Advertising & Marketing 2021

Last Updated October 07, 2021

Czech Republic

Law and Practice

Authors



Randl Partners was founded in 2009 by Pavel Randl and Nataša Randlová, focusing its activities mainly on Czech employment and commercial law, as well as related areas such as marketing, media, IP/IT and personal data protection. Randl Partners is an exclusive member of the Global Advertising Lawyers Alliance for the Czech Republic. The advertising law team involves two partners of the law firm, two attorneys-at-law and is completed by four law students. Randl Partners supports clients in local and international projects; advises clients on all aspects of fair competition, advertising and promotion law, as well as with IP licensing; drafts contracts (such as advertising, agency, advertising service or licence contracts, and business terms); provides opinions on advertising campaigns; reviews rules for sweepstakes and contests; and helps with sales projects and data protection compliance.

In the Czech Republic, advertising is regulated by multiple legal acts which are largely influenced by EU legislation.

The basis of Czech advertising law is the Advertising Regulation Act implementing EU sector-specific regulation.

Further rules apply, based on the:

  • recipient of the ad (such as the Consumer Protection Act);
  • advertising platform (such as Press Act, Radio and Television Broadcasting Operation Act and Audio-visual Media Services on Demand Act); and
  • advertised products or services (such as the Pharmaceuticals Act, Banking Act, Consumer Credit Act and Gambling Act). 

In addition to the above, it is necessary to take into account the data protection laws, in particular the General Data Protection Regulation (GDPR) and the Czech Personal Data Processing Act.

Advertising practices that constitute an unfair commercial practice are regulated from a civil law perspective by the Civil Code.

Ultimately, in the case of a violation of the rules on unfair competition, the Criminal Code and/or of the Act on Criminal Liability of Legal Persons and Proceedings may be applied against them (both natural and legal persons may be convicted).

There are multiple supervisory authorities whose competence is most often determined by the advertised product or service or the relevant advertising platform. Authorities with limited competence include:

  • the State Institute for Drug Control (medicines);
  • the Central Institute for Supervising and Testing in Agriculture (fertilisers and other agriculture-related products);
  • the Agriculture and Food Inspection Authority (food and tobacco);
  • the customs offices (gambling);
  • the Office for Personal Data Protection (protection of personal data and dissemination of electronic commercial marketing materials); and
  • the Council for Radio and Television Broadcasting of the Czech Republic (radio and television).

The authority with competence unrelated to advertised content is the trade licensing offices (where none of the above shall have exclusive authority).

Moreover, municipalities may regulate the placement and distribution of advertising materials.

The most common sanction for violation of any laws regulating advertising is a penalty (penalties are set and imposed in Czech korunas, but for the benefit of an international audience they are given in euros in this chapter). Under the Advertising Regulation Act, natural persons may incur a fine of between EUR3,800 and EUR77,000 and businesses up to EUR192,000.

The supervising authority may also order the unlawful ad to be removed, deleted or discontinued within a specified timeframe. It may also suspend the dissemination of unauthorised comparative advertising or advertising which constitutes an unfair commercial practice.

Last but not least, the role of the courts should also be mentioned in the event of a dispute resulting in the filing of an action or interim measure concerning an infringement of unfair competition law.

In the worst-case scenario, if a violation of the unfair competition rules intentionally causes harm or benefits the perpetrator on a large scale, it cannot be ruled out that such conduct could be considered a criminal offence, which will be investigated by the law enforcement authorities such as the police.

Both natural and legal persons may be held liable for violations of the Advertising Regulation Act.

The law stipulates various offences depending on the type of the offender – whether it is the advertiser, advertising agency, or the merchant processor. A fine may be imposed on either or all of them.

While the advertiser may be exempted from liability upon proving that the advertising agency carried out the advertisement contrary to its instructions, the exemption of the advertising agency is only possible if the truthfulness of the advertisement could not be assessed, even upon every effort being made. The disseminator (merchant processor) may be held liable for the means of dissemination used and for the dissemination of illegal content.

Personal liability of individual owners or shareholders depends on the type of the (business) corporation they are operating.

The only universal advertising self-regulatory body in the Czech Republic is the Czech Advertising Standards Council (CASC). The CASC brings together clients, agencies and the media with the aim of ensuring that advertising is honest, legal, decent and truthful. Its Code of Advertising Practice sets out moral and ethical rules of advertising. The Code is not a legal regulation and is binding only upon the members of the CASC; however, it is widely respected and the CASC is also qualified to provide an expert opinion on the basis of which the competent public authority may impose sanctions.

The public may submit complaints to the CASC, which will subsequently inspect and evaluate such complaints and issue a recommendation decision.

Furthermore, the Association for Internet Progress (AIP) is a self-regulatory body in the field of internet content. The AIP has issued a Code of Conduct for internet advertising along with two supplements, namely:

  • the Rules for Native Advertising; and
  • the Recommended Rules for Co-operation between Influencers and Advertisers.

Violations of soft law (ie, the rules and codes of self-regulatory bodies) are not sanctioned; however, these rules are binding upon their members (including nation-wide TV channels, media houses and other major players) and are widely respected by all other key stakeholders.

If an advertising constitutes an unfair commercial practice (as defined in the Civil Code), the person whose rights were jeopardised or violated by unfair competition or by unlawful restriction of competition may request the violator:

  • to refrain from competing unfairly;
  • to repair a defective state of affairs;
  • to provide adequate satisfaction;
  • to provide compensation for damage; or
  • to provide restitution of unjust enrichment.

The above may be asserted by means of a civil action or through injunctive relief.

The right to have the violator refrain from competing unfairly or repair a defective state of affairs may also be asserted in certain cases by a legal person entitled to defend the interests of competitors or customers.

