Russian Federation: Advertising Law In Russia

1. Overview of the legal and regulatory regime for advertising

The Russian Constitution guarantees common economic space, protection of competition, freedom of thought and speech, and ensures the right to freely look for, receive, transmit, produce and distribute information by any legitimate means. This general rule, established by the primary Russian statute, constitutes the foundation of advertising business regulation in Russia, which is further developed in the Law "On Advertising" (hereinafter the Advertising Law). The Advertising Law is the most important piece of federal legislation for the advertising industry in Russia.

Article 1 of the Advertising Law defines its main goal as facilitating the development of the market economy based on the principles of fair competition and ensuring common economic space. In a nutshell, the Advertising Law prevents false or misleading advertising and sets out industry-specific regulations and certain prohibitions over how competitors may deal with each other as well as how businesses should treat their customers.

The first Advertising Law was adopted in 1995, in the early days of the emerging Russian market economy. As the competitive environment advanced, the demand for more sophisticated legislation became apparent. Responding to the call of the times, the State Duma passed the current federal law on March 13 2006. Even though the legislature tried to consider the then-current economic situation, since the date of its enactment the Advertising Law has undergone 324 amendments, with the latest introduced on December 28 2013.

Because of the large number of questions relating to the enforcement of the Advertising Law that have been posed by the Russian arbitration courts, the Plenum of the Supreme Arbitration Court of the Russian Federation (the SAC) adopted on October 8 2012 Ruling 58 "On Certain Issues of Enforcement of the Federal Law 'On Advertising' by the Arbitration Courts" (the SAC Ruling). The SAC Ruling clarifies important legal issues, with special emphasis on the concept and definition of advertising, the specifics of certain types of advertising, and enforcement of the Advertising Law by the arbitration courts.

The Federal Antimonopoly Service of the Russian Federation (the FAS) is the state administrative body responsible for enforcement of the Advertising Law. The FAS initiates administrative cases ex officio, on a submission of the public prosecutor or at the petitions of individuals and legal entities; it also carries out inspections, brings administrative and legal actions against infringers, and issues mandatory orders to rectify discovered violations. The FAS's orders or rulings can be challenged in court in the manner prescribed by the Arbitration Procedure Code of the Russian Federation. The period of limitation for the institution of administrative cases under the Advertising Law is one year from the date of the violation committal.

Violation of the Advertising Law results in administrative and civil liability for the advertiser, advertising producer and advertising distributor, as the case may be. Administrative procedure is initiated by the FAS, which determines the case and imposes an administrative fine on the infringer, whereas civil liability is incurred upon judicial consideration of the case initiated by the rights holder. A person whose rights were infringed by the inappropriate advertising can apply to court and claim compensation for losses (including lost profit), recovery of damages, compensation for moral damages and public refutation of false advertising. In one of the cases the Russian court held the advertiser liable for violation of the Advertising Law and stated that advertising under the slogan "Bought the driving licence? Buy a car!", distributed by Plaza AutoDar LLC, had a negative characteristic towards the State Road Police responsible for issuing driving licences, and denigrated the honour, dignity and business reputation of the State Road Police officers, as well as the business reputation of the state body, namely the Ministry of Internal Affairs. The court obligated Plaza AutoDar to cease the advertising and pay a fine for defamation.1

Violations of the Advertising Law are not subject to criminal penalties (such as imprisonment).1

1.1 False and misleading advertising

The general requirements for advertising are set forth in Article 5 of the Law, which states that the advertising should not be false and misleading.

The advertising is considered false if it:

  • contains incorrect comparison of the advertised goods with other goods in circulation produced by other manufactures and sold by other sellers;
  • denigrates the honour, dignity and business reputation of other persons;
  • advertises goods that are prohibited from being advertised if it is done in the likeness of the advertising of other goods whose trademark is identical or confusingly similar; or
  • constitutes an act of unfair competition.

The Russian court has previously ruled as false advertising and unfair competition the actions of a management company that had distributed promotional leaflets warning tenants in a building it managed regarding a competitive management company. The leaflets contained allegations that the other management company was soon to be declared bankrupt, whereas the company distributing the leaflets was the only reliable company that could manage a condominium partnership. At the same time, the leaflets did not contain any supporting evidence of the allegations. Therefore, the court decided that the actions on distributing the leaflets constituted unfair competition and ruled to cease the infringement.2

One of the most common cases of false advertising is groundless positioning of a brand, goods or a manufacturer or service provider as 'the best' or 'number one'. Both the FAS and the Russian courts require that, in order to prove superiority, the advertiser should indicate the criteria of comparison and, if necessary, provide documentary confirmation of the claimed fact.

The FAS has previously considered the advertising of a vodka brand as 'a number one in Russia' unfair competition as the producer was not able to prove that the vodka was, indeed, ranked the number one. Moreover, an expert opinion showed that the vodka did not have the best-quality characteristics and had never been awarded any quality prizes.

