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Legislation and regulation
What are the principal statutes regulating advertising generally?
The principal pieces of legislation on advertising are the Marketing Act (2008:486), which is primarily based on the EU Unfair Commercial Practices Directive (2005/29/EC), and the Act on Names and Pictures in Advertising (1978:800). The Marketing Act sets the legal framework for all types of advertising practices and regulates relations between business-to-business and business-to-consumer undertakings.
In addition to the general advertising rules established in the Marketing Act, there are special regulations that apply to the advertising of specific products and services, such as the following:
- the Radio and Television Act (2010:696);
- the Alcohol Act (2010:1622);
- the Tobacco Act (1993:581);
- the Medicinal Products Act (2015:315);
- the Food Act (2006:804);
- the Lotteries Act (1994:1000); and
- the Consumer Credit Act (2010:1846).
Which bodies are primarily responsible for issuing advertising regulations and enforcing rules on advertising? How is the issue of concurrent jurisdiction among regulators with responsibility for advertising handled?
The Swedish Consumer Agency is the primary government body responsible for issuing advertising regulations and it is also the central supervising authority in respect of the general marketing rules. Other regulatory agencies, which have the mandate to issue regulations and are responsible for overseeing the advertising of specific products and services, are, for example:
- the Swedish Press and Broadcasting Authority;
- the Medical Products Agency;
- the National Food Agency;
- the Gambling Authority (LI); and
- the Financial Supervisory Authority (FI).
In addition, there are various self-regulatory bodies within the business sector that have the power to enforce the advertising standards and regulations of the industry (see question 5).
Regulators are, furthermore, legally obliged to cooperate with each other in order to resolve any issue of concurrent jurisdiction.
What powers do the regulators have?
Regulators have the power to impose informative or prohibitive injunctions under penalty of a fine in order to ensure conformity with applicable laws and regulations. The penalty amount is based on the circumstances of the individual case in which the size of the company and the damage incurred are factors that will be considered. For instance, the Swedish Consumer Ombudsman (KO) imposes penalties from approximately 500,000 Swedish kronor against larger companies. Regulators can furthermore refer a case to the KO who has the right to take legal action in court with the purpose of safeguarding consumer interests against businesses.
On the other hand, many self-regulatory bodies cannot impose any sanctions, instead they must rely on the publication of their own statements and verdicts that may result in decreased economic benefits for the convicted business or advertiser if other companies are hesitant to use them in the future.
What are the current major concerns of regulators?
A major concern that the regulators are faced with in regards to advertising is the lack of transparency; that is, unclear and insufficient advertising information. Subliminal advertising in social media, inadequate pre-sale information in telemarketing and the use of unsubstantiated health-related claims are a few examples of recurring complaints made to the KO.
Moreover, according to the Consumer Agency’s reports for 2013-2017, the main products and services that many consumers experience problems with are telecommunications services, insurances, public transport, trades, legal services and banking and financial services.
Give brief details of any issued industry codes of practice. What are the consequences for non-compliance?
The business industry, represented by different trade and consumer associations, develops its own codes of ethics and self-regulations in various areas such as the Ethical Rules for the Pharmaceutical Industry, the Advertising Guidelines from the Ethical Council of the Gaming Industry and the Code of Ethics for Press, Radio and Television. A well-known trade association and market player within the advertising industry is the Swedish Direct Marketing Association, representative of the direct marketing industry, which works continuously with ethical rules and industrial relations.
Furthermore, around 200 Swedish companies and business organisations are members of the International Chamber of Commerce (ICC) through the Swedish National Committee. The ICC Code of Advertising and Marketing Communication Practice (ICC Code) constitutes a general source of knowledge in the field of ethical marketing and is used in the industry’s self-regulations such as those mentioned above.
Compliance with the industry codes of practice is monitored by the self-regulatory bodies instituted by the business sector, such as the following:
- the Swedish Advertising Ombudsman (RO) and the RO Jury (RON);
- the Swedish Ethics Committee for Direct Marketing;
- the Swedish Alcohol Suppliers’ Scrutineer;
- the Swedish Ethical Committee for Fund Marketing;
- the Pharmaceutical Industry Information Examiner (IGM); and
- the Swedish Information Practices Committee (NBL).
