1.        Peculiarities of advertisements on the Internet 

According to explanations of the Russian Federal Antitrust Service (the FAS), information on produced and sold products published on a manufacturer’s or retailer’s web site or on its page in a social network is not advertising. The information on sales and special offers published on special sites giving an opportunity to obtain a discount coupon are likewise not deemed to be advertisement. 

However, if the published information is not aimed at informing the consumer about goods assortment or the company’s operations, but rather at drawing attention to a particular item or at singling it out among similar goods (e.g. by using a pop-up banner), such information can be deemed an advertisement. 

At the same time, the information presented by search engines (such as Google, Yandex, etc.) based on a user’s request is not advertisement, since the aim of disseminating such information is to provide a direct search result. However, if on the web page a user is provided information by means of context technologies, such information would be treated as advertising.

 2.        Peculiarities tied to assessment of mass media products as to their conformity with the concept of a national product 

According to advertising law requirements, advertisements on paid TV channels and on channels that use decoders are not allowed.[1] An exception is made for TV channels whose broadcasting content is comprised of at least 75% national mass media products. 

Information content is regarded as a national product if it meets the following criteria: 

• It is produced in Russian or in other languages of peoples of the Russian Federation or in a foreign language (in the event the product is intended for the Russian mass media);
• It is produced by citizens of the Russian Federation and/or by organizations duly registered in the Russian Federation and/or on request of Russian mass media;
• Russian investments into its production constitute no less than 50%. 

Mass media products created in accordance with international agreements of the Russian Federation also fall into the category of national products. 

At the same time, the antitrust authority performs assessment of mass media products for rating them as a national product only as part of planned and unplanned inspections. 

In other words, in the event the antitrust authority receives a complaint on distribution of advertisement on TV channels where it is prohibited (or in the event FAS staff revealed signs of violation), the antitrust service must carry out an inspection in order to find out the percentage of national mass media product in the broadcasting content of such TV channel. 

At the same time, the procedure for determining the scope of national mass media product implies identifying its portion in the broadcasting based on to the actual broadcasting throughout a 24-hour period. Particular dates or a period of several days can be established for the assessment timeframe, but assessment of broadcasting volume of the national mass media products is to be performed for each date. 

Consequently, if in the course of inspection the antitrust authority reveals advertising on television where national mass media products constitute less than 75% of the broadcast time, this fact will serve as grounds for liability in accordance with the advertising law. 

3.        Advertisement-relatedinspectionsin 2016-2018

We should note that starting from January 1, 2016 and until December 31, 2018, scheduled inspections of state authorities, including in the area of advertising law, will not be performed in relation to small businesses.^[2] 

According to explanations of the FAS, if a small business entity is included into an inspection plan and the inspection has started in spite of the ban, such entity is subject to exclusion from the plan, and the inspection is to be ceased.

 _________________________

[1] Part 1 Article 14 of Federal Law No.38-FZ “On advertising” dated 13.03.2006

^[2]Part 1 Article 26.1 of Federal Law No. 294-FZ “On protection of rights of legal entities and individual entrepreneurs in the course of state and municipal supervision” dated 26.12.2008

Irina Akimova  Of Counsel  Head of Antitrust Practice                              Moscow   iakimova@cls.ru  Tel.: +7 (495) 970 1090

Dmitry Gavrilenko   Associate                  Moscow       Tel.: +7 (495) 970 1090

Additional notes

Should any questions arise in connection with the above or if you need any additional materials, please contact Irina Akimova or Dmitry Gavrilenko, Moscow Office of Capital Legal Services.

This Information letter keeps the clients of Capital Legal Services and other interested parties abreast of information that may, to any extent, affect their activity or cater to their particular interests. The opinions and commentaries expressed in this information letter shall not be deemed as legal opinions and do not cancel the need to obtain legal advice or legal opinion on separate issues.