05 October 2022

Online Advertising Marking in Russia: A Comprehensive Legal Review

October 5, 2022

BRACE Law Firm ©

On September 1, 2022, significant amendments to Federal Law No. 38-FZ dated March 13, 2006, On Advertising (the "Advertising Law"), introduced by Federal Law No. 347-FZ dated July 2, 2021 (the "Law No. 347-FZ"), came into force. Pursuant to these amendments, Roskomnadzor shall maintain a detailed accounting and "marking" of online advertising.

In practice, this accounting will be conducted in two directions:

by applying an identifier to advertising materials placed on the Internet;
by transferring information to Roskomnadzor regarding advertising distributed via information and telecommunications networks (the Internet).

This article examines these innovations in detail and the issues that advertisers and advertising distributors will face.

Who Will the Innovations on Providing Advertising Information to Roskomnadzor Affect, and What Information Is Subject to Accounting?

Advertisers, advertising distributors, and advertising system operators that have placed advertising on the Internet aimed at attracting the attention of advertising consumers located in the Russian Federation, and which meet the criteria determined by the Government of the Russian Federation, are now obliged to provide information or ensure the provision of information regarding such advertising to Roskomnadzor.

Government of the Russian Federation Decree No. 948 dated May 25, 2022, approved the following criteria as the basis for providing information to Roskomnadzor:

advertisers that are legal entities, individuals, or individual entrepreneurs, except for advertisers that possess exclusive rights to the objects of advertising and (or) are manufacturers or sellers of goods, provided that the advertising distributors or advertising system operators are obliged to provide information on the advertising distributed on the Internet to Roskomnadzor or an advertising data operator as part of their contractual obligations with such advertisers and (or) persons authorized by the advertisers;
advertising distributors and advertising system operators that are legal entities, individuals, or individual entrepreneurs and carry out and (or) organize the distribution of advertising on the Internet for any advertisers that are legal entities, including advertising distributed on the Internet in the form of banners, text or text-graphic blocks, video clips, audio recordings, and audio and (or) video live broadcasts;
advertising distributors that are owners of social networks, audiovisual services, news aggregators, or organizers of information distribution on the Internet, including organizers of instant messaging services and search engine operators, as defined in accordance with the legislation of the Russian Federation on information, information technologies, and information protection.

Thus, if the possession of exclusive rights to the object of advertising cannot be proven, the requirement to provide information about advertising to Roskomnadzor applies to virtually all advertisers and advertising distributors, as well as advertising system operators, with the exception of social advertising operators.

The composition of information subject to accounting was approved by Government of the Russian Federation Directive No. 1362-r dated May 30, 2022. According to this legal act, the following information about advertising is not subject to accounting:

information about advertising of an entity’s own products distributed by the advertisers, advertising distributors, or advertising system operators themselves and (or) by persons belonging to the same group of persons as such advertisers, advertising distributors, or advertising system operators, by sending it to email addresses or as electronic messages sent via the Internet to groups of users;
information about advertising that is distributed or was distributed on the Internet as part of television and radio programs without changes compared to terrestrial, satellite, or cable broadcasting — specifically, in the same sequence, form, and volume as such advertising is or was previously distributed via terrestrial, satellite, or cable broadcasting — as well as information about the advertiser, advertising distributor, or advertising system operator that distributed or organized the distribution of such advertising on the Internet.

The following information about the advertiser is subject to accounting:

name and legal form;
Taxpayer Identification Number (INN);
Primary State Registration Number (OGRN);
location and address;
surname, first name, patronymic (if any), and the position of the person entitled to act on behalf of the legal entity without a power of attorney;
information about the person who entered into a contract with the advertising distributor, advertising system operator, or their representatives and intermediaries at the expense and on behalf of the advertiser and (or) for the provision of services (works) using the advertising system, or acting on behalf and at the expense of the advertiser, including: a description of the actions performed, such as entering into contracts, actions for the purpose of distributing advertising, commercial representation, or other mediation;
full and abbreviated name (if any); location and address;
information on identified inconsistencies in the information provided by the advertiser to the advertising data operator or directly to Roskomnadzor regarding advertising distributed on the Internet (if any);
information on established facts of non-compliance by the advertiser with the requirements for the distribution of advertising on the Internet (if any).