In the absence of formal sanctions, the consequences of non-compliance with the decisions of the self-regulatory bodies consist primarily of negative publicity and public criticism.
Must advertisers register or obtain a licence?
Advertisers are generally not required to register or obtain a licence for advertising; however, specific products and services require prior approval from government agencies in order to be used for marketing purposes.
The following are examples of such permissions required:
- advertisers must seek permission from local authorities, such as the Swedish Transport Administration or the County Administrative Board, in order to use a space near a public road;
- advertising of non-prescription medicines is only allowed if the medicine has been approved for sale on the Swedish market; and
- advertisers are not allowed to promote (advertise) participation of lotteries organised without a licence.
May advertisers seek advisory opinions from the regulator? Must certain advertising receive clearance before publication or broadcast?
Regulatory agencies do not provide advertisers with the possibility of receiving individual advisory opinions; they only issue general advice and guidelines. These are recommendations that aim to facilitate the application of laws and regulations to specific areas and ensure uniform practice.
Advertisers are furthermore not required to receive clearance before publication, instead it is the advertiser’s own responsibility to ensure that the advertising and the marketing methods used are in accordance with applicable laws and regulations. The responsible media editor of the journal, or radio or television programme may nevertheless reserve the right to examine the advertising content’s conformity with advertising rules before allowing it to be broadcast or published.
Private enforcement (litigation and administrative procedures)
Challenging competitors advertising
What avenues are available for competitors to challenge advertising? What are the advantages and disadvantages of the different avenues for challenging competitors’ advertising?
Competitors can choose to file a complaint against a business or a product that does not meet the requirements of the advertising rules, addressed to the responsible regulatory or self-regulatory agency. It is then up to the regulator to assess and determine whether or not any actions will be taken against the company or product. Provided that the regulator chooses to assist the competitor in its personal claim, the accused company will first be given the opportunity to comply voluntarily under penalty of fine (see question 3). If an amicable solution is not reached, the regulatory agency may request the Patent and Market Court to impose the penalty, or even refer the case to the KO who can take legal action in court against the company. In view of this, the competitor does not have to bear any costs in terms of time or money, but has to leave it up to the regulator to decide whether any actions should be taken against the company.
Competitors may furthermore take legal actions themselves against a company that has advertised in breach of the rules in the Marketing Act. Such claim should be addressed to the Patent and Market Court, which has the power to issue preliminary (and final) injunctions and award damages for improper advertising. The general rule in Swedish court proceedings is that the losing party has to pay for the successful party’s legal costs. Thus, provided that the competitor is successful with its claim, it may also be compensated for its legal costs. Advantages of a court proceeding include the possibility of a decision being final as well as the possibility of sanctions being issued against the challenged party. The process can, on the other hand, be quite time-consuming, especially if appealed, and at the risk of being the losing party, one might be obliged to cover both parties’ legal costs.
How may members of the public or consumer associations challenge advertising? Who has standing to bring a civil action or start a regulatory proceeding? On what grounds?
Misleading advertising can be challenged by members of the public through the Swedish Consumers Agency whereas sex and gender discrimination and unethical advertising can be challenged through the RO. Advertising with regards to specific products or services can be reported to other regulatory agencies as set out by law, for example the Medical Products Agency, the FI and the LI. Regulatory proceedings are initiated only after the regulators have reviewed the filed complaint and assessed the need to bring actions against the advertising company.
Additionally, a business entity that is being impacted by certain advertising or an association of consumers, employees or business entities also have standing to bring a court action before the Patent and Market Court. A single or private consumer, on the other hand, does not have standing on its own to bring a civil action but has to go through the KO, who has standing to bring such civil actions.
Burden of proof
Which party bears the burden of proof?
In a marketing dispute, the legal burden of proof is placed upon the defendant, which is also known as the reversal of burden of proof. Hence, it is not the plaintiff but the accused advertiser who is responsible for presenting the necessary evidence that proves that the advertising has been proper. In respect of other legal issues that arise in an injunction claim, traditional burden of proof rules apply.
What remedies may the courts or other adjudicators grant?
The courts can grant the following legal remedies for unlawful advertising: interim and permanent injunctions under penalty of a fine, damages and a market disruption fee.
Length of proceedings
How long do proceedings normally take from start to conclusion?