The following specific industries (with the exception of financial products and services) are regulated by individual provisions of the Advertising Regulation Act; these provisions are detailed or accompanied by industry-specific provisions of the Code of Advertising Practice (not legally binding).

Advertising of certain products – such as tobacco products, medicines and alcohol – is also further regulated by other laws (eg, the Act on Radio and Television Broadcasting Operation and the Act on Audio-visual Media Services on Demand).

Gambling

Three main principles apply to gambling advertising:

  • it must not suggest that participation in gambling may be a source of income in a similar way as earning money from dependent, individual or other activity;
  • it must not be targeted at persons under the age of 18 – in particular, by depicting such persons or using elements, means or actions that predominantly address such persons; and
  • it must contain a statement prohibiting persons under the age of 18 from gambling and a visible and clear warning using the following wording: “The Ministry of Finance warns: Participation in gambling may lead to addiction!”

Alcohol

The advertisement of alcohol is not prohibited in general; however, numerous restrictions apply.

In particular, the advertising must not:

  • encourage the immoderate use of alcohol, or portray abstinence negatively or ironically;
  • be targeted at persons under the age of 18;
  • associate the consumption of alcohol with enhanced performance or with driving a vehicle;
  • give the impression that the consumption of alcohol contributes to social or sexual success;
  • claim that alcohol has medicinal properties or a stimulating or calming effect, or that it is a means of solving personal problems; or
  • emphasise the alcohol content as a positive feature of the beverage.

Health-Related Products

Pharmaceuticals

General rules on advertising of pharmaceuticals are that:

  • only properly registered medicinal products for human use may be advertised;
  • any information contained in an ad must correspond to the information listed in the approved product summary of the medicine; and
  • the ad must support the rational use of the medicine by objectively introducing it without overstating its properties.

Specific rules depend, inter alia, on whether the advertising is targeted at the general public or at experts in the field.

Comparative advertising of medicinal products for human use and healthcare services is allowed where:

  • it meets the conditions set out in the Civil Code; and
  • it is targeted exclusively at experts.

Special provisions apply for advertising of human tissues and cells – in particular, if the purpose or result is to gain financial profit or comparable advantage. Advertising that (i) promotes the donation of human tissues or cells, or (ii) highlights the need for or availability of human tissues or cells is prohibited.

Medical devices and in vitro diagnostic medical devices

Recent amendment to the Advertising Regulation Act has introduced the industry-specific regulation of medical device advertising. As in the case of pharmaceuticals, the regulation varies depending on whether the advertising is targeted at the general public or experts.

In general, only devices that may be placed on the market complying with respective EU and national regulations may be advertised. Also, advertising of medical devices and in vitro diagnostic medical devices may not include any reference to the administration authorities.

Other products aimed at health

Advertising of a product that is not a pharmaceutical, medical device, in vitro diagnostic medical device, or food for specific medical purposes may not:

  • imply that using the product will preserve or improve health condition of the user;
  • imply that not using the product may have negative influence on the health condition of a person; or
  • recommend the product based on the recommendation of scientists, health professionals or other persons, who do not qualify as such but whose anticipated or existing social status could support using the product.

Financial Products and Services

Advertising of financial products and services is regulated by specific provisions included in the Banking Act, Consumer Credit Act, Collective Investments Act and Supplementary Pension Insurance Act.

The Consumer Credit Act in particular contains quite detailed rules on the advertising of consumer credit. In general, it stipulates that when communicating with a consumer, a provider or intermediary may not use unclear, false, misleading or deceptive information. If an offer of consumer credit or its intermediation provides details of the costs, it must also include a representative case.

Food and Infant Nutrition

Nutrition and health claims may be included in food advertising only in accordance with the provisions set out in applicable EU regulations.

Furthermore, food advertising must comply with the Food Act – in particular with the specific conditions on the use of the term "Czech Food’".

Special rules are also in place for the advertising of infant formula and follow-on formula.

The Code of Advertising Practice sets out non-binding rules on the advertisement of food in general, as well as specific rules for advertising targeted at children. Among other things, advertising may not:

  • support excessive consumption of food or cast doubt on the benefits of a healthy and balanced diet;
  • undermine the role of parents in determining a suitable diet for their children; or
  • exploit a child’s imagination (eg, through animation or fantasy features) to promote unhealthy eating habits.

Tobacco

Advertising of tobacco products is generally prohibited, as well as sponsorship whose aim or direct or indirect effect is to promote tobacco products.

This prohibition also includes advertising which does not explicitly mention any tobacco product, but which uses the trademark, emblem or other characteristic hallmarks of a tobacco product, and also any business communication whose direct or indirect effect is the advertising of tobacco products.

Exceptions from the above general prohibition apply in particular to advertising in specialised shops or specialised media; however, further specific rules must be followed.

E-cigarettes

The regulation prohibits:

  • ads whose aim or direct or indirect effect is to promote e-cigarettes or their refills, disseminated by various means (an exception is made for publications dedicated to professionals involved in the e-cigarette trade, where such publications are not primarily targeted at the internal EU market); and
  • any form of event sponsorship whose aim or direct or indirect effect is the promotion of e-cigarettes and their refills if the event is held in multiple EU member states or if it otherwise has a cross-border effect.

Others

Other industries with further regulation include funeral services, firearms and ammunition, plant protection products, veterinary pharmaceuticals, and temporary accommodation and other recreation services.

As consumer protection is a hot topic, a new bill amending the Energy Act is currently being discussed in the Chamber of Deputies. The bill is aimed to strengthening the position of consumers against the so-called šmejdi (this term may be loosely translated as “crooks” and is used in general for sellers who try to use tricks, manipulation, pressure and often illegal practices to extort money from senior citizens for low-quality and overpriced goods, in this case a disadvantageous change of energy supplier). Among other things, customers should newly be able to contact the Energy Regulatory Office in the case of any such problem (regardless of whether with a reseller or a final supplier), and a professional qualification should be necessary for offering supplier changes.

