EUROPEAN AD RULES PULLING UNION IN MANY DIRECTIONS;EACH COUNTRY TRIES TO PROTECT ITS OWN LAWS

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[brussels] European politicians will make decisions in the next year that will either further unify 15 countries into a single market or bury the pan-European market under a mountain of red tape.

Advertising "lobbyists have their toughest battles ahead of them," said Peter Waterman, VP-corporate affairs for toy marketer Hasbro.

The ad industry has both friends and foes. One well-placed friend is the internal market directorate, called DG 15, within the European Union's highest executive body, the European Commission.

That office has drafted a green paper, or consultation document, which if approved would require rewriting of numerous national laws that currently restrict cross-border marketing.

France's Loi Evin outlawing all tobacco and alcohol advertising; the U.K.'s and Denmark's tight broadcast sponsorship rules; a Greek toy ad ban; and Sweden's outright ban on ads aimed at children will be among the first to be considered.

Three-and-a-half years after starting the green paper, DG 15 concluded this summer that regulatory differences between countries are hampering progress toward a single European market for commercial communications. The ad industry has been asked to give its views on the green paper by Oct. 30 and the European Parliament and the Council of Ministers, made up of government ministers from each member country, are expected to comment on it by yearend. Both groups must approve the green paper for it to become a directive and, eventually, a law.

The European Parliament, rarely a friend to advertising, has been busy updating another major piece of EU legislation, the 1989 TV Without Frontiers broadcasting directive. In one move, the European Parliament voted last February to tighten up a quota requiring 50% TV programming be produced in Europe-and claimed the same quota should apply to all new media and teleshopping.

"I'm optimistic about the outcome of the TV Without Frontiers directive," said Peter Mitchell, director of strategic affairs for Guinness. "Once that is out of the way we can turn our attention to the more crucial issue of the commercial communications green paper."

The information superhighway is sparking its own measures. EU officials announced a plan in July to encourage commercial development of new media in Europe. Besides trying to stop the anti-advertising European Parliament from throwing new media into the revised TV Without Frontiers directive, the Commission wants member countries to refer new rules governing new media to the EU before passing national laws.

In another hot issue, the protection of children has become an obsession in some European countries. Sweden, insisting ads aimed at kids exploit and damage them, has fought to uphold an outright ban.

However, in September the advocate general of the European Court of Justice concluded after months of deliberation that Sweden couldn't impose its ban on advertising to children on foreign-based TV channels. If the full court's ruling before the end of the year supports the advocate general, as is usual, the case will set a welcome precedent for cross-border marketers who are barred from advertising in certain markets.

Greece keeps defending its ban on toy advertising even though it is "blatantly clear" the measure is pure protectionism, according to Hasbro's Mr. Waterman. International toy companies claim their Greek sales have fallen 40% since the law passed two years ago.

The European Commission has stalled on whether to embarrass Greece with a warning that its toy ad ban breaches EU law, despite a formal letter of complaint that international toy marketers sent the Commission's competition directorate almost two years ago.

Their indecision illustrates divisions within the Commission along national lines over the issue of protecting children. Sweden, Greece, Spain, Belgium and Ireland all want tougher rules on advertising to children.

Another issue that continues to simmer is a proposed directive calling for a total ban on tobacco advertising in Europe. For the last five years, it has been blocked by a steadfast group of countries including Denmark, Germany and the U.K.

Some countries are acting on their own. This month Belgium introduces a blanket ban on tobacco advertising, including ads in imported magazines.

"Belgium is the first country to try to go this far," said Louis Croonen, VP of the European Magazine Publishers Federation. "This is a flagrant violation of European free trade rules and of the principle of free speech."

Privacy is also an issue dear to European hearts. It became a stumbling block for trans-Atlantic list collectors and brokers following a recent decision by a majority of national European data registrars to prohibit making the lists available to U.S. direct marketers.

The data registrars from each European government "could make things very difficult for American companies here," said Alastair Tempest, director general of FEDIM, the Brussels-based direct marketing federation.

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