The length of time proceedings normally take from start to conclusion differs from case to case depending on a number of circumstances, such as the complexity of the case. As of 1 September 2016, the former Market Court was replaced by two new specialised Patent and Market Courts: the Patent and Market Court and the Patent and Market Court of Appeal. The two courts now handle all cases and matters in the country relating to intellectual property, marketing and competition law. A proceeding in the former Market Court could roughly be estimated to take a year from start to conclusion. The extended chain of court bodies with the new Patent and Market Courts has consequently given rise to some uncertainty regarding the time aspect of court proceedings. The new courts were established with emphasis on shortening the court proceedings but it is too soon to give a rough approximation on how long the process may actually take. A proceeding in the first court instance may be resolved in one year but if the case is subject to appeal, the time until the final decision is reached may take from one and a half to two years.
Cost of proceedings
How much do such proceedings typically cost? Are costs and legal fees recoverable?
The costs of the proceedings can be divided into three parts: the court fee, the legal fees and the party’s own costs for the proceeding. The court fee is normally 900 or 2,800 Swedish kronor, depending on how large the claim is. The legal fees are dependent on how time-consuming and complex the proceeding is and whether the case is subject to appeal, etc. A rough estimation is that each party’s legal costs in one court instance amount to between 200,000 and 1.5 million Swedish kronor.
The main rule is that the losing party should pay the successful party’s (reasonable) legal fees. However, in cases where both parties have been successful in some part but lost in another part or issue, the court may decide that each party should bear its own costs or that one party should be compensated in proportion to how successful that party has been in the case. The court may also decide that the party’s own costs should be recovered.
What appeals are available from the decision of a court or other adjudicating body?
Decisions of the KO can be appealed to the Patent and Market Court. Decisions or judgments of the Patent and Market Court can be appealed to the Patent and Market Court of Appeal, provided the appellant is granted leave to appeal. Decisions of the Patent and Market Court of Appeal, on the other hand, cannot be appealed. However, if the Patent and Market Court of Appeal finds that the application of the law is unclear and that the Supreme Court could provide guidance, the Patent and Market Court of Appeal may decide that the decision can be appealed to the Supreme Court, provided the appellant is also granted leave to appeal.
Decisions of the RO can be appealed to RON and the decisions of the IGM can be appealed to the NBL.
Editorial and advertising
How is editorial content differentiated from advertising?
Editorial content is regulated by the principles in the Freedom of the Press Act (1949:105) and not by the general rules in the Marketing Act. Editorial content may, however, be tried as advertising under the marketing rules if the purpose and content is of a commercial nature. It is therefore necessary to make a clear distinction between what constitutes editorial content and what constitutes a paid advertisement. Failing to identify the commercial content of an advertising message is regarded as misleading advertising.
Advertising that requires substantiation
How does your law distinguish between ‘puffery’ and advertising claims that require support?
The Marketing Act does not explicitly distinguish puffery from claims that require support, which means that the same marketing rules apply. The former Swedish Market Court has, however, in its rulings expressed that puffery is only allowed as long as the average consumer identifies it as a general praise and it is not meant to be taken literally.
Rules on misleading advertising
What are the general rules regarding misleading advertising? Must all material information be disclosed? Are disclaimers and footnotes permissible?
The general rules regarding misleading advertising are set out in the Marketing Act. According to these rules, advertisers are not allowed to use false claims or other misleading statements in their marketing. Advertising is considered to be misleading and false if it affects the consumer’s ability to make an informed transactional decision. Advertisers are furthermore not allowed to leave out any material information that is of importance and that may result in unclear, unintelligible, ambiguous or otherwise inappropriate advertising.
Although not all material information needs to be disclosed, the advertisers are subject to different information requirements depending on the product or service being advertised. Advertisers of therapeutic goods and financial services are, for example, naturally required to provide more detailed information in their marketing compared to advertisers of other products and services.
As for the use of disclaimers and footnotes in advertising, there is no specific stipulation regarding these in the law. However, advertising that contains small print text that has conflicting marketing messages compared to the main text is considered to be in violation of the Marketing Act’s requirements on clarity and thus misleading. For instance, the NBL has ruled that certain information regarding medicinal products must be designed and placed so that such information can be noticed even from a fairly quick and cursory glance.
