In the coalition agreement, leaders proposed outlawing quick loan and gambling advertising, but the draft amendment to the Advertising Act fails to include this proposal. However, the possibility of transferring some of the supervision to companies themselves is being considered.
The Ministry of Economic Affairs and Communications has been working on an amendment to the Advertising Act for several years, with the goal of clarifying what advertising is and who is responsible for enforcing the rules.
Merike Koppel, the chief of the ministry’s business environment department, said that there are so many grey areas in today’s law that the Consumer Protection and Technical Regulatory Authority (TTJA) must explain to companies what they can and cannot do 400 times per year.
“The most important thing we would like to see change is for advertising to comply with the law. Today we see many infringements,” she said.
Last year, the office opened 63 infringement proceedings, 20 of which related to gambling advertising and 23 to advertising financial services.
Last spring’s coalition agreement includes a pledge to ban gambling and quick loan advertising, but no such amendment is to be found in the draft published on Thursday. Koppel said the matter still needs to be analyzed.
“If we say that, in fact, the purpose of this point in the coalition agreement is to prevent people getting increasingly into debt, the feeling today is that the bans are not serving this purpose,” she said.
According to Koppel, gambling advertising is already heavily regulated. “But the problem is that the law is not obeyed, the rules are not followed. And the monitoring doesn’t always reach the advertising as quickly as it should.”
The office has one and a half positions for the supervision of advertising law. According to the ministry, clearer rules would be of great help. For example, it is still not entirely clear where the line is between gambling advertising and gambling operator’s advertising. A consumer may see a very similar sports betting logo, but in one context it is allowed to be displayed, while in another it is not.
“There are certainly places in the law that we can regulate better. To see if this display of trademarks could be regulated in a different way, if there could be some kind of restrictions in that regard. These are the solutions that we will now try to find,” she said.
The ministry said that it is questionable how much the ban on advertising contributes to debt avoidance. The bill therefore proposes that a research-based study be carried out to assess the impact of advertising.
“A ban on advertising may reduce the incentive to provide the service in Estonia, which means that the activity, along with the taxes collected by the state, will move elsewhere. The state loses tax revenue from both advertising and business-related income. In addition, there is a risk that illegal operators will appear on the market, increasing the so-called black market,” the document states.
“Of course, there are different possible solutions in the draft, but if the political side, i.e. the government, thinks that the safest way is to ban it, then that is what will happen,” Koppel emphasized. “But as officials, I think, we also have the ability and responsibility to provide alternative solutions.”
The marketing industry wants to self-regulate
The Estonian Marketing Association believes that self-regulation would help solve many of the problems in the advertising industry. The Ministry of Economic Affairs and Communications also suggests the creation of a separate foundation that would take over some of the supervision as one of the possible solutions.
“The idea is that by the time it reaches the national level, they would have already caught most of the infringements,” Kristina Jerjomina, legal adviser at the ministry’s entrepreneurship department, explained.
She said, however, that self-regulation could be used up to the point of general contours, while foundation would provide more precise regulations.
“Such foundation would include not only companies, but a wide range of actors, so more precise and stricter rules would make sense,” Jerjomina explained. “So the law would catch only those not subject to self-regulation [via the foundation].”
The foundation would be able to both fine and blacklist companies but these guidelines would apply only to those who have joined the foundation. Others would be still regulated by a broad statute.
Koppel emphasized that this merely one of the options under consideration, no decision or choice has been made yet.
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