The 1993 Loi Sapin1 pertaining to the prevention of corruption and transparency in the economical life and public proceedings significantly modified the rules and regulations pertaining to advertising space brokerage in France. It sets the principle that advertising space purchase may only be made by an intermediary acting on behalf of an advertiser and pursuant to a written contract.
The material scope of the Loi Sapin has been extended by the Loi Macron dated August 6, 2015, to include within its scope of application the purchase of advertising spaces “whatever the medium” so that digital ad services are now clearly covered by the Loi Sapin. The Loi Macron also provides that, where digital ads are concerned, specific duties (in particular reports to the advertisers) must be complied with.
A Decree has recently been enacted in order to detail the duties to be fulfilled by the intermediary acting in the field of the purchase of digital ads.
1. Territorial scope of the Loi Sapin
The Loi Sapin is enforceable whatever the place where the intermediary is established where “the advertising message is made to the benefit of a French company and it is mainly received on the French territory”.
Consequently, two cumulative conditions must be met: a French advertiser and an ad “mainly received” on the French territory.
2. Transparency obligations as set by the Loi Sapin (overview)
The Loi Sapin does provide for several obligations, to be complied with, in particular by the ad agency, acting as an intermediary between the media (seller of advertising spaces / the “support”) and the client/advertiser.
As a general rule, the intermediary is not entitled to receive any payment from the support; indeed the intermediary is entitled to receive a payment only from the advertiser; this with the aim of having the remuneration of the intermediary negotiated only between the intermediary and its client, the advertiser.
This does not prevent the support from offering rebates on the purchases made by the intermediary, but any rebate or advantage allocated by the support must benefit to the advertiser2 and be mentioned on the invoice issued to the advertiser by the support.
The invoice to be issued by the support must set forth the rebates allocated in connection with the purchase of the advertising spaces; this invoice being sent to the advertiser.
Further, the intermediary (ad agency) must inform the advertiser of any relationship between this intermediary and the support.
As a result, the client (advertiser) should be informed of any agreement concluded between the support and this intermediary which is related (even indirectly) to the purchase of advertising spaces made to the benefit of its client (advertiser).
Finally, when the purchase of advertising spaces is made through an intermediary, the support must report to the intermediary, and the intermediary must report to the advertiser, on the conditions under which the purchase of advertising spaces has been carried out (Section 23 of the Loi Sapin).
Please note that the aforementioned Loi Macron has added, to Section 23 of the Loi Sapin, a reference to the fact that, where digital ads are concerned, specific duties (in particular reports to the advertisers) must be complied with.
3. What’s new in France ? A Decree enacted in February 2017 and setting the duties to be complied with by the seller of online advertising spaces to the benefit of the advertiser
A Decree dated February 9, 2017, entering into effect on January 1, 2018, has been enacted in order to provide for detailed information pertaining to the report that must be drawn by the seller of advertising spaces to the advertiser.
Section 2 of this Decree provides that this report must specify (i) the date, (ii) the position/place where the ad will be broadcast, (iii) the total price of the campaign, as well as (iv) the unit price of the advertising spaces that are invoiced (this rule does not apply to digital ad campaigns based on real-time purchase of spaces which are not guaranteed, in particular thanks to auction mechanisms).
Section 3 of this Decree is dedicated to real-time purchase mechanisms and lists the information that must, at least, be included in the report to be drawn by the seller of the advertising spaces to the advertiser and which aim at (non-exhaustive list):
Section 4 of this Decree states that the Decree does not apply to the sellers of advertising spaces established in another EU State, or which are part of the European Economic Area, when they are submitted, by the law of this State, to equivalent reporting obligations.
1 Loi n°93-122 dated January 29, 1993.
2 While negotiating their contractual relationships, the intermediary and the advertiser are entitled to decide that the rebates allocated by the media/support will benefit, in whole or in part, to the intermediary.