Nineteen months after publication of the first draft and following six months of inaction, an amended version of the proposed EU Sales Promotion Regulation has appeared.
Topic: Promotion Marketing
Who: The European Commission
When: April 2003
Where: Brussels
What happened:
A second draft of the proposed EU Sales Promotion Regulations regulation ("SPR") has been published by the European Commission. As previously reported on marketinglaw.co.uk, the SPR is a bold step by the European Commission to harmonise, at a stroke, the rules affecting various different types of promotion marketing across all of the European Union Member States.
This is not another piece of Brussels nannying legislation, but a positive step towards pan European promotion law harmony which marketinglaw fully supports.
The first version of the SPR, published back in October 2001, contains a number of sensible provisions including a suggested set of requirements for prize promotion rules throughout the European Union. There are also rules which would make it difficult for member states such as France and Spain to continue with their requirements that prize promotions are pre-registered with a stipulated authority, and rules to liberalise restrictions that currently exist in a number of EU Member States in respect of marketing tools such as "buy one get one free".
The SPR has encountered heavy weather, in large part because it is running in parallel with another consumer protection measure introduced by a different directorate general of the European Commission in the form of the proposed "Framework directive on fair trading."
There were concerns as to inconsistencies between these two measures and by the autumn of 2002 meaningful discussions on the SPR seemed to have ground to a halt.
Now, in an apparent effort to revive interest in the SPR, an "amended proposal" for the SPR has been published. This helpfully marks up the changes from the previous version.
This is available in full at
www.europa.eu.int/comm/internal_market/comcom/new/index_en.htm
Some of the amendments have caused concern.
For instance, it is now suggested that for "promotional games", (defined as any prize promotion where winning a prize depends to some extent on chance), the total value of all prizes offered in any single promotional game cannot be more than €100,000.
No such value limit appears to be suggested for "promotional contests", which are defined as any event in which success is determined "exclusively" by use of skill.
Another "compromise" proposal designed to bring debates to an end is that participation in promotional games must not be linked to a purchase, and there must also be no additional participation costs. This is worrying on two counts. First, "no additional cost" seems to conflict with the UK convention hence, where a nominal entry cost such as the price of an ordinary first class stamp will be disregarded and will not stop an event being free entry. Second, it cuts across the current debate over reforms to UK prize promotion laws in which serious consideration is being given to allowing purchase to enter prize draws.
Another passage in the amended SPR which has caused controversy is a proposed provision that a promoter operating a sales promotion shall not collect personal data from a child. (Child being defined elsewhere as "an actual person under the age of 14 years"). Although this particular provision was in the original SPR, there are certainly grounds for concern at its inclusion. This is because it effectively prevents businesses from asking children for their parents' contact details in order to get their consent to market to the child.
Also in the area of marketing to children, the compromise text now prohibits the supplying of free gifts, premiums or prizes to children which are capable of injuring either their psychological, as well as their physical health.
As regards required disclosures of information in relation to certain promotions, the original version of the SPR appeared to require that much of it needed to be contained in each and every communication to the punter which related in any way to the promotion. Following protests from quarters such as the mobile marketing industry, where they have to live with a character limit of 160, amended compromise wording now indicates that it will be sufficient to give some of the disclosures by way of making the relevant information available to the recipient without the recipient having to ask for it, for instance on a website.
The relevant disclosures include the price of the promoted goods or services, the promoter's name and address and any out of court dispute settlements system or code of conduct that the promoter subscribes to, as well as the exact amount of any discount that is part of the promotion and the immediately preceding price of the relevant product, the commercial value of any free gift and any costs associated with obtaining it. Each communication will also have to include the quantity or duration of an offer and an indication of where terms and conditions relevant to the promotion can be obtained.
In this context, the need to specify an end date for the promotion is obviously commercially sensitive and is still under active discussion.
Why this matters:
It is good that this initiative has rekindled interest in this potentially important instrument. However, aside from the issues of concern pointed out above, it is quite clear that there is still active debate on issues such as the suggested need to include the "commercial value" of a prize in the disclosures in relation to a prize promotion (on grounds of ambiguity amongst others) and the requirement for free entry for "promotional games", where newspaper and magazine publishers are pressing for a specific exclusion.
There is also continuing concern over the number of different minimum ages that apply to various marketing activities involving minors. The SPR appears to regard a child proper as anyone under 14, whilst the UK's CAP code, for instance, defines a child as anyone under 16, and the IC talks of parental consent being needed to process data of under 12s.
It is to be hoped that all these continuing areas of difference can be resolved by the member states so that the vaunted entry into force date for the SPR of 1 January 2005 can be achieved.