The regulation of advertising of medical devices and products aimed at health had largely been missing in the Czech Republic. However, a new Regulation came into force in May 2021. The new Regulation may affect a large number of products that are related to healthy lifestyles or the use of which is recommended by healthcare professionals or celebrities/influencers. The law focuses on, for example, frequently used advertising practices such as recommendations from experts or celebrities/influencers or deceptive illustrations of body shape changes as a result of the use of a medical device (ie, "before" and "after" photographs).

A recent amendment to the Advertising Regulation Act has introduced the industry-specific regulation of medical devices. This amendment has thus also impacted the medical device industry, with medical devices (facemasks, respirators, tests, etc) related to COVID-19 being the subject of wide discussion, in particular with regard to the recommended use of KN95 or N95 respirators that are not certified under EU regulations.

Furthermore, during the pandemic, the Czech Agriculture and Food Inspection Authority noted numerous false claims used for the advertising of food supplements in relation to COVID-19. The inspectors have found that some sellers used prohibited medical claims and unauthorised health claims when promoting food supplements, specifically by mentioning their alleged effects against coronaviruses. The Inspection Authority thus warned both consumers and inspected persons that food supplements are food (from a legal point of view) and therefore cannot have therapeutic or preventive effects attributed to them in any way, these effects being reserved for medicines.

The same political party has governed the Czech Republic for almost eight years now. As a result of this, the political climate has not changed lately; however, this is not the result of any consistent government policy, but rather of lack of any particular interest.

It may nevertheless be pointed out that the Czech government (in particular the Ministry of Industry and Trade) admitted that the regulation of advertising – in particular social media – should be amended since it is outdated and simply cannot match the speed of development in this field. In this regard, most of the offences in this field should be revealed and enforced by regional trade licensing offices; however, the reality of regulation is far from this ideal, as the trade licensing offices have other work to do and their personal staffing is rarely fit for this purpose. 

Finally, one of the most promising political parties in the upcoming parliamentary elections is the Czech Pirate Party, one point of whose political programme is to legalise psychotropic substances. Based on the triad "Reform-Regulation-Taxation", they seek to enable use of substances that are currently illegal but whose therapeutic potential has been proven.

In order to be permitted, advertising must be fair and comply with the applicable legal regulations. In general, pursuant to the Consumer Protection Act (CPA), a commercial practice is considered to be unfair if “it is contrary to the requirements of due care and substantially distorts or is likely to substantially distort the economic behaviour of the consumer to whom it is addressed or who can be affected by it in relation to the product or service”. The CPA further sets out a detailed and quite extensive list of unfair commercial practices (in relation to consumers).

There are several basic principles that any advertiser should bear in mind when producing advertising materials. In particular, the CPA prohibits misleading advertising in general, meaning the provision of incorrect or false information, or information which is true, but which may mislead the customer in deciding to purchase. Other examples of prohibited unfair practices are:

  • bait advertising (ie, offering products or services at a certain price, even though the seller knows that it will be unable to secure the supply of those or equivalent products or services at the advertised price);
  • a false declaration that the seller intends to close down or relocate; or
  • an indication that a product or service is "free of charge", "gratis", "complimentary" or words with similar effect when this is not the case.

Any claim included in any advertisement has to comply with the general rules of advertising. In particular, claims, whether express or implied, cannot be misleading, deceptive, or false.

Advertising claims that are incorrect or false, or claims that are true but could be misleading or result in the consumer making a decision on the purchase that they would not have done but for the advertising, are considered unfair practice and as such are prohibited by the CPA.

Moreover, advertising claims are also regulated by the Civil Code. It defines misleading advertising as that capable, through its presentation or any other means, of misleading the people it reaches and thus having an impact on their economic behaviour.

On the other hand, use of claims that cannot be objectively measured (ie, puffery) is generally permitted. However, it must be clear that the relevant claims or statements or other forms of expression are puffery, such assessment being made from the point of view of recipients who might be affected by the advertising, in particular taking into consideration their age and ability to recognise the puffery.

There are no rules specifically concerning substantiation of advertising claims. Nevertheless, it is governed by the general requirements, especially by the ones concerning misleading advertising.

Under both the Advertising Regulation Act and the CPA, the supervisory authority is entitled to require the advertiser to submit evidence of the truthfulness of the factual statements (claims) made in the ad, if such requirement is proportionate to the circumstances of the case or the legitimate interests of the advertiser or another person.

If the proof is not submitted, or if it is deemed insufficient, the factual claims are deemed incorrect.

Under the Advertising Regulation Act, the supervisory authority is further entitled to:

  • impose the removal or termination of advertising that is in violation of the law and set out an adequate deadline for such removal/termination;
  • prohibit inadmissible comparative advertising or unfair business practices as an infringement of EU Regulation 2006/2004;
  • suspend the dissemination of unauthorised comparative advertising; and
  • publish its decision and order publication of a corrective statement.

There are no universal standards required for testing as a basis for advertising claims; however, this does not mean that such testing-based claims are completely uncontrolled.

As mentioned in 2.3 Claim Substantiation, the relevant supervisory authority may request proof of the advertising claims. If the proof is not submitted at all or not enough to be sufficient, such unsupported claims constitute an unfair commercial practice under the CPA.

The assessment is stricter in certain fields and the claims made can be subject to further regulation at both national and EU level.