Substantiating advertising claims
Must an advertiser have proof of the claims it makes in advertising before publishing? Are there recognised standards for the type of proof necessary to substantiate claims?
Advertisers are generally not required to provide proof of their advertising claims before publishing. However, in the event of a court proceeding, it is the advertiser’s responsibility to provide the necessary evidence to support the accuracy of the claims made in the advertising. The stringency of the standard of proof applied is dependent on how general or narrow the statement or claim is. For example, claiming a product is the best in the country naturally requires a higher standard of proof compared to claiming a product is the best within a local area.
Are there specific requirements for advertising claims based on the results of surveys?
No, such advertising must be compatible with the general marketing rules stated in the Marketing Act (see question 17). Advertisers must keep in mind that the quality of the survey is of great importance so that the conclusions made are well founded.
Comparisons with competitors
What are the rules for comparisons with competitors? Is it permissible to identify a competitor by name?
Advertisers are generally allowed to make comparisons to identifiable competitors and products as long as the explicit requirements listed in section 18 of the Marketing Act are observed.
For example, this section explicitly states that comparative advertising must not be misleading and is only allowed if comparisons are made between products meeting the same needs or intended for the same purpose. Further, taking unfair advantage of the reputation of another trader’s mark, name or other distinguishing mark is not allowed, nor are comparisons that are discrediting or may create confusion among traders.
Test and study results
Do claims suggesting tests and studies prove a product’s superiority require higher or special degrees or types of proof?
Advertisers must be able to substantiate superiority claims against other products; that is, not only to prove that the advertiser’s product is superior but also that no other product is of the same quality. Advertisers should furthermore be careful not to draw the wrong conclusions based on inadequate studies or tests, otherwise it may be viewed as misleading advertising (see question 20).
Are there special rules for advertising depicting or demonstrating product performance?
No. All advertising, including the depiction or demonstration of a product performance, should be in accordance with the general advertising rules in the Marketing Act (see question 17).
Are there special rules for endorsements or testimonials by third parties, including statements of opinions, belief, or experience?
Advertisers are responsible for all the material used in their advertising, including the use of testimonials and endorsements by third parties, such as customer reviews and evaluations. Such claims can only be used for marketing purposes if they are true, relevant and verifiable. Thus, testimonials and endorsements that are outdated are regarded as misleading and the same applies to claims for which the advertiser lacks proof. Misleading commercial practices also include the use of a trust mark, quality mark or equivalent mark without having obtained the necessary authorisation, as well as claiming that a code of conduct has an endorsement from a public or other body for which it does not have.
Advertisers should additionally be aware that the use of trademarks or copyright-protected material, such as text or images that belong to someone else, requires the authorisation of the holder. The same requirement for consent applies to the use of a name or image of an individual if used for advertising purposes.
Are there special rules for advertising guarantees?
Traders, who in their advertising offer warranties or similar undertakings are, according to the Marketing Act, obliged to give the purchasing party clear information regarding the warranty as well as the information necessary for the purchasing party to enforce the warranty. Such advertising may not include a statement or otherwise create a false impression that the consumer will be in a better legal position than it would have otherwise been in. The commitment or information must also be submitted as a document or in another legible and durable form available to the buyer.
Are there special rules for claims about a product’s impact on the environment?
The Marketing Act makes explicit reference to environmental claims, meaning that such claims require particular honesty and trustworthiness. In this regard, the former Swedish Market Court has, in a number of judgments, emphasised that the term ‘environmentally friendly’ can only be used for marketing purposes if the product or service either improves or at least does not harm the environment. In 2017, a supermarket chain, Coop Sverige AB, was subject to the proceeding of the Patent and Market Court in which the court held that the grocery store’s advertisement, claiming that organic food reduces the level of pesticides in the body, was a violation of the Marketing Act.
Free and special price claims
Are there special rules for describing something as free and for pricing or savings claims?
Advertisers are not allowed to make unfair, false or misleading claims about a product’s price, the basis for calculating the price, specific price advantages or the terms of payment. In view of this, words like ‘free’ or ‘free of charge’ may not be used for marketing purposes if in fact the consumer has to pay something in return. Phrases such as ‘buy one, get one free’ are, on the other hand, allowed, provided that the liability for all costs is made clear, the free product is a complimentary good and that the regular price of the paid goods is neither reduced nor increased.