The Advertising Law contains an extensive list of information regarding goods (services) and their manufacturers (providers) that may be considered misleading advertising, including information on:

  • the advantages of the advertised goods in comparison with the goods in circulation produced by other manufacturers and sold by other sellers;
  • the characteristics of the goods, including nature, composition, method and date of manufacture, qualities etc;
  • the range of the goods, as well as the time period during which and the place where they are available for sale; and
  • the price of the goods, payment method, discounts, tariffs and other terms and conditions of their purchase.

In addition to the above, the Advertising Law defines 'misleading advertising' as advertising containing untrue information about other persons' intellectual property rights and means of individualisation (eg, trademarks, company names and trade names). In a case from 2009, the Russian court found that Milano New LLC violated the Advertising Law and infringed Milano LLC's exclusive right to the firm's name, which existed earlier by use of the designation 'MILANO' in its firm's name and trade name. The court affirmed the claim and stated that by using the claimant's firm's name in the advertising, the defendant misled potential consumers.3

As was clarified by the SAC Ruling, the use of a trademark with respect to goods that were duly introduced into civil circulation is allowed by other persons in the advertising of their sales activity of such goods. Lack of the trademark owner's authorisation will not automatically result in considering such advertising as misleading, provided that the customers deem such advertising as the advertising of an independent seller or service provider. The Russian court has previously found that a limited liability company was not violating the Advertising Law by using in its advertising the trademark 'KAMAZ' belonging to a well-known truck manufacturer, because it was not positioning itself as an official vehicle service provider but instead informing its potential customers about the goods and services it was providing.4

2. Comparative advertising

The Advertising Law does not prohibit comparative advertising as such unless, as provided by Article 5.2.1 of that law, the advertising contains incorrect comparison of the advertised goods with other goods in circulation produced by other manufactures and sold by other sellers, or, as provided by Article 5.3.1, makes dubious claims about the advantage of the advertised goods over competitor products.

The Advertising Law does not define the criteria for 'incorrect comparison', leaving it to the discretion of the FAS and the courts, as the case may be. As per the SAC Ruling, comparison based on the 'disparate' criterion or on incomplete comparison is prohibited. The SAC has also stated that the advertiser should be made liable for dissemination of false information, not only with respect to the advertised goods but also the goods of the competitors.

In the Maggi case from 2012, the Russian subsidiaries of two consumer goods giants – Nestlé and Unilever – were in dispute over the incorrect comparison of cooking-stock cubes and flavourings. Nestlé (the owner of the Maggi brand) initiated an action against Unilever (the owner of the Knorr brand) claiming that the slogan used in Unilever's TV commercial, "Knorr – True Taste. No Magic", contained an incorrect comparison of the two products, constituted inappropriate advertising and discredited Nestlé's business reputation. Three Russian courts dismissed the claim and ruled that Nestlé was not able to prove the infringement of its rights and interests by the disputed TV commercial nor that the challenged advertising was inappropriate or denigratory. The courts also stated that the mere similarity between the two words ('Maggi' and 'Magic') did not constitute incorrect comparison.5

Interestingly, before the Maggi case the Russian courts had considered similar situations where the slogans contained words similar to famous brands, and in those cases it was held to be an incorrect comparison and false advertising, and advertisers were banned from using such slogans.6

3. Online behavioural advertising

Online behavioural advertising in Russia is not regulated by the Advertising Law. However, the general principle set forth in Article 23.2 of the Russian Constitution guarantees privacy of correspondence and other communications. In addition, the federal law "On Personal Data" (hereinafter the Personal Data Law) provides for protection of certain types of information by which an individual can be identified. Unauthorised use of such data, including in online advertising, can result in administrative liability in the form of a fine. The Federal Supervision Agency for Information Technologies and Communications (Roskomnadzor), a state body responsible for enforcement of the Personal Data Law, is entitled to initiate administrative proceedings against and impose an administrative fine on an infringer.

Despite the lack of specific ruling, the FAS is now paying considerable attention to the activity of internet companies. In particular, in March 2013 it was reported that the FAS sent Google an inquiry saying that the company did not act in conformity with the Russian privacy law while using the information from the Google mail services to target its users with online behavioural advertising. Answering the controlling body's inquiry, Google stated that being a US corporation and having no servers in Russia it does not have to abide by the Russian Personal Data Law. However, although no court action has followed, this case shows growing attention of the enforcement body to the activity of internet companies with respect to online behavioural advertising. The FAS suggests changing current situation by amending the Personal Data Law so that foreign companies will also be obligated to abide by its rules.

4. Sales promotions

Sales promotions are not specifically regulated by the Advertising Law; the Russian courts apply general principles in the prohibition of false and inaccurate advertising. For example, the Arbitrazh Court of Moscow held that the advertising on the building face of the upscale TSUM store and on the store's website of 30% and 50% discount created the impression that the discount applied to all goods offered for sale in the store, whereas in fact the discount only covered items from the previous collection. Based on the circumstances the court came to the conclusion that the seller distributed misleading advertising containing inaccurate information on the price of the goods sold, which misguided customers.7

Despite the foregoing, Federal Law 138-FZ dated November 11 2003 "On Sweepstakes" (hereinafter the Sweepstakes Law) provides a rather detailed regulation of promotional sweepstakes. Promotional sweepstakes are subject to prior notification to the tax authority, which is responsible for overseeing the sweepstakes activity. Such notification should contain information on each sweepstake type and territory, the entity organising the sweepstake and the promoted goods/services. The sweepstake organiser should also submit an overview of the terms and conditions of the sweepstake, ways of informing potential participants, procedure for the prize draw, and other matters.

