Online advertising to tackle copyright infringement and counterfeit good

How is industry responding to the threat of advertising on websites and apps which infringe copyright or disseminate counterfeit goods?

The background

A variety of interested parties (including advertisers, agencies, advertising platforms and publishers) have signed a voluntary memorandum of understanding (MoU) to try and minimise the placement of advertising on websites and mobile phone applications that infringe copyright or disseminate counterfeit goods. 

Online advertising is a major source of income for IP‑infringing websites.  The misplacement of ads has been identified as an important problem, with brands themselves often unaware of where their ads are being placed.  The presence of ads for well-known brands or payment services on apps or sites that infringe intellectual property rights often leads consumers to believe that sites they are visiting are legal when they are not. 

MoU aims

The MoU includes commitments from the parties to minimise the placement of advertising on sites and apps that infringe third party IP, and to also remove advertising if the advertiser becomes aware that their advertising is live on such sites and apps. 

The aim of the MoU is to (i) strengthen IP protection; (ii) reduce the harm caused by IP infringement; (iii) uphold fundamental rights; and (iv) ensure fair competition across the market.  The MoU further aims to support and complement initiatives against IP infringements in the relevant member states.  Based on their own individual policies and assessment criteria, the signatories agree to limit the placement of advertising on other websites and/or mobile applications, which have no substantial legitimate uses. 

The MoU is without prejudice to any other initiatives aimed at minimising the placement of advertising on those platforms that infringe IPR. 

MoU commitments

Individual signatories to the MoU who are directly responsible for the placement of advertising, commit to enact reasonable measures to minimise the placement of advertising on websites or mobile applications that:

1. Have no substantial legitimate uses; and
2. Have been found by regulators or law enforcement bodies to infringe IP and disseminate counterfeit goods on a commercial scale. 

They also commit to adopt publicly available IP policies which include general information on the measure, tools and safeguards put in place.

Those signatories that operate in the field of buying, selling or brokering the sale/purchase of advertising space commit to the inclusion in their contracts with advertisers or other media buyers of an obligation that requires the use of tools and safeguards designed to ensure that advertising is not placed on platforms that fall under (a) or (b) above.  Moreover, brokers of advertising sales/purchase also commit to adopt IP policies and to make these publically available. 

Associations that are signatories undertake to use their best efforts to dissuade their members from: (i) offering or buying advertising space on the platforms described in (a) and (b) above; and (ii) allowing their services to be used in connection with the placement of advertising on platforms such as those described in (a) and (b) above. Associations also commit to encourage their members, where appropriate, to sign the MoU individually. 

All signatories must ensure that they act in a manner than upholds the commitments made in the MoU.  They must not enter into any discussion, activity or conduct that violates applicable competition law – this includes engaging in any kind of collective action with other signatories that could have the object or effect of disadvantaging other players in the market. 

Monitoring

A key aspect of the MoU is that the signatories agree to monitor and measure the effectiveness of the MoU by reporting their efforts to enact their commitments and to also monitor the impact of the MoU on the online advertising market.  Signatories commit to inform other signatories as well as the EC on (i) the definitive means that they have in place to comply with the commitments set out in the MoU; and (ii) the estimated effectiveness of such means.  

Additionally, signatories will collect and collate information that is relevant to the online advertising market in order to discuss and ascertain the impact that the MoU has had on the wider market. 

Why is this important?

By signing the MoU, various market leaders in this field (including Google, World Federation of Advertising and ISBA) have committed to taking active steps to meet the challenges posed by IP‑infringing websites and apps.  This is against the backdrop of existing initiatives tackling IP infringement in Member States, as set out under EU and/or national law.  The latter provides a legal framework under which the MoU can operate while also establishing a basis for potential legislative change based on the findings of the MoU after the initial 12 month period.

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