For example, the EU Regulation on nutrition and health claims made regarding foods, sets out requirements on claims and their substantiation in specific fields throughout the Union. Although the Regulation may not expressively use the wording “testing” or “clinical studies” or similar, it is required that the claim is “based on and substantiated by generally accepted scientific data”.

The requirements for clinical studies generally coincide with the rules on testing.

For further information, please see in particular 2.4 Testing as well as 1.6 Regulated Industries and 2.6 Regulated Claims.

Along with specific regulation of advertising for certain industries in the Advertising Regulation Act, the corresponding claims are specifically regulated as well.

Pharmaceuticals, Medical Devices and Health-Targeting Products

There is quite extensive regulation of advertising claims concerning pharmaceuticals and medical devices. In general, the regulation (mostly prohibiting such claims) covers both express and implied claims on the need of professional medical consulting or performance, claims on the effects of the product that could be misleading, claims on the features of the products that could be misleading, or recommendations made by professionals or other persons.

Moreover, EU regulation on health claims is fully applicable.

Food and Infant Formula

Advertising on infant formula

  • may only include scientific and factually correct information;
  • may not imply that the formula is equal to or better than breastfeeding; and
  • may not include terms such as “humanised” or “maternised” or similar expressions giving the impression of breastfeeding being fully replaced.

EU regulation on nutrition and health claims is also fully applicable to food and infant formula.

Alcohol and Gambling

Rules on alcohol and gambling advertising protect the recipients from being misled on the effect of the relevant activity.

Advertising promoting alcohol may not claim that the drink has healing or stimulating or calming effects or that it is a mean of dealing with personal problems.

Similarly, gambling advertisements may not include any claim implying that gambling can be a source of income akin to being employed, running a business or similar activities.

Advertising claims are also regulated by the Civil Code – labelling of goods and services that is capable of causing misleading assumptions that the goods or services come from a particular area or place or a particular producer, or that they are of a specific characteristic or quality, irrespective of where such claim is placed or stated, is deemed to be misleading labelling of goods or services (ie, unfair competition).

Further regulation can be found in sector-specific laws and self-regulatory guidance.

The Civil Code, the Advertising Regulation Act and the CPA define "comparative advertising" and set out the conditions under which comparative advertising may be considered legal. If these conditions are not met, comparative advertising may be considered a misleading practice, unfair competition and, in the worst case scenario, a criminal offence.

Civil Code

The Civil Code specifies two kinds of comparative advertising:

  • direct (eg, where the advertisement mentions the trade name of another competitor, a trademark of its products or services, a depiction of packaging, etc.); or
  • where it indirectly identifies another competitor or its products or services.

Comparative advertising is permitted if it meets the following conditions:

  • it is not misleading;
  • it compares products or services that satisfy the same need or are intended for the same purpose;
  • it objectively compares one or several relevant, important, verifiable and typical properties of goods or services, including price;
  • it compares products with a designation of origin only to products with the same designation;
  • it does not disparage a competitor, its position, its activities, its results or its identification, or unfairly benefit therefrom; and
  • it does not present the advertiser’s products or services as an imitation or copy of trademarked products or services of a competitor, or of the competitor’s name.

Comparative advertising is one of the types of unfair competition that is specified in the Civil Code, which prohibits “conduct in competition which is contrary to the good morals of competition and is liable to cause harm to other competitors or customers”. In order for comparative advertising to be considered unfair and illegal, it must breach one of the aforementioned conditions (see the bullet points) of the Civil Code and fall under the general unfair competition clause specified in the Civil Code as well.

Advertising Regulation Act

Comparative advertising is also regulated by the Advertising Regulation Act, which refers to the Civil Code and sets out special requirements regarding comparative advertising. Comparative advertising of medicinal products for human use, health services medical devices or in vitro diagnostic medical devices is permissible, provided that:

  • the conditions laid down in the Civil Code are met; and
  • the advertising is aimed at persons who are authorised to prescribe or supply such medicinal products or to provide these health services (ie, to experts).

Please see 3.1 General Requirements.

The advertiser may challenge claims made by a competitor in the civil law proceedings (for details, please see 1.5 Private Right of Action).

If the rules set out for comparative advertising of medicinal products for human use, health services, medical devices or in vitro diagnostic medical devices are violated, a fine of up to EUR77,000 may be imposed under the Advertising Regulation Act.

A fine of up to EUR192,000 may be imposed if the comparative advertising is considered a misleading practice under the CPA.

If the social harmfulness of the prohibited comparative advertising is so serious as to constitute a crime (breach of competition rules causing a significant degree of harm to other competitors or consumers, or obtaining an unfair advantage for itself or another to a significant degree), criminal liability may also be established (punishment will depend, in particular, on the damage caused). Criminal liability of legal persons is also possible.

Supervision is undertaken by the bodies listed in the Advertising Regulation Act, depending on how the advertising is distributed and the types of products being compared.

There is not much case-law in the field of comparative advertising. In our opinion, this is a result of rather strict regulation of comparative claims, making advertisers reluctant to use them, and also taking into account that comparative advertising was entirely prohibited in the past. However, it has become more popular in recent years and thus decision-making which will define the boundaries between admissible and inadmissible comparative advertising can be anticipated in the coming years.

Advertising on social media is still a relatively new phenomenon and there is no specific law in the Czech Republic that would regulate it. There is a bill waiting to be discussed in the Czech Parliament which is meant to implement the EU directive on audio-visual media services; however, it is not clear when and whether this bill is going to pass.

Besides the above, advertising on social media is at least partially covered by the general regulations in the Advertising Regulation Act, the Civil Code and the CPA. Moreover, the Audio-visual Media Services on Demand Act may apply where a provider of on-demand audio-visual media services has editorial responsibility for the programme or other content.