A number of other requirements should be satisfied in order to avoid liability by the sweepstake organiser. For example, promotional sweepstakes cannot be conducted with the use of automatic equipment (lottery machines) – this measure is aimed at eliminating illegal gambling activity, which is restricted in Russia.

Other promotional events that do not fall under the criteria of promotional sweepstakes are not expressly regulated by Russian law. Certain requirements are set forth in Article 9 of the Advertising Law, providing that the advertising for promotional events, including promotional sweepstakes, should contain information on the time period of the event and the source of detailed information on the promotional event.

With regard to promotional sweepstakes, of practical concern is compliance with the administrative requirements. For instance, in the Makfa case, the consumer goods company Mafka was held liable for organising a promotional sweepstake when it was not allowed by the Russian Federal Tax Service due to an incomplete set of documents having been submitted by Makfa.8

Attention should also be paid to advertising promotional ('promo') events. For instance, in the Viktoria case, the large Russian retail chain Viktoria was fined by FAS for failing to provide consumers with all the necessary information on the details of a promo event. Viktoria argued that in their advertising the sources of all necessary information were indicated (website, phone numbers etc). The courts found no infringement in Viktoria's actions, stating that the Advertising Law allows the indication only of sources of necessary information in promo events advertising.9

5. Ambush marketing

With respect to the regulation of ambush marketing, attention should be paid to the general prohibition imposed by the Advertising Law by which the use of a third party's means of individualisation or the official symbols of international organisations is not allowed. In addition, advertisers should observe the prohibition of unfair competition imposed by the Advertising Law and the Competition Law.

There is also an express prohibition on use of the Olympic Games symbols without receiving a licence from the relevant Olympic body, as set forth in the federal law "On Organising and Conducting the XXII 2014 Winter Olympic Games and XI Winter Para Olympic Games in the City of Sochi ..." (the Olympic Law). This measure, aimed at protecting the interests of the Olympic Games sponsors, is set forth in Article 6.3 of the Olympic Law, under which advertising containing false information on the advertiser's relationship to the Olympic Games or on its sponsorship status with respect to the Games is deemed unfair advertising.

In a majority of the cases, the Russian courts have decided against companies using in their advertising the Olympic symbols or the designations identical or similar thereto. A rare example of alternative court practice is the Tekhnograd case from 2011, in which the court found for the advertiser. In its ruling, the FAS stated that in the disputed advertising the images of the goods sold by Tekhnograd were arranged in a way that created an image similar to the official symbol of the Vancouver Winter Olympic Games of 2010. The court disagreed with the FAS and stated that the FAS had failed to prove that the claimed similarity led consumers to think that the company had affiliation to and relations with those Olympic Games organisers.10

However, contrary to the Tekhnograd case, in a case from 2012 the court decided against General Motors Company and ruled that it had illegally used the Olympic symbol in its trademark 'Olympic White' for the colour of its Chevrolet cars.11

Note: This article originally appeared as a chapter in International Advertising Law: A Practical Global Guide, published by Globe Law and Business, May 2014.

Footnotes

1 Ruling of the Federal Arbitration Court of the Povolzhsky Region dated August 2 2012 in Case A12-19634/2011.

2Ruling 17 ÀÏ-1375/2010-AK of the 17th Arbitration Appellate Court dated March 31 2010 in Case A60- 52973/2009.

3 Ruling of the 1st Arbitration Appellate Court dated April 3 2009 in Case A39-4189/2008.

4 Ruling KA-A40/178-09 of the Federal Arbitration Court of the Moscow Region dated February 13 2009 in Case KA-A40-27553/08-96-130.

5 Ruling of the Federal Arbitration Court of the Moscow Region dated July 4 2012 in Case A40-64553/11-26-476.

6 Decision of the FAS Russia Committee on infringement of the Advertising Law by OJSC Deka (advertising of NIKOLA full sour) dated August 17 2007 in Case ÐÖ.08.07.31; and ruling KA-40/593-06 of the Federal Arbitration Court of the Moscow Region dated March 13 2006 in Case A40-41170/05-147- 317 (advertising of croutons).

7 Decision of the Arbitrazh Court of Moscow dated January 25 2012 in Case A40-143417/10-153-966.

8 Ruling KA-A40/16755-10 of the Federal Arbitration Court of the Moscow Region dated January 14 2011 in Case A40-44495/10-149-287.

9 Ruling of the Federal Arbitration Court of the North-West Region dated November 23 2012 in Case A21-3005/2012.

10 Ruling of the Federal Arbitration Court of the North-West Region dated May 23 2011 in Case A56-37558/2010.

11 Ruling of the Federal Arbitration Court of the Moscow Region dated September 10 2012 in Case A40-105222/11-144-932.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Global Advertising Lawyers Alliance (GALA)
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Global Advertising Lawyers Alliance (GALA)
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions