WRITTEN QUESTION E-0385/00

by Nelly Maes (Verts/ALE) to the Commission

(15 February 2000)

Subject: Anti-advertising chip in televisions

Some televisions nowadays have an electronic chip which automatically allows advertisements to be eliminated and alternative pictures shown. The technology is comparable to that of the chip in a radio which provides traffic news. The advantage to consumers is that they can avoid seeing advertisements. Advertisers will have a motivated audience. The alternative to advertising could be funded by gradually reducing the tax deductibility of advertising costs.

Activating the chip requires a change in legislation so that it would be obligatory to emit a signal when an advertisement starts. Rules are also needed on offering an alternative.

Hence, there is a need for European rules making the chip compulsory for all televisions that are placed on the market.

Can the Commission say whether European rules making it compulsory to fit a chip are feasible and desirable?

What initiatives will the Commission take to introduce such rules?

Answer given by Mr Bolkestein on behalf of the Commission

(31 March 2000)

The Honourable Member refers to the new technical possibility of allowing viewers to replace television (TV) commercials with substitute pictures. This approach would require the insertion of an appropriate chip in television receivers to detect advertising. The Commission understands that no system has yet been defined to undertake this task, although certain technical elements of the radio data system might provide a technical basis for such a capability in radio.

The Honourable Member considers that on the one hand, this capability would be of interest to viewers wishing to avoid advertising and on the other, to advertisers interested in reaching only those consumers who are receptive to their commercial communications. The Honourable Member suggests that the replacement pictures could be financed by progressive reduction in the tax deductibility associated with advertising expenditure. The Honourable Member believes that a change in law would be required to allow for such signals to be transmitted by broadcasters and furthermore to ensure that the required infrastructure be put in place to allow for these replacement broadcasts. The Honourable Member therefore asks the Commission whether it believes it to be desirable to legislate for the insertion of these chips in televisions to be made mandatory.

First, the Commission sees the usefulness of this technical concept for consumers who do not wish to receive TV advertising. It also agrees that advertisers prefer to target those consumers who are most amenable to advertising. It would therefore seem that this concept should be of interest to both TV viewers and advertisers and that there would therefore be a market for it. In the event that such an innovation would be a viable proposition for any TV manufacturer, the Commission does not therefore see any reason to legislate in this area. One should also consider that broadcasting technology is changing. The introduction of digital television will make possible new forms of advertising, but also give consumers more control, thanks to interactivity. Any system developed for analogue television risks obsolescence.

Secondly, it is clear that commercial TV broadcasters whose sole source of funding is the sale of advertising and sponsorship time, would as a consequence of the spread of this technology, have to respond by either changing their existing media sales rates or consider charging consumers for this premium, advertising clear service. The Commission, again, does not believe that legislation is necessary to force them to offer such a service that has a clear value-added to viewers and advertisers.

Finally, the Commission does not believe that the Honourable Member's suggestion of decreasing tax deductibility on advertising expenditures would be of assistance in this matter. On the contrary, this would further reduce the demand for advertising space by advertisers which in turn would put further pressure on commercial TV broadcasters and thus worsen their chances of developing an appropriate funding method for diffusing such an interesting technology. In addition, at the present stage the Commission sees no prospects of the adoption of Community rules, which would in fact amount to partial harmonisation of national legislation concerning deductibility on advertising expenditures for direct tax purposes.