrier to cross-border advertising.

Common framework also for the food sector

I should also mention the Commission proposal for a new regulation on food claims or more specifically on claims made about the nutritional and health benefits of foods.

In a similar vein to the unfair commercial practices proposal, this aims to ensure that claims about products are properly backed up by solid evidence, and so will not mislead consumers.

Whilst this means tightening up in some areas, it also allows liberalisation in others. And a common framework, making the internal market easier to use. We will soon be following this up with a specific proposal on fortified food products.

These food-related issues have implications for health, as highlighted in a recent research report from the UK Food Standards Agency.

The studies reported include one which showed that exposure to certain adverts reduced children's ability to determine whether certain foods contained real fruit or not. Another found that the more food adverts children saw, the more calorie-laden snacks they consumed.

A proportionate approach

Some might argue that there is a case for more measures in the area of advertising to children.

However, this is a question of balance. These are areas where there are particular risks, but we are not in the same domain here as for tobacco. For tobacco, there is no safe level of consumption. In that one case, a ban on advertising is both justified and necessary.

In the majority of advertising to consumers, the risks are lower and therefore the regulatory response has to be proportionate. Detailed legislation is not always the answer when new problems arise.

Codes of conduct

And here I would like to address the question of the role of codes of conduct in advertising: what do they have to offer, and what do they actually deliver?

First, let me say that advertising codes cannot replace the need for a legislative framework. The presence of a regulatory back-stop gives code-owners the power to promote compliance, and ensures that action can always be taken where potential harm to consumers is identified.

However, effective and properly enforced codes of conduct can, under the right conditions:

  • Help to provide a consensus on how consumers should be treated.

  • Help to ensure that the basic principles are actually achieved in practice, by helping businesses understand how to meet their obligations.

  • React speedily to new market practices, something which is hard to do through the lengthy process of developing detailed legislation.

  • They should also help to ensure that when something does go wrong, it is put right, without the need for lengthy and costly court proceedings.

The important role of self regulation has been recognised in the Unfair Commercial Practices proposal, which explicitly foresees a role for codes in applying the principles contained in the directive.

And the harmonisation achieved by the proposal will allow for much greater convergence between national codes, making cross-border co-operation much easier.

The role of self-regulation

I am aware of the efforts you have embarked on to make self-regulation work and I welcome this. However, a lot remains to be done. If greater reliance is to be placed on self-regulation then substantial further efforts will be required.

First, there are gaps in coverage. The use of codes is much more firmly established in some Member States than in others. Compliance can vary greatly as can the application of effective sanctions when codes are breached.

There is also the question of advertising methods that are particularly hard for code-owners to control. This includes rogue direct marketing or advertisements made on a trader's own website.

There will of course always be cases where rogue traders are determined to break the rules. In those cases, self-regulation can play a part in detecting and reducing the impact of rogue advertising.

Need for proper enforcement

But without proper enforcement back-up from public authorities, and effective co-operation between them to address cross-border cases, rogue practices will continue.

In view of this, the Commission has also proposed a Regulation to reinforce cross-border co-operation and enforcement between public authorities.

So, looking forward, I hope that you will support our efforts to put in place an effective, proportionate regulatory framework that opens up the internal market for legitimate advertising.

A comprehensive system of self regulation throughout the EU would greatly facilitate the job of regulators. It is up to the industry to show that self regulation can have comprehensive coverage and can be made to work.

I also hope you will recognise that our efforts are not designed to hamper or obstruct, but to facilitate the operations of fair trading and fair advertising.

And finally I would like to challenge you to focus your efforts on demonstrating that the advertising industry imposes high standards on itself and that it meets them.

To finish may I congratulate you once again on reaching your half century.

I trust that through your innovation and creativity you will continue to entertain us, as well as to promote and inform.

I wish you every success for the next 50 years.

Thank you.

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