As mentioned in 1.4 Self-Regulation, the AIP has issued a Code of Conduct for internet advertising (along with its two supplements) which targets the field of social media as well.

The key principle that governs advertising by social media influencers follows, in general, from the Advertising Regulation Act, which prohibits advertising that constitutes an unfair commercial practice. It must be clear to users that the relevant content is in fact advertising.

This includes where a seller uses editorial space in communications media for the paid promotion of its products or services, without consumers being able to clearly identify from the content, images or sounds of the communication that it is actually an ad (ie, subliminal advertising).

Generally, the scope of liability for advertising is regulated by the Advertising Regulation Act. The advertiser is liable for the content of the ad jointly and severally with its creator, unless it is proven that the advertising was carried out contrary to the advertiser’s instructions. This rule applies to all kinds of advertising, including on social media.

If the advertiser falls within the definition of a "provider of information society services", it could also be held liable for content posted by users of its service. Under the Information Society Act, a provider of information society services (such as on-line markets or discussion forums) is not liable for the content posted by users, provided that:

  • it does not and, with regards to its performance, could not know that the information uploaded by the user, or the conduct of a user, is illegal;
  • had it been informed of the illegality of uploaded content or conduct of a user, it would have had deleted the content; and
  • it does not have influence over the user’s conduct.

By fulfilling all of the above, the provider is exempted from liability. However, a common problem among providers is fulfilling the second requirement. It is therefore necessary to create a functioning system of resolving reports on the (il)legality (in its broadest sense) of content posted on the provider’s site, and to act on the reports.

In general, the same disclosure requirements that apply to advertising in traditional media apply also to social media advertising since there are no specific laws. However, certain specific disclosure instruments, such as reply or additional communication, are provided only in the Press Act (which concerns only periodicals) and the Radio and Television Broadcasting Operation Act (which concerns radio and TV broadcasting).

In the case of social media advertising, the basic requirement is that advertisements have to be labelled visibly and clearly. There are multiple options for such labelling – eg, "paid partnership“, "ad“, "collaboration“, "sponsored“, or "sponsored collaboration“

Any and all information provided to consumers should be in the Czech language. “#ad” may not be clear to the average consumer, in particular for children and teenagers. It is thus recommended to use a Czech equivalent "#reklama“ (ad), "sponzorováno“ (sponsored), "placená spolupráce“ (paid partnership), or "spolupráce“ (collaboration). It is also important that the label be placed visibly and for long enough for the viewer or follower to notice it and read it.

Please see the first paragraph of 4.1 General Requirements.

Under Czech law, native advertising is not specifically regulated. Therefore, the general standards for ads as well as the self-regulation practices should apply.

One section of the CASC Code of Advertising Practice is dedicated to the identification of advertising that resembles editorial content. The Code also sets out rules on personal recommendations in advertising (widely used by social media influencers), which provides the following requirements:

  • ads must not include false personal recommendations or statements in favour of the advertised product – any personal recommendations or favourable statements must be based on the genuine personal experience of the referee;
  • personal recommendations must not include statements or opinions that are incompatible with the Code of Advertising Practice, and must not be used in a manner that might be potentially misleading to the consumer; and
  • personal recommendations must not include any statements regarding the positive effects of the advertised products, unless there is sufficient reliable evidence of such.

The AIP’s Rules for Native Advertising cover only in-feed units as follows:

  • the newsroom may participate only in creating its own content, or content whose topic is determined by an external advertiser financially supporting such media but where the creation itself is done by the newsroom (sponsored content);
  • in order to retain the transparency and credibility of the media, it is always necessary to distinguish any type of PR article or sponsored content otherwise looking like it has been made by the newsroom through the use of phrases such as “commercial attachment”, “sponsored” etc.

These rules are also accompanied by several model cases.

Sanctions are imposed only for a violation of law and will depend on which of the acts was violated. Violations of soft law (ie, the rules and codes of self-regulatory bodies) are not sanctioned.

Due to the lack of hard-law regulation in this field, various self-regulation initiatives have been introduced (or at least attempts have been made) by more or less well-known celebrities and influencers. Maybe the most notable one is ferovyinfluencer.cz (meaning fair influencer), which lays down certain ground rules for social media influencers. Members of this initiative include not only influencers themselves, but also advertisers and agencies. Based on this initiative, these ground rules were incorporated into the Recommended Rules for Co-operation between Influencers and Advertisers issued by AIP (described in more detail in 5.2 Special Rules/Regulations on Influencer Marketing Campaigns).

In relation to social media influencers, the AIP issued its Recommended Rules for Co-operation between Influencers and Advertisers, which were recently updated into the new Influencer Code issued also by the AIP.

The Code provides that if there is a paid or barter business co-operation between the influencer and the contracting authority, the influencer must include textual or aural information on the business co-operation in the content created for these purposes.

It also stipulates that the influencer may receive money or other consideration for the promotion of products and services, or the possibility to keep or use the tested products or services free of charge and that all of the aforesaid fulfils the characteristics of a paid business co-operation and obliges the influencer to follow the rules of the Code. The rules included concern proper labelling of the co-operation, adapting the published content to the target group (eg, taking into account their age), the truthfulness of the experience with the products and services, and compliance with the respective legal regulation and with the AIP’s warning of any violation of these rules.

The AIP rules are only recommendations and serve as a template to be adapted as appropriate by the individual creators of the relevant content. They are not legally binding; however, following them is highly recommended.

The proper labelling of advertisements, being also an important issue in influencer marketing, has been commented on above. In this context, it is important to note the difference between advertising and customer review. While all of the above applies to advertising, customer reviews are not a subject to regulation. The boundary between advertising and customer reviews is, however, very thin. Any conduct which aims at supporting business activity whether done for consideration or any kind or for free, constitutes advertising and must comply with all the requirements set therefor.

