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Rules for Product Placement under German Law

Stefan Engels from legal firm Lovells LLP is the next speaker at Alcatel-Lucent Foundation / HBI 2009. He outlines the new rules for product placement, but begins by outlining again the indepence of publication processes, the protection of informed recipients, the need for neutrality of the media in the free market, as the three key drivers of the separation of advertising and content which is required of all edited media under German law.

New rules from the European Union, in December 2007, and their implementation under German law which is proceeding with current draft legislation and must be completed by the end of 2009, allow the possibility of loosening these separation requirements, but do not require changes.

Product placement (in its legal definition in the German draft) is the overt placement of products for pay or in return for in-kind support; it is different in law from the covert placement of products, therefore. Included here is also the gratis provision of goods or services to programme makers, if these goods are of 'significant' value. But what does significant mean here - significant as a component of the total production costs, or significant as compared to a set value independent of such costs?

Product placement is generally forbidden, except for a number of specific practices: in light entertainment content (though the definition of 'light' here is also problematic), movies, drama series, and sports, but not in children's entertainment, and in the case of the gratis provision of goods or services (but possibly not where such provision is made to the public service broadcasters). How this is implemented (as a self-regulatory approach) also remains problematic.

Key elements here are the need for editorial independence, the prevention of direct purchase advice, and the rules against overly strong advertising. There is a need to identify product placement through programme inserts at the start and end of a broadcast, and after advertising breaks. The exception here is foreign (e.g. US-produced) content - which in turn creates a problem as this poses different rules for domestic and international material, even in spite of the underlying intention to ensure an informed audience. Stefan argues strongly, then, for the creation of universal rules, rather than the presence of a number of rules which cover different forms of programming and advertising.

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