What is the impact of Brexit in the Advertising, Market and Media sectors?
17 August 2021
Broadly speaking, Brexit does not have any major immediate effect on the way that regulators such as the Advertising Standards Authority, Ofcom and the Competition & Markets Authority operate in these sectors. Regulators will still cooperate with European regulators but not to the same extent.
The UK formally left the EU on 31 January 2020 but was subject to a transitional (implementation) period until 31 December 2020. Therefore, the full effects of Brexit only took effect from 1 January 2021, with the Christmas Eve trade and cooperation agreement between the UK and EU in force.
The impact of Brexit in the Advertising, Market & Media sectors is limited in the short to medium term because:
- To a major extent the relevant EU law has been incorporated directly into UK statutes and regulatory codes, which will not be affected by Brexit, and the government has not indicated any immediate plans to make changes at the end of the transition period, although it does intend to make the laws regulating promotions and advertising foods high in fat, sugar and salt stricter with effect from October 2022 and January 2023 as part of its obesity strategy
- Action: For UK-based broadcasters, however, there are two areas in which helpful EU ‘country-of-origin’ principles are no longer available: see the ‘Regulation of Broadcasting & VoD’ below for further details
- The UK has already had to implement the changes required by last year’srevisions to the Audio-visual Media Services Directive as the obligation took effect during the transition period
Regulation of Broadcasting & Video-on-Demand
- The EU Audio-visual Media Services Directive establishes a ‘country-of-origin principle’ which allows media service providers to comply only with the law and regulatory requirements in the EU Member State of origin of the service, rather than with all of the laws/requirements in every Member State in which the service is received
- A similar ‘country-of-origin’ principle applies to copyright clearance for satellite broadcasting
- The EU ‘country-of-origin’ approach no longer applied to UK-originated audio-visual media services from the end of the transition period, but continued to apply until that date
- UK broadcasters may still be able to take advantage of the EU ‘country-of-origin’ approach if they can show that they are also ‘established’ in an EU Member State: this depends upon various factors including: location of head office; where editorial decisions are taken; where a significant proportion of the workforce are based
What are the key changes and what actions can be taken?
- UK-originated services now, in theory, have to comply with the law and regulatory requirements of each EU Member State in which the service is received (in addition to registration with Ofcom and compliance with UK rules such as the Ofcom Broadcasting Code)
- However, in respect of broadcasts (but not video-on-demand) there is a separate Convention (European Convention on Transfrontier Television that provides similar reciprocal arrangements for 20 EU Member States, but not for Belgium, Denmark, Greece, Ireland, Luxembourg, Netherlands & Sweden (although the UK will allow broadcasts from Ireland to continue, to comply with requirements under the Good Friday agreement)
- Action: For VoD services, and for broadcasts to the seven countries listed above, separate licensing (in addition to that by Ofcom) and regulatory compliance activity has been required since the end of the transition period; but it may equally be possible to demonstrate an established EU base from which broadcasts will continue to receive the benefit of the ‘one-stop shop’
- Satellite broadcasting ‘country-of-origin principle’, sometimes also called the ‘one-stop shop’ – since the end of 2020, broadcasters based in the UK have no longer benefited from the EU-only rules that mean copyright clearance only needs to be undertaken in the Member State from which satellite/cable signals are introduced
- Actions: UK-based broadcasters providing services to EU customers may now need to clear rights separately in each Member State that their signal reaches; but it may be possible to establish an EU base from which broadcasts will continue to receive the benefit of the ‘country-of-origin principle’ or ‘one-stop shop’
- Actions: audio-visual service providers should review the revised Directive for its potential impact; the changes are particularly important for Video Sharing Platforms, which are brought within the Directive’s net for the first time, but there are also noteworthy changes to other areas such as advertising scheduling. Ofcom has produced guidance on these areas.
Northern Ireland Protocol
The Protocol on Ireland/Northern Ireland, commonly known as the Northern Ireland Protocol (the Protocol) is part of the wider EU-UK Withdrawal Agreement signed on 24 January 2020, and is due to take effect at the end of the transition period. It is designed to avoid any need for a border on the island of Ireland. Under the Protocol, Northern Ireland will be obliged to align with specific EU rules, including those in areas such as technical regulation of goods such as food and medicines, so new legislative changes such as the Medicines and Medical Devices Act 2021 cover such rules, which may affect advertising claims in future.
The UK left the EU at 11pm (UK time) on 31 January 2020, and the transition period came to an end on 31 December 2020. The Trade and Cooperation Agreement reached on Christmas Eve 2020 sets out the shape of the ongoing future relationship between the UK and the EU and provides some degree of certainty for UK businesses.