Last but not least, by running marketing campaigns, the influencers themselves meet the definition of an entrepreneur as set out by the Civil Code, for they carry out a profitable activity with the intention to do so continuously and to benefit from such. As an entrepreneur, an influencer should get a trading licence and follow the respective obligations, such as paying taxes or, if applicable, getting insurance.

Complying with the relevant regulations is the more important as in the case of any audit or other kind of inspection the conduct is easily traceable.

In general, the advertiser and the advertising creator (in this case the influencer) are jointly and severally liable for the advert’s content, as stipulated by the Advertising Regulation Act.

However, the advertiser may be exempted from liability upon proving that the advertising has been carried out by the influencer differently from the advertiser’s instructions. Therefore, it is necessary for the advertiser’s instructions to be clear and in compliance with the respective regulation.

Although there is no legal duty to monitor or control the influencer, the Influencer Code stipulates that either the advertiser or the influencer shall bring any breach of the Code to the AIP's notice and shall carry out the recommended remedy.

As mentioned above, the most common sanction is a penalty. However, the fines imposed usually amount to hundreds, or low thousands, of euros.

Regulation

The email marketing rules (referred to in Czech law as electronic dissemination of commercial communications) are stipulated in particular in the Information Society Act, and are largely an implementation of EU law.

Under the Information Society Act, all forms of communication, including advertising and solicitations to visit websites, intended to directly or indirectly promote the goods or services or image of a person's business are considered commercial communications.

Three specific rules apply with respect to email marketing (dissemination of commercial communications).

  • Contact details may be used for the electronic dissemination of commercial communications only where the recipient has given their prior consent (in compliance with GDPR).
  • If a (natural or legal) person obtains the contact details of a customer in connection with the sale of a product or service according to the personal data protection requirements, it may use those contact details to disseminate commercial communications relating to its own similar products or services, provided that the customer has a clear and unambiguous opportunity to refuse consent to such use in a simple manner, free of charge or at the expense of that natural or legal person, when sending each individual message, if the customer did not initially refuse such use.
  • The dissemination of commercial communication by email is prohibited if:
    1. it is not clearly and unambiguously marked as a commercial communication;
    2. it conceals or disguises the identity of the sender on whose behalf the communication is made; or
    3. it is sent without a valid address to which the addressee can directly and effectively send the information that they do not wish to receive such information from the sender.

Regulatory Authorities

Supervision in the field of the email marketing is entrusted to:

  • regional trade licensing offices (compliance with the Advertising Regulation Act);
  • the Office for Personal Data Protection (compliance with the Information Society Act, CPA and the GDPR);
  • the Czech Trade Inspection Authority (compliance with the CPA in relation to repeated unsolicited offers); and
  • the Czech Telecommunications Office (compliance with the Electronic Communications Act).

In addition to the sender, the advertiser is also responsible for the dissemination of email advertising. This obligation has recently been clearly confirmed by case law. The advertiser must always be able to provide evidence of consent to the sending of commercial communications for its benefit. In this context, the Office for Personal Data Protection has pointed out that there is strict liability for the dissemination of commercial communications without the consent of the addressees, while the legal obligation cannot be waived by contractual delegation of liability to the sender.

Sanctions

Sanctions for violating rules of email marketing will differ depending on which of the above-mentioned laws was violated. A penalty may be imposed for violation of:

  • the Advertising Regulation Act (up to EUR77,000);
  • the Information Society Act (up to EUR385,000);
  • the Electronic Communications Act (up to EUR1.92 million for legal entities/entrepreneurial natural persons and up to EUR3,850 for natural persons);
  • the CPA (up to EUR192,000); and
  • GDPR (up to EUR20 million).

In the case of a violation of the Civil Code, the means specified in 1.5 Private Right of Action are available.

The most common offence in practice is sending an email with ads without the consent of the recipients – in such cases, sanctions are imposed by the Office for Personal Data Protection. The highest sanction imposed was EUR230,000 – in this case, emails were sent to almost 500,000 recipients and neither the sender nor the advertiser could prove that they had obtained consent.

The provisions of the Electronic Communications Act, Advertising Regulation Act, CPA and the GDPR apply to telemarketing.

The current Electronic Communications Act does not explicitly prohibit unsolicited telemarketing, but restrictive provisions of the Act apply. In particular, it is possible to follow the specific provisions of the Act, under which it is possible to record on a subscriber’s contact listed in the public list that they do not wish to be contacted for marketing purposes. Failure to respect this preference of the subscriber is an offence.

If the telemarketing rules are violated, a fine of up to EUR1.92 million for an entrepreneur and up to EUR3,850 for natural persons may be imposed based on the Act.

In addition to the technical possibility of blocking some incoming calls on your mobile phone, the call recipient may also contact the Czech Trade Inspection Authority, which supervises compliance with the obligations set out in the CPA, as the calls may be assessed as an aggressive commercial practice under the Act.

If the content of the call is stored on a recording device and only subsequently played back by the user, it may be regarded an "unsolicited call" within the meaning of the Information Society Act. Therefore, the rules and sanctions of this law will apply.

Possible Future Statutory Developments

An amendment to the Electronic Communications Act is currently before the Czech Parliament, which would also introduce stricter rules on telemarketing. Recently, a bill amending the Electronic Communications Act was discussed in the Parliament, proposing a complete turnaround of the status quo. At the moment, the companies may call with offers to anyone who has not explicitly registered with their electronic communications service provider that they do not wish to receive such calls. The bill proposes to change the current opt-out regime in favour of an opt-in regime, resulting in the companies being able to contact only the persons who have given their prior consent with such calls.