New and improved
Are there special rules for claiming a product is new or improved?
No. The Marketing Act, however, specifically prohibits advertising that includes misleading information about a product’s existence, nature, quantity, quality and other distinguishing characteristics. Claiming a product is new or improved is therefore only allowed if is such statement is true.
Claims of origin
Prohibited and controlled advertising
Prohibited products and services
What products and services may not be advertised?
Advertising that is in breach of other legislation is also per se in violation of good marketing practice as set out in the Marketing Act. The following are examples of products that are subject to the special legislation that includes rules about prohibited or controlled advertising:
- tobacco products (although a few exceptions apply) according to the Tobacco Act;
- prescribed medicines according to the Medicinal Products Act;
- alcoholic beverages on TV and radio according to the Alcohol Act; and
- foreign arranged lotteries according to the Lotteries Act.
The general clauses in the Marketing Act are furthermore supplemented by Annex I to the Unfair Practices Directive, which sets out a ‘black list’ of prohibited commercial practices. Such prohibited practices include pyramid schemes, illegal products and products that closely resemble others in their product’s class that cause or are likely to cause confusion between the products.
Prohibited advertising methods
Are certain advertising methods prohibited?
Any advertising that is considered to be misleading or aggressive according to the general clauses in the Marketing Act or advertising that is listed in the ‘black list’ (see question 28) is prohibited. Such commercial practices include, for example, subliminal advertising, sending spam emails without the prior consent of the recipient and making persistent and unwanted solicitations by telephone, email or other remote media.
Protection of minors
What are the rules for advertising as regards minors and their protection?
Advertising directed at children and youths is only allowed under certain limited conditions. The reason is that young people have yet to develop the skills necessary for critical thinking and are therefore more susceptible to advertising messages compared to adults.
Advertising that includes direct exhortation to children, to either purchase or to persuade their parents or other adults to buy an advertised product for them, are prohibited according to the Marketing Act. Sweden also has a total ban on television advertising aimed at children under the age of 12 and addressed direct advertising, such as text messages or emails, aimed at children under the age of 16.
Credit and financial products
Are there special rules for advertising credit or financial products?
Yes, in some cases companies and intermediaries that provide financial or credit services to the public must obtain permission from the FI to conduct such activities.
In advertising credits or credit services, companies are required to safeguard the consumer’s interests with due care along with particular moderation and restraint. Advertisers are furthermore obliged to provide the credit consumer with all the necessary information leading them to making an optimal decision based on their own needs and economic situation. The information provided on the credit should be presented as factual, accurate and in neutral terms, and it must be easy to pay attention to. Thus, it is important not to mislead the consumer in any way regarding the consequences or conditions of the credit arrangement. The Consumer Credit Act additionally stipulates the obligation to provide information relating to the effective interest rate for the credit.
As for the advertising of other financial products such as insurances, loans and investment products, similar rules apply and the intermediary or the company concerned is naturally obliged to provide detailed pre-contractual information. These specific information requirements are listed in different regulations depending on the product or service being advertised. For example, with regards to the advertising of saving and investment products, it is necessary and of great importance to provide the consumer with information about the risks associated with such products. Since January 2018, new rules regarding financial instruments in the EU apply because of the second Markets in Financial Instruments Directive (Directive 2004/39/EC) and the Markets in Financial Instruments Regulation (Regulation (EU) No. 600/2014). The Regulation applies to investment firms, credit institutions when providing investment services or performing investment activities, and to market operators including any trading venues they operate and all other such companies involved in financial instrument transactions. According to the preambles of the Regulation, competent authorities’ power should be complemented with an explicit mechanism for prohibiting or restricting the marketing of any financial instrument or structured deposit giving rise to serious concerns regarding investor protection, orderly functioning and integrity of financial markets, or commodities markets, or the stability of the whole or part of the financial system, together with appropriate coordination and contingency powers for the European Securities and Markets Authority or, for structured deposits, the European Banking Authority.
Therapeutic goods and services
Are there special rules for claims made about therapeutic goods and services?
The advertising of prescription medicines directed towards the general public is not allowed according to the Medicinal Products Act, with the exception of vaccination campaigns against infectious diseases. Advertising non-prescription medicine, on the other hand, is permitted only if the medicine has been approved to be sold on the Swedish market by the Swedish Medical Products Agency and if the advertising is not directed at children.
