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Memorandum of understanding on online advertising and IPR

Memorandum of understanding on online advertising and IPR

The Memorandum of understanding (MoU) on online advertising and IPR is a voluntary agreement facilitated by the European Commission to limit advertising on websites and mobile applications that infringe copyright or disseminate counterfeit goods.


The signatories of this MoU commit to minimise the placement of advertising on websites and mobile applications that infringe copyright or disseminate counterfeit goods. This will help to curtail the revenues of these websites and apps. The signatories also commit to monitor the impact and effectiveness of the MoU on the online advertising market.

Report on the functioning of the MoU (2020)

In August 2020, the Commission published a report on the functioning of the MoU. One year after its signature, the MoU has created awareness among brands that their ads may end up on IPR-infringing websites.

According to a monitoring study on the impact of the MoU on the online advertising market (see below), following the introduction of the MoU, the share of advertisements of European business on IPR-infringing websites has dropped by 12%, and advertising by major brands has decreased from 62% to 50% in the gambling sector. Downward trends related to EU major brands and EU ad intermediaries have also been identified.

Signatories have shared expertise and good practices, e.g. in the use of advanced technology to monitor the placement of ads and in the adjustment of contractual arrangements to minimise piracy.

Practices reported under the MoU set a standard for signatories and may prompt stakeholders not involved in the MoU to perform better in the fight against IPR infringements at national, EU and international level.

However, the MoU process has its limits, such as the involvement of a limited group of stakeholders. Therefore, signatories encourage further participation in the MoU by other actors in the digital advertising supply chain, as well as social media firms, payment industry, technology companies specialised e.g. in programmatic online advertising, and technology providers offering brand safety solutions and monitoring services. Signatories also call for enhanced cooperation with public authorities.
 

Study on the impact of the MoU on online advertising and IPR on the online advertising market

In August 2020, the Commission published a study quantifying the evolution of online advertising on websites infringing IPR over time and monitoring the impact of the MoU on the online advertising market. This study

  • provides an indication of the extent and nature of the problem in different EU countries between January and June 2019 by analysing, in particular, ad types, branded advertising sectors, brands and ad intermediaries
  • compares the EU to the US over the same time period, providing a benchmark
  • compares a subset of identical websites before and after the signature of the MoU
     

Guiding principles (2016)

In March 2016, the Commission held a stakeholders' general meeting on online advertising and IPR, bringing all the interested parties together (the advertising industry, intermediaries, content protection sector, online media, right owners, civil society, consumer organisations, brands and advertisers). The stakeholders discussed the possibility of establishing a voluntary agreement at EU level in order to avoid the misplacement of advertising on IP-infringing websites, thereby restricting the flow of revenue to such sites while safeguarding the reputation of the advertisers and the integrity of the advertising industry.

At the next general meeting in October 2016, stakeholders agreed on the basic principles of an agreement to help to restrict the income that IP-infringing websites get from online advertising.
 

Background

Websites and mobile applications that provide access to IPR-infringing content, goods or services on a commercial scale use the sale of advertising space as one of their revenue sources by misusing online advertising business models.

The misplacement of ads is a serious issue, with brands themselves often unaware of where their ads are ending up. The presence of mainstream advertising for major brands, as well as the availability of well-known payment services on IPR-infringing websites and apps

  • gives undue credibility to such websites and apps; this confuses consumers, who may mistakenly believe that such websites or apps provide access to legal content, goods or services, and erodes their confidence
  • damages the reputation of legitimate brands, which are often unaware of where their ads end up
  • damages the reputation, and undermines the value of, the advertising industry