The New Law in Brief
Article 189: Killing Advertising Slowly
1. Pool Benchmarking No More
2. Prohibited Data Exchange
3. Illogical and Unreasonable Contractual Obligations
The new media law forces agencies to get a written cost agreement with a media owner before making the contract.
What this means is that agencies are kept from offering their own prices in pitches before a written contract with the vendors (media owners) is signed. Anyone who knows the ins and outs of the industry understands the tricky situation that such a stipulation creates.
This new requirement makes it impossible for media agencies to provide media price commitments during a media agency pitch.
Such practices are also in direct contradiction with fair competition directives, as mandated by relevant European Union authorities.
A Profound Media Shakeup with Potentially Devastating Consequences
The three effects mentioned above are just an initial overview of how Article 189 will restrict fairness and transparency in the media world. The long-term effects of the legislative change could be quite devastating, especially taking into consideration the fact that many key questions about standard media buying processes remain unanswered.
Greece’s new media law is creating a ton of confusion among advertisers, media agencies, auditors and other industry representatives. Some advertisers have already contacted their media agencies to understand this new law's direct consequences to their agreements with them. "Business as usual" one agency replied to their client. Even some local media owners have come forward to voice objections, even though the law is entirely formulated to protect their interests.
Fair competition and transparency go out the window. In such a scenario, only a couple of players that maintain oligopoly positions are likely to benefit.
The fact that the law itself was passed quickly, without legislative discussion and over the parliament’s last working day is indicative enough of the framework’s unfair nature.
Obviously, the law will favour a select group of media owners who will utilise the restrictions to keep their prices up. Fixing prices, however, does not work in a liberal, competitive market that follows liberal capital principles.
The law also contradicts the European law on fair competition and Free Trade Rules. The anti-transparency efforts aren’t even disguised, and they stand front and centre under Article 189.
It is a shame and a pity that the law goes against free world practices, and ironically, it is emerging when Greece is celebrating 200 years of the republic’s independence. The nation that birthed Western values and democratic principles is now being victimised in a rather unacceptable way.
If you need any assistance in relation to this new law, and how it impacts your business, please feel free to reach out to us. We will be very happy to help you out.