Council Directive 89/552/EEC of 3 October 1989 concerns the coordination of certain legal and administrative provisions of Member States concerning television broadcasting.
As regards television advertising, Article 18 of the directive provides that the transmission time devoted to advertising may not exceed 15% of the daily transmission time. However, that percentage may be raised to 20% if it includes forms of advertising such as direct offers to the public for the purpose of selling, buying or renting products, or providing services, provided the volume of spot advertising does not exceed 15%.
It also provides that the transmission time devoted to spot advertising must not exceed 20% within a given period, and that the time devoted to forms of advertising such as direct offers to the public for the purpose of selling, buying or renting products, or providing services, must not exceed one hour per day.
The directive was to be implemented by Member States not later than 3 October 1991.
In implementation of the directive, the Italian Minister of Post and Telecommunications adopted Ministerial Decree No 581/93 of 9 December 1993.
That decree provided that, unlike direct offers to the public, "telepromotions" could not benefit from the additional transmission time provided for in Article 18(1) of the directive.
It also provided that sponsors' names could be mentioned only in trailers for programmes or in messages broadcast immediately before or after those programmes.
RTI, Publitalia '80, Radio Torre, Rete A Srl, Vallau Italiana Promomarket Srl, Radio Italia Solo Musica Srl and Others, and GETE Srl brought an action before the Tribunale Amministrativo Regionale del Lazio (Regional Administrative Court for the Lazio Region, Italy) for the annulment of Decree No 581/93.
The applicants argued that the Italian provisions on "telepromotions" and sponsoring did not comply with the directive, firstly because the decree assimilated "telepromotions" to spot advertisements, and secondly because, as regards sponsoring, the decree was more restrictive than the directive, which did not prohibit further mention of the sponsor or its products during the programme, provided those further mentions did not encourage purchase in a particular manner by making special promotional references.
The Italian court referred two questions to the Court of Justice on the interpretation of the directive.
Although the directive defines what is meant by television advertising, it does not define "direct offers to the public for the sale, purchase or rental of products or for the provision of services" or "spot advertising". It makes no mention of "telepromotions".
However, the use of the words "such as" shows that the Community legislature intended to refer to "direct offers to the public" merely by way of example, to illustrate the type of advertising which might justify increasing the maximum daily transmission time.
The justification for the increase is that programmes intended to promote direct offers to the public (showing products which may be directly ordered by telephone, mail or teletext and are intended to be delivered to the viewer's home — "teleshopping") aresignificantly longer than spot advertisements, which normally constitute a very brief form of advertising.
Consequently, whilst the maximum advertising space for spot advertisements is 15% of daily transmission time, that percentage may be raised to 20% for forms of advertising (telepromotions, for example) which, although not constituting "direct offers to the public" (teleshopping), are like those offers in that they require more time than spot advertising on account of the way in which they were presented.
Member States are in no way obliged to increase the daily transmission time devoted to advertising, however. Similarly, they are at liberty, if they do increase the time, to do so only in respect of certain more time-consuming forms of advertising. They are also entitled to adopt stricter rules than are contained in the directive in defining the types of advertising which may benefit from the 5% extra transmission time, provided those rules are compatible with the Community rules on the freedom to provide services and the free movement of goods.
The wording of the directive does not restrict the mention of sponsorship to the beginning and the end of the programme.
The directive allows repeated references to sponsorship, even during the programme.
However, even though it allows the name or logo of a sponsor to be mentioned during broadcasts, it allows such references only in so far as they do not "encourage the purchase or rental of the products or services of the sponsor or a third party, in particular by making special promotional references to those products or services".
Member States are in any event entitled to impose stricter rules in this area on television broadcasters within their jurisdiction, provided they do not infringe the freedoms guaranteed by the EC Treaty.