In addition, the advertising should promote the proper use of the medicine and include information that is objective, balanced and up-to-date. The Medicinal Products Act also stipulates certain information and presentation requirements, such as that the content of the advertising must not be designed in a way that may lead individuals away from seeking the appropriate care. As for naturopathic drugs and traditional herbal medicinal products, they can only be advertised as effective against illnesses of a temporary or mild nature and the marketing also needs to be compatible with the above-mentioned requirements.
Food and health
Are there special rules for claims about foodstuffs regarding health and nutrition, and weight control?
Nutrition and health claims are only allowed if they satisfy the requirements as set out in the Regulation (EC) No. 1924/2006 on nutrition and health claims made on foods. The rules are EU-wide and apply to all types of labelling, presentation and advertising of foods.
Nutrition claims that can be used for marketing purposes are listed in the Annex to the Regulation. Examples of permitted nutrition claims, provided the products in question also meet the requirements set out in the Regulation, are ‘low in fat’, ‘no added sugar’ and ‘light’. Health claims, on the other hand, need to have been approved by the EU Commission in order to be used for commercial purposes. Health claims that are not allowed include those that make reference to recommendations of individual doctors or individual health professionals and health-related claims that make reference to the rate or amount of weight loss.
What are the rules for advertising alcoholic beverages?
In Sweden, there are significant restrictions on advertising alcoholic beverages because of its effects on public health. The principal rule, according to the Alcohol Act, is that all permitted advertising of alcoholic beverages (greater than 2.25 per cent alcohol by volume) must display the text ‘particular moderation’. This means that any variety of advertising of alcohol directed to consumers may not be intrusive, insistent or encourage the use of alcohol, nor be aimed at people under the age of 25. The advertising of alcohol may furthermore only display the product itself and thus not be linked to individuals, attributes or to a certain lifestyle.
There is, moreover, a total ban on advertising alcohol on television and radio, with the exception of advertising that conforms to the ‘country of origin’ principle. This means that Sweden does not prohibit alcohol advertising on TV transmitted from other countries, if such advertising is allowed in the country of origin. As for other media, there is no explicit prohibition of marketing alcohol other than that the content of such advertising should be promoted in accordance with the requirement for particular moderation. Commercial adverts in periodicals are, for example, only allowed if the alcoholic beverage does not exceed 15 per cent alcohol by volume and 20 per cent of the advertising surface includes warning text about the harmful effects of alcohol. Advertising alcohol on the internet is subject to the same rules only with somewhat less stringent requirements. The Swedish Consumer Agency and the Swedish Press and Broadcasting Authority contacted the EU Commission regarding a ban on advertising alcoholic beverages in Sweden through companies that had established themselves in the UK and broadcast from the UK to Sweden with content aimed at the Swedish public (eg, TV3, TV6, TV8, Channel 5 and Channel 9). The EU Commission replied that such advertising was permitted because a company, in such a case, did not have the purpose of avoiding the Swedish advertising rules when they established themselves in the UK.
What are the rules for advertising tobacco products?
The Tobacco Act bans almost all forms of tobacco advertising in Sweden, including indirect advertising and distribution of free tobacco products. The major exceptions to the prohibition on tobacco advertising, provided that such advertising is not intrusive, insistent or encouraging the use of tobacco, are commercial messages at the point of sale and advertising that only consists of providing tobacco products for sale.
Are there special rules for advertising gambling?
The main legislation that regulates gambling in Sweden are the Lotteries Act and the Casinos Act (1999:355). Currently, only licensed gaming operators are allowed to advertise on the Swedish market and such permits are only granted by the Swedish state or the Swedish Gambling Authority.
The following are the requirements for advertising of casino games arranged in premises that are mainly used for this purpose (ie, a casino):
- it should be moderate;
- it may not be intrusive or insistent;
- it may not be directed at children or youths under the age of 25;
- it may only appear in newspapers, on the internet or at the venue; and
- the advertising of individual games and jackpots may only appear at the venue.
With regards to the Lotteries Act, it not only refers to what is familiarly called a lottery but also to various forms of gambling whose outcome is partially or entirely determined by chance (see question 37).