Text messages are considered as communications aimed at direct or indirect promotion of the image and business of the entrepreneur, and therefore as commercial communications in the sense of The Information Society Act (see 6.1 Email Marketing for further detail).

Each commercial communication must contain a valid address to which the addressee could directly and effectively send the information that they do not wish to continue to receive commercial information from the sender. In the case of text messages, it may be advisable, for example, to include a telephone number indicating that if the addressee no longer wishes to receive commercial communications, a text message can be sent to the relevant telephone number – eg, "stop", or a blank message.

Both the sender of commercial communications and the entity for whose benefit the commercial communications are sent are responsible for the dissemination of commercial communications.

Individuals may be fined up to EUR3,800 and legal persons up to EUR385,000.

The GDPR regulates the conditions for processing personal data, while The Information Society Act regulates the conditions for sending commercial communications by electronic means.

According to the Electronic Communications Act, anyone who intends to use or uses electronic communications networks to store data or to access the data of subscribers or users shall be obliged to inform those subscribers or users in advance of the scope and purpose of the processing and shall offer them the opportunity to refuse such processing. This obligation shall not apply to technical storage or access solely for the purpose of transmitting a message over an electronic communications network or where it is necessary for the purpose of providing an information society service that is explicitly requested by the subscriber or user.

Cookies in the Czech internet environment currently operate on a so-called opt-out basis. However, the Chamber of Deputies has now approved an amendment to the Electronic Communications Act, the purpose of which is primarily to harmonise Czech legislation with the European Electronic Communications Code. Once the amendment is approved, a completely different approach – the so-called opt-in mode – should become the new standard. It would be necessary to obtain the visitor's consent in order to be able to use these tracking tools.

The rules for the use of marketing cookies are to be defined by the new Regulation on Privacy and Electronic Communications. The EU's harmonisation efforts to date have not achieved the desired goal: a directly effective regulation to unify the rules and replace the E-Privacy Directive and national legislation. Although the Regulation was supposed to enter into force together with the GDPR, its approval is still pending.

Use of cookies is also regulated under data protection law and opinions on this matter have been prepared by the Data Protection Office as well as by the European Data Protection Board. According to the European Data Protection Board, cookies and other elements tracking the activity of website users may only be used with the express consent of data subjects.

Violations of the Electronic Communications Act are punishable by fines of up to EUR580,000 or up to 5% of the offender's net turnover for the most recently completed financial year. Fines of up to EUR20 million or up to 4% of the total annual worldwide turnover are imposed for breaches of the GDPR. In practice, the fines imposed by the Czech supervisory authorities are much lower, rather in the order of hundreds or thousands of euros.

According to the Advertising Regulation Act, if advertising concerns persons under the age of 18, it must not:

  • encourage behaviour detrimental to their health, physical or mental development;
  • take advantage of the special trust put in their parents, legal representatives or other persons;
  • inappropriately show them in dangerous situations.

Moreover, the Consumer Protection Act sets out a detailed and quite extensive list of prohibited unfair commercial practices, including advertising directly encouraging children to purchase the marketed goods or services or to convince an adult person to purchase the said for them.

Based on the self-regulatory principles and the decision-making practice, advertising concerning children may not imply or implicate a breach of duty or loyalty to certain persons if the marketed goods or services are not purchased.

Aside from the principles mentioned in the previous paragraph, there are also other quite detailed self-regulatory rules regarding ads for children.

According to the GDPR, children merit specific protection with regard to their personal data, as they may be less aware of the risks, consequences and safeguards concerned, and their rights in relation to the processing of personal data. Such specific protection should, in particular, apply to the use of personal data of children for the purposes of marketing or creating personality or user profiles and the collection of personal data with regard to children when using services offered directly to a child. The consent of the holder of parental responsibility should not be necessary in the context of preventive or counselling services offered directly to a child.

Contests and sweepstakes are generally permitted, as long as they do not constitute an unfair commercial practice.

The basic rules that need to be taken into account when structuring a chance-based game/skill-based contest are stipulated in the Civil Code and the Consumer Protection Act. Moreover, personal data protection rules (GDPR), advertising law (Advertising Regulation Act) and tax issues (Income Taxes Act and Gambling Tax Act) should also be considered.

Should the game/contest meet the definition of gambling (ie, game/bet/lottery in which the player places a bet, the return of which is not guaranteed, and where winning or losing depends in whole or in part on coincidence or chance), further rules shall apply as stipulated by the Gambling Act.

In any case, clear and comprehensive rules in the Czech language should also be provided to all entrants.

Special regulation is in place for consumer competition – under the CPA, a competition it is considered to be consumer competition if it fulfils the following conditions.

  • It is a competition, survey or other event organised for consumers that is directly connected to the promotion/offer/sale of a product or service.
  • The seller undertakes to pay cash or non-cash prizes to participants identified at random.
  • Participation in the competition depends on:
    1. the purchase of a certain product or service;
    2. the conclusion of a contract with the seller; or
    3. the consumer’s participation in a marketing action of the seller.

Contests of skill are generally governed by the same rules as other sweepstakes. The main difference between contests of skill and games of chance occurs when assessing whether they meet the definition of gambling – if the outcome depends in whole or in part on a coincidence or chance, it is a gamble (provided that other conditions of a gamble are met as well). If the coincidence and/or chance is fully eliminated and the outcome depends exclusively on skill, the contest does not fall within the scope of the Gambling Act.

Even if contests of skill do not meet the definition of gambling, they are still governed by the relevant provisions of the Civil Code.

There is no registration or filing required to offer a skill-based contest or chance-based game not falling under the scope of the Gambling Act.

Specific registration/publication requirements are set out for games falling under the scope of the Gambling Act, depending on the type of game.

