20.09.2021
In Austria, since the Media Act came into force, Section 26 of the Media Act has required paid publications to be marked. If it cannot be ruled out (due to its design and arrangement) that an “advertisement” is (paid) advertising, it must be made clear that the advertisement is paid by using the words “paid insertion”, “advertisement”, “advertisement” (or similar). The legislator wants to use this to prevent covert advertising and avoid practices that are unfortunately not foreign to everyday journalistic and editorial work. Readers should not be deceived about the paid nature of the article, as an objective, editorial article has a completely different weight to advertising, where the recipient does not expect objectivity. In other words: paid reporting must be marked unless it is completely clear that it is advertising (and not carefully researched articles). In addition to being inadmissible under competition law (Section 1 of the Unfair Competition Act in conjunction with Section 26 of the Media Act), a violation of this labeling obligation also constitutes an administrative offence, which is punishable under Section 27 of the Media Act with fines of up to €20,000.00.
The European Court of Justice (“ECJ”) has now issued a ruling on the parallel provision of a Union law provision. Directive 2005/29/EC concerning unfair business-to-consumer commercial practices in the internal market (UCP Directive) was implemented with the 2007 amendment to the UWG. The offence in Annex I in item 11 sentence 1 of this directive consists in the misleading commercial practice in which editorial content in the media is used for sales promotion purposes and the trader has paid for this sales promotion without this being clearly evident from the content or from images that are clearly recognizable to the consumer (advertising disguised as information). Since then, advertising disguised as information has been considered per se prohibited within the meaning of Section 2 Paragraph 2 of the UWG.
In the original dispute before the ECJ, two regional Peek & Cloppenburg companies were facing each other, P&C Düsseldorf and P&C Hamburg. A nationwide advertising campaign was carried out in the fashion magazine Grazia, inviting people to an after-work shopping experience. P&C Düsseldorf contributed to the costs of this advertising campaign and provided Grazia with the images used. The sales evenings were organized jointly with Grazia, and the costs were borne jointly by P&C Düsseldorf and Grazia. The question was whether the joint bearing of costs on the one hand and the free transfer of usage rights to image material on the other were sufficient to constitute the characteristic of "remuneration".
In its decision, the ECJ first clarified that a breach of the prohibition of surreptitious advertising can be punished by a consumer as well as pursued by a competitor (as happened here) by means of a lawsuit. The ECJ also clarified (this in the sense of its broad definition of "commercial practice") that a joint sales event "with the promotion, sale or supply of products and services to consumers' and therefore falls within the scope of the UCPD. He also pointed out that the commercial practices in Annex 1 of the UCPD should be considered unfair under all circumstances. These commercial practices are therefore inadmissible, regardless of whether an assessment of the individual case is relevant - they must be avoided in any case.
The ECJ referred to its previous case law, according to which the UCP Directive has a particularly broad material scope of application, thus ensuring a high level of protection for consumers against unfair commercial practices. Above all, the different levels of information and the imbalance in information competence justify a consumer-friendly case law.
The ECJ then concluded that the free provision of copyrighted photographs can already constitute direct payment for the respective publication if the images show the premises and the products offered by the trader as part of the relevant advertising campaign. The provision of advertising photos has a monetary value and serves to promote the sale of the trader's products. In summary, the ECJ has therefore shown a very broad understanding of the prohibition of surreptitious advertising.
In the context of media cooperation, it must therefore be ensured that the provision of copyrighted material of “monetary value” can already constitute the remuneration that leads to the obligation to label this paid reporting (which must be done in an unambiguous manner).