The Sapin Decree On Digital Advertising Services Has Come Into Force. It Nevertheless Raises Several Questions Regarding Its Implementation.

Author:Mr Daniel Kadar, Douglas J. Wood and Ron Shalit
Profession:Reed Smith (Worldwide)
 
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The much-awaited Decree No. 2017-159 of February 9, 2017 on digital advertising services (the "Sapin Decree") has entered into force as of January 1, 2018.

This Decree adapts the rules of the French Sapin law of January 29, 1993 - originally introduced for traditional media, i.e. television, radio and press - to digital media and constitutes a clear step forward in terms of transparency in the digital advertising sector. Its impact will be particularly felt in the interpretation and enforcement of audit clauses in advertiser/media agency agreements requiring transparency across all media platforms.

However, the conditions of implementation of the Sapin Decree raise some unanswered questions in practice that the French Competition Authority has asked the government to clarify.

Background

The French digital media market was estimated at more than 4 billion euros in 2017, and has therefore become the leading advertising media, ahead of television advertising. The magnitude of abusive practices in this sector have led the French legislator to take over and to extend the scope of the Sapin law to digital media (Macron law No. 2015-990 of August 6, 2015). While not behind the change, the 2016 K2 Intelligence report commissioned by the U.S. Association of National Advertisers on media transparency cited a variety of non-transparent transactions in media buying that will no longer be shielded from discovery under the new law.

18 months later, the government adopted the Sapin Decree in order to define the contours of the principle of transparency, which is now applicable to transactions in the digital media market.

The adoption of the Sapin Decree was much-awaited by French advertisers. It extends the French legislator's fight against the opaque pricing practices to the various intermediaries providing online advertising services.

Merits of the new regulations

With the recent entry into force of the Sapin Decree, sellers of advertising space established in France - as well as those established in another EU or EEA Member State, insofar they are not subject to similar obligations, are now subject to a reporting obligation towards advertisers on the global campaign price and on the unitary price of each advertising space, including the date and place of diffusion of the advertisements. This new requirement includes any heretofore undisclosed rebates or other incentives received by media buying agencies that have previously not been disclosed to...

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