A lottery/odds bet/totalisator game/bingo/technical game/live game all require a basic licence to operate gambling. Basic licences are issued by the Ministry of Finance upon meeting specific conditions, including payment of an administrative fee and provision of a deposit of between EUR192,000 and EUR1.92 million.

Bingo/technical games/live games must be operated in a special gambling premises (gaming room or casino) and for that purpose, a licence is needed. Such a licence is issued by a competent municipality.

Raffles whose game receipts exceed EUR3,800 and small size tournaments are subject to notification to the relevant municipal authority no later than 30 days prior to the envisaged commencement date of the gambling operation.

In the case of each lottery/odds betting/totalisator game, the operator must notify the customs administration no later than five business days in advance of the moment from which the operation of any such game starts. A similar obligation is imposed upon the operator of a gambling premises.

In addition to the general laws on unfair competition, consumer rights and the basic rules of advertising law, loyalty programmes are subject to the General Data Protection Regulation. Accounting rules are also relevant – as they are not explicitly addressed by the legislation, the National Accounting Council issued a special guidance note in 2020.

Reduced-price offers (bait advertising) are covered by the Consumer Protection Act, stipulating that it is a deceptive business practice.

Further rules have been adopted by EU in the field of consumer protection, in particular applicable to price reductions (such as "Black Friday" sales). These rules should be implemented into Czech law in the upcoming period.

According to the Electronic Communications Act, an entrepreneur providing a publicly available electronic communications service or providing a public communications network shall inform the consumer in the manner chosen for sending the bill, at the earliest three months and at the latest one month before the expiry of a fixed-term contract, of the imminent termination of the contract and of the possibility of its extension. If the subscriber does not give their verifiable consent to the extension of the fixed-term contract, the contract shall become an open-ended contract.

Aside from the above sector-specific regulation, automatic renewal and continuous offers are not separately regulated by the Czech law, yet there are some highly relevant provisions concerning such conduct. These offers have to comply with the consumer protection regulation, mainly the Consumer Protection Act and the Civil Code.

The Civil Code establishes quite an extensive information duty when entering into a contract with a consumer, including – inter alia – information on the length of a contract and the terms of its termination. The contract also has to be clear and comprehensible to the consumer. All terms and conditions must be known to the consumer prior to entering into the contract and provisions establishing disproportion in the rights and obligations of the contracting parties are prohibited.

Sports betting and other forms of gambling are permissible in the Czech Republic.

In general, sports betting as well as gambling is regulated by the Gambling Act and the Civil Code.

The advertisement of gambling is regulated by the Advertising Regulation Act. The three main principles described in 1.6 Regulated Industries apply to gambling advertising.

A special provision of the Gambling Act stipulates that no ads, communications or other forms of marketing may be placed on a building or a publicly accessible part of a building in which gaming premises are located.

The Code of Advertising Practice sets out the applicable self-regulation rules. Among other things, these provide that advertising in this field should be socially responsible and should not encourage excessive betting. There are also several rules relating to minors, which provide that advertising should not be targeted at or depict minors, and should not be placed in media intended primarily for minors.

Supervision in this field is entrusted by law to customs offices, which may impose sanctions of up to EUR192,000 on both natural and legal persons who disseminate, place and process advertising in this field.

There are no rules prohibiting advertising related to cryptocurrencies or non-fungible tokens (NFTs) in the Czech Republic. However, any such advertising has to comply with the general advertising rules laid down by the Czech legislation.

For providing services related to virtual assets, any person would need to obtain a trade licence.

A person providing services related to a virtual asset (the advertiser) is an obliged person under the AML Regulation (Act on Certain Measures against the Legalisation of Proceeds of Crime and Terrorist Financing (No 253/2008 Coll.) and is therefore obliged to comply with this regulation when providing the services offered.

According to the Czech National Bank, cryptocurrencies are not considered money or electronic money. The purchase or sale of cryptocurrencies for one's own account does not constitute a payment service. The exchange (or purchase) of cryptocurrencies for Czech korunas or other currencies also does not meet the characteristics of an exchange transaction. Cryptocurrencies are not considered as an investment instrument under Czech law. Trading in cryptocurrencies therefore does not require the permission of the Czech National Bank (CNB) – nor can the CNB grant any – and is not subject to the supervision of the CNB with the exceptions of:

  • trading in cryptocurrencies derivatives (if they fulfil the characteristics of investment instruments);
  • the management of a fund investing in cryptocurrencies; and
  • the execution of payment transactions in connection with the organisation of cryptocurrencies trading.

The authorisation of the CNB is also not required for the acceptance of payments for goods and services via cryptocurrency.

Randl Partners

Tetris Office Building
Budějovická 1550/15a
140 00
Praha 4
Czech Republic

+420 222 755 311

+420 270 007 311

info@randls.com www.randls.com
Author Business Card

Law and Practice

Authors



Randl Partners was founded in 2009 by Pavel Randl and Nataša Randlová, focusing its activities mainly on Czech employment and commercial law, as well as related areas such as marketing, media, IP/IT and personal data protection. Randl Partners is an exclusive member of the Global Advertising Lawyers Alliance for the Czech Republic. The advertising law team involves two partners of the law firm, two attorneys-at-law and is completed by four law students. Randl Partners supports clients in local and international projects; advises clients on all aspects of fair competition, advertising and promotion law, as well as with IP licensing; drafts contracts (such as advertising, agency, advertising service or licence contracts, and business terms); provides opinions on advertising campaigns; reviews rules for sweepstakes and contests; and helps with sales projects and data protection compliance.

Compare law and practice by selecting locations and topic(s)

{{searchBoxHeader}}

Select Topic(s)

loading ...
{{topic.title}}

Please select at least one chapter and one topic to use the compare functionality.