Product placement on the Internet plays a role in almost every YouTube channel. In Germany, these have quite a few million subscribers. With such a large reach, Youtube is thus also a popular platform for advertising for businesses and retailers. This raises the question of the extent to which advertising through product placement in Internet videos is permissible. Products are often advertised, tested or raffled. Do they need to be labeled in the context of online videos? This paper will discuss the current legal requirements.
Obligation to label advertising
As a general rule, advertising and editorial content must be recognizably separated. This principle of separation is intended to enable the consumer to build up the necessary distance. A consumer is more critical of an advertising contribution than of an editorial contribution. For this to happen, however, it must be recognizable in the first place that it is advertising. When this principle applies is regulated in various laws. The following three laws play a role for Internet videos: the Telemedia Act (TMG), the Unfair Competition Act (UWG) and the Interstate Broadcasting Treaty (RStV).
The first applicable law is the Telemedia Act. Internet platforms such as YouTube are subject to this law as telemedia. Section 6 TMG states that
“commercial communication must be clearly recognizable as such”
must. Commercial communication in this case means advertising, which also includes product placements.
Unfair Competition Act (UWG)
The UWG stipulates that the
“commercial purpose of a commercial act must be made known”,
unless it is directly apparent from the circumstances, Section 5a (6) UWG. This applies in general to business actions, i.e. also to YouTube videos, provided they are intended to promote the sale of goods/services. Therefore, if a video serves such a promotional purpose, this must not be disguised.
Interstate Broadcasting Treaty
The provisions of the Interstate Broadcasting Treaty are even more far-reaching. However, Internet platforms are not broadcasting. However, the Interstate Broadcasting Treaty contains a provision according to which the regulations on advertising principles also apply to certain telemedia, Section 58 (3) RStV. It has not yet been clarified in case law whether Internet videos fall under this. However, if one looks at the wording of the provision, this conclusion is obvious. It states that on-demand audiovisual media services are
“Telemedia with content that is similar in form and content to television and that is provided by a provider for individual retrieval at a time selected by the user and from a content catalog defined by the provider.”
The only disputed feature in this definition is whether the form and content are similar to television. This is neither clearly defined by the legislator, nor is there any clarifying case law on this to date. However, television has already lost many viewers to the new telemedia. The state media authorities are therefore also of the opinion that there is a similarity to television, at least if the channels have a large reach. There is a clear tendency for Internet platforms such as YouTube to be classified as television-like. However, a final clarification of the issue remains to be seen.
Surreptitious advertising and product placement on the Internet
The term surreptitious advertising is defined in the law (§ 2 No. 8 Interstate Broadcasting Treaty). Accordingly, this is the
“Mention or representation of goods, services, names, brands or activities of a producer of goods or a provider of services in broadcasts if it is intentionally provided by the broadcaster for advertising purposes and, in the absence of labeling, may mislead the general public as to the actual purpose of such mention or representation. In particular, a mention or representation is deemed to be intended for advertising purposes if it is made in return for payment or similar consideration.”
Product placement on the Internet is defined similarly in accordance with Section 2 No. 11 RStV, with the difference that the mention or representation is specifically identified here (which is precisely not the case with surreptitious advertising). Providing the goods/services free of charge is also product placement if the item is of significant value. According to the Advertising Guidelines for Television, an item is generally of significant value if it exceeds € 1,000.00.
If we now assume that YouTube videos fall under the classification of the Interstate Broadcasting Treaty, restrictions regarding advertising pursuant to Section 7 RStV also apply to them. This means that surreptitious advertising is always inadmissible there. Product placements are only prohibited in principle, but there are also defined exceptions to this principle, namely if there is proper labeling.
Children’s, advice and consumer programs: no product placement allowed
Programs for children are explicitly excluded from the exceptions. Product placements are always prohibited here as well. The same applies to advice and consumer programs. This can be explained by the fact that mandatory labeling of children does not necessarily help to create the necessary distance. They overlook the markings more easily or cannot classify them. The term child is not defined in the Interstate Broadcasting Treaty and different regulations can be found in other laws. In principle, an age of less than 15 years seems appropriate here. Often, a video or channel cannot be precisely assigned to a specific age group. However, in the case of the popular channels dealing with make-up and lifestyle, it can probably be assumed that many viewers fall into the children’s age group. This means that product placements in such videos would never be permissible. The same applies to videos in which products are presented and tested. They can probably be classified as advice and consumer programs.
The correct labeling of product placement
If product placement is to be permitted on the Internet, however, the question remains as to what the necessary labeling should look like. The advertising guidelines of the state media authorities for television provide a hint. There it is stated that a product placement is then appropriately marked,
“if it contains the abbreviation “P” as a cross-broadcast logo for product placements for at least 3 seconds at the beginning and end of a program and when it continues after a commercial break.”
This logo should be accompanied by a supplementary note such as.
“Supported by product placements”
to add. If these requirements are met, it is a sufficient labeling of the product placement.
The principle of separation of editorial content and advertising also applies to Internet videos. Surreptitious advertising is always inadmissible. Product placement on the Internet may be permissible. Assuming the applicability of the Interstate Broadcasting Treaty, product placements in children’s programs as well as advice and consumer programs are never permissible. Permitted product placements must be properly labeled (“P”).
Of course, the producer of a video remains allowed to test, rate or give away products. If he does this on his own initiative and without consideration, it is always permissible editorial content. However, he may not be provided with the products above the limit (at least € 1,000) free of charge or even receive money for them.
The contents of this article were published as a guest article in the print edition of HORIZONT.
If you have any questions or need advice regarding advertising and product placement in Internet videos, please call us at 0221–4201074, send us an e‑mail at email@example.com or make an appointment with our office.