What are the rules for advertising lotteries?
The rules that regulate the advertising of lotteries in Sweden are set out in the Lotteries Act. In order to arrange a lottery for the general public, it is a general requirement that a licence be obtained from the Swedish Gambling Authority. Advertising that is prohibited under the Lotteries Act is any advertising that promotes the participation in unlawfully arranged lotteries, and advertising that promotes the participation in lotteries arranged outside of Sweden.
In addition, two new provisions regarding advertising have been introduced under the Lotteries Act as of 1 January 2017: a general provision that states the need to observe ‘moderation’ and a second provision, which prohibits advertising specifically directed at children and youths under the age of 18.
The requirement of moderation, inter alia, refers to the advertising not being intrusive or socially attractive and that the commercial content is factual and reliable.
What are the requirements for advertising and offering promotional contests?
Unlike the arrangement of a lottery, the outcome of a contest is determined by someone’s performance and not by chance. This means that the provisions set out in the Marketing Act are applicable to the advertising of promotional contests. However, should a promotional contest also include a random element, then this random element stage needs to occur before the element of skill, otherwise the Lotteries Act becomes applicable.
The advertising of promotional contests needs to include all detailed information regarding the essential conditions for the contest, such as price information, time limitations and other limitations set for the contest. As with other types of marketing, the advertisement of a promotional contest must not be false or misleading.
Are there any restrictions on indirect marketing, such as commercial sponsorship of programmes and product placement?
Provisions regarding product placement and sponsoring are set out in the Radio and Television Act. The sponsorship rules state that the sponsor needs to be announced in an appropriate manner at the beginning or end, or both, of the programme. Such sponsorship message should include the sponsor’s name, logo or other distinctive mark and may not contain promotional elements.
The following rules apply to programme sponsorship:
- news programmes cannot be sponsored;
- sponsorship by someone whose main activity is the production or sale of alcoholic beverages, tobacco products or electronic cigarettes (e-cigarettes) and refill containers (e-juice) is prohibited; and
- sponsorship by pharmaceutical companies that promote prescription medicines, medical treatments available on prescription or infant formula is prohibited.
Similar to the sponsorship rules, product placement is only permitted if information is given about the placement at the beginning and end of the programme as well as following advertisement breaks. The information should contain a neutral announcement about the appearance of the product placement and the product or service that has been placed in the programme.
Product placement is furthermore only allowed in movies, TV shows, sports programmes and light entertainment programmes, based on the following rules:
- the product placement does not unduly benefit commercial interests;
- the product placement of tobacco, alcohol, prescription medicines, infant formula or e-cigarettes and e-juice is prohibited; and
- the programme is not primarily intended for children under 12 years of age.
Other advertising rules
Briefly give details of any other notable special advertising regimes.
Political propaganda, religious teachings and civic information are not subject to the Swedish marketing rules but fall under the Fundamental Law on Freedom of Expression (1991:1469) and the Freedom of the Press Act. Gender discriminating and other offensive advertising that are in breach of the ethical marketing rules also fall outside the Marketing Act. The RO is, however, entitled to handle complaints about gender discrimination and unethical advertising with the guidance of the ICC Code (see question 5).
Are there any rules particular to your jurisdiction pertaining to the use of social media for advertising?
Advertising through social media must comply with the same advertising rules as any other type of media. A recurring issue, however, is the difficulty in determining whether texts and images conveyed through blogs, Instagram and other social networks are purely informative or advertorial. Since subliminal advertising is prohibited under the Marketing Act, an advertorial post in a blog or on Instagram must clearly indicate its commercial purpose by being labelled as an advertisement (see question 42). It is furthermore important to have such labelling in the introduction and not at the bottom of the post and that the reader is able to identify the sender of the advertisement.
Have there been notable instances of advertisers being criticised for their use of social media?
The use of subliminal advertising in social media has been the subject of extensive discussions for the past few years in Sweden, in which bloggers and their advertising posts have drawn the most headlines. The question raised in these cases has been whether the advertisement labelling had been sufficient to meet the requirements as set out in the Marketing Act (see question 41).
