Gowling WLG (International) Inc - Russia
The advertising market, like many others, has been significantly affected by the covid-19 pandemic and the resulting financial fallout. The Russian Ministry of Digital Development, Communications and Mass Communications (MinComSvyaz) has forecast that the Russian advertising market could shrink by between 25% and 30% by the end of 2020.
Deputy Minister Alexey Volin addressed this issue at a meeting of the State Duma Committee on Information Policy, IT and Communications on 12 May. To support mass media during this period, the ministry is considering liberalising the Law on Advertising in order to allow for advertisements of prescription medicines, sport poker and alcohol.
Following the ministry’s initiative, the association of Russian online cinemas – Internet-Video – presented Prime Minister Mikhail Mishustin with a request to amend the Law on Advertising to allow such advertisements to appear over mass media and on the Internet.
The letter, available on open sources, states:
“In order to compensate for the lost advertising profits of the video services, which result from the general recession of the industry market following the introduction of the anti-pandemic measures, it would be reasonable to allow the advertising of prescription medicines and broaden possibilities of the alcohol advertising in the Internet and in mass media by amending Articles 21 and 24 of the Law on Advertising”.
Such a relaxation would bolster the industry by attracting additional market participants with bigger marketing budgets. The request was also sent to the Ministry of Communications and the Federal Antimonopoly Service (FAS), which oversees compliance with the Law on Advertising.
Earlier this month, the National Association of Television Broadcasters also submitted to the State Duma Committee on Information Policy, IT and Communications a letter with the suggestion of supporting regional TV channels during the pandemic. Liberalising advertising legislation was among the proposed measures.
The current regulations establish heavy restrictions on advertising prescription medicines and alcohol. The law forbids the advertising of such products online, outdoors, in periodicals, on television and radio and in cinemas.
This recent initiative is not the first of its kind. In 2015, following the economic crisis of 2014, MinComSvyaz presented a similar anti-crisis plan that was an attempt to stabilise the situation and to support local mass media. However, this plan was not supported by the FAS.
The issue is now in the development phase and it is yet to be seen whether it will be approved by the FAS and submitted as a legislative initiative to the State Duma. Nevertheless, given the economic situation, the need for a rapid response and the pressure of the market players, the FAS may be expected to take a milder position and give the Ministry of Communications the green light. Alternatively, the plan could be adopted simply as an interim measure, as was suggested in 2015.