In addition, the Nordic Consumer Ombudsmen, a cooperation set-up between the Nordic countries, reached a joint position statement on social media advertising in 2016. The Ombudsmen stated, among other things, that an advertorial post is sufficiently labelled if it is clearly marked with the word ‘advertisement’ in the introduction, whereas an introduction such as: ‘This is in collaboration with . . .’ is not always considered sufficiently clear with regards to commercial messages hidden in editorial text.
In January 2018, the Patent and Market Court ruled that the content on the blog of the famous Swedish blogger, Kissie, was in violation of the Marketing Act. Imposing a penalty of 100,000 Swedish kronor in the case of non-compliance, the court held that the blogger had to clarify in a more transparent and clear way when the blog’s content was sponsored.
Are there regulations governing privacy concerns when using social media?
There are several regulations governing the privacy of an individual when using social media. The Act on Names and Pictures in Advertising, and the Electronic Communication Act (2003:389) (referring to online behavioural advertising such as cookies), both stipulate the requirement for obtaining approval from the person being exposed.
The provisions set out in the Personal Data Act (1998:204) additionally regulate an individual’s right not to have their privacy violated through the incorrect processing of their personal data. Although there are a few exceptions, the principal rule when processing such data is that you need to obtain consent from the person concerned. The consent does not need to be in writing; however, it must be voluntary and give a clear expression of the registered person’s will. It can also be withdrawn at any time and can only be processed as long as it is necessary with regards to the purpose of the processing.
As of 25 May 2018, the Personal Data Act will be replaced with the new EU General Data Protection Regulation ((EU) 2016/679) (see ‘Update and trends’). Similar rules will apply; however, they will be somewhat more stringent with regards to the requirement of consent, privacy and transparency, as well as the sanctions that can follow if the rules are breached.
Update and trends
Update and trends
Updates and trends
The EU’s General Data Protection Regulation (GDPR) will be applicable from 25 May 2018, when it will supersede the Personal Data Act (1998:204). It will expand the rights of individuals to control how their personal information is collected and processed, and place a range of new obligations on organisations meaning that they will be accountable for data protection. The GDPR applies to personal data, which is any information that directly or indirectly can identify a natural person, and can be in any format. The Regulation places stricter controls on the processing of special categories of personal data. The inclusion of genetic and biometric data is new compared to the Personal Data Act. The GDPR applies to all organisations within the EU - commercial businesses, charities or public authorities - that collect, store or process the personal data of individuals residing in the EU, even if they are not EU citizens. Organisations based outside the EU that offer goods or services to EU residents, monitor their behaviour or process their personal data will be subject to the GDPR. Service providers (data processors) that process data on behalf of an organisation also come under the remit of the GDPR and will have specific compliance obligations. Examples might be a company that processes payrolls or a cloud provider that offers data storage. Administrative fines under the new act may, depending on which of the provisions of the GDPR have been breached, amount to a maximum of €20 million, or, if a higher amount, 4 per cent of the total worldwide annual turnover of an organisation. Such fines may be imposed on both the controller and the processor. This regulation will impact advertising practices overall. Furthermore, a Swedish Data Protection Commission has proposed a new national regulation that will complement the provisions in the GDPR.
In January 2018, a Swedish government official report was issued regarding marketing to consumers and potential changes to the Marketing Act. The investigation found that there were no actual shortcomings in current marketing legislation. On the other hand, the investigation considered that the Swedish Consumer Agency should be given sharper supervisory tools, including an opportunity to carry out control purchases under hidden identity. The investigation also suggested that there may be a need for new forms of technical solutions to enable the Consumer Agency to conduct active and effective supervision in the digital environment. Whether or not the report will result in any new regulations are not known at this time.
On 10 January 2017, the European Commission adopted a proposal for a regulation on Privacy and Electronic Communication to replace the 2009 ePrivacy Directive and align ePrivacy rules with the GDPR. The draft of the new ePrivacy Regulation aims to reinforce trust and security in the Digital Single Market by updating the legal framework on ePrivacy. The regulation seeks to extend the scope of protection to all electronic communications service providers, including but not limited to, Gmail, Skype, WhatsApp and Facebook and to metadata derived from electronic communications, such as the time and location of a call. The proposed changes are likely to impact advertising on the internet and in social media. An ‘optimistic’ forecast is that the ePrivacy Regulation will be finally approved by the end of 2018, although the implementation date remains to be seen.