The following information about the advertising is also accounted for:

information intended to ensure the traceability of advertising distribution on the Internet using unique numerical designations of the distributed and (or) distributed advertising;
a general description of the object of advertising in the Russian language;
the primary type of advertising campaign on the Internet, determined based on:
- a cost equal to the product of the number of consumer actions defined by the advertiser and the cost of one consumer action;
- a cost equal to the product of the number of advertising impressions to consumers and the cost of one impression;
- a cost equal to the product of the number of instances of access (clicks) by consumers to information about the object of advertising or the object itself and the cost of one instance of access;
- another type of advertising campaign on the Internet, including those related to the specifics of its cost formation;
information on the means of distribution used for advertising on the Internet (website and (or) website page, information system, or computer program), as well as advertising systems (if an advertising system is used);
information on the volume and distribution of advertising impressions on the Internet, as well as facts of access (if any) via such information resources, and the volume of advertising impressions and facts of access (if any) using advertising systems and the distribution of such impressions and facts of access between advertising systems;
information on the form of advertising distribution on the Internet, including all types of banners, text or text-graphic blocks, all types of video clips, audio recordings, and live audio and (or) video broadcasts;
the period of advertising placement or the start date of the advertising campaign in the case of placing advertising as part of copyrighted works in the form of a text or text-graphic block, video clip, or audio recording;
advertising audience parameters, taking into account gender, age, territory of residence (location), and other socio-demographic differentiation parameters (if such information is available);
information on the contract(s) concluded between the advertiser, and (or) advertising distributor, and (or) advertising system operator, and (or) their representatives and intermediaries, for the distribution of advertising on the Internet and (or) the provision of services (works) using the advertising system, including: details of the parties to the contract(s) as part of the data from Russian and foreign state and trade registers regarding advertisers, advertising distributors, advertising system operators, and their representatives and intermediaries; details of the subject matter of the contract(s); the date and number of the contract(s) (if any); the price of the contract(s) (if any); target audience parameters; and information on the execution of the contract (the date and number of the acceptance certificate(s) for services rendered or another document confirming the provision of services under the contract(s), and its content), including the cost and quantitative volume of the services rendered.

In addition to the requirements above, the innovations to the Advertising Law change the requirements for the content of advertising materials. Pursuant to Part 16 of Article 18.1 of the Advertising Law, advertising distributed on the Internet must contain a "reklama" (advertising) label, as well as a reference to the advertiser of such advertising and (or) a website or website page containing information about the advertiser. An exception to this requirement is advertising placed in television and radio programs distributed via the Internet.

Who Will Perform the Functions of an Advertising Data Operator?

The selection of advertising data operators will be carried out by a special Roskomnadzor commission. According to the Regulations on the Creation and Activities of the Commission for the Selection of an Advertising Data Operator, as well as the conditions for selecting an advertising data operator, approved by Government of the Russian Federation Decree No. 966 dated May 28, 2022, the composition of the commission is approved by the Government of the Russian Federation.

The commission determines the timing of the selection process, reviews applications for participation, conducts compliance assessments, and makes decisions on the selection or refusal to recognize a participant as an advertising data operator. Within 3 business days from the date of signing the commission meeting minutes, it sends information on the results of the selection.

Commission meetings are held at least once a year. Roskomnadzor informs the commission members in writing of the date, time, and place of the meeting at least 5 business days in advance, and provides them with information on the selection participants and the applications received.

Meetings are held in person, including via video conferencing, or in absentia. An in-person meeting is considered valid if at least 2/3 of the members are present. The number of members participating in an absentia vote must also be at least 2/3 of the total membership.

Decisions are made by a majority vote of the members present or participating. In the event of a tie, the chairperson of the meeting has the deciding vote.

The signed minutes of the meeting are sent to Roskomnadzor in hard copy. Roskomnadzor posts the selection results on its official website within 5 business days of signing the relevant minutes.

Government of the Russian Federation Decree No. 966 dated May 28, 2022, also approved the conditions for the selection of advertising data operators. According to these conditions, a participant must be a Russian legal entity directly or indirectly controlled by one or more of the following: the Russian Federation, a constituent entity of the Russian Federation, a municipality, and (or) a citizen of the Russian Federation, or an entity jointly or separately controlled by them. Under this document, control is defined as the ability to determine the decisions made by a legal entity through the direct or indirect disposal of more than 50% of the total number of votes assigned to the voting shares (interests) constituting the authorized capital of the legal entity.

A legal entity that does not meet the requirements above may participate in the selection if such entity is directly or indirectly controlled by:

a legal entity whose shareholder (participant) is an international public benefit foundation;
a business entity of strategic importance for ensuring national defense and state security.

The following mandatory requirements also apply to selection participants:

the participant is not in the process of liquidation and is not subject to bankruptcy proceedings;
the participant's activities have not been suspended under the procedure established by the CAO RF;
the participant has no tax arrears, fee arrears, or indebtedness for other mandatory payments to the budgets of the Russian Federation exceeding 1,000 rubles as of the end of the calendar year preceding the year of application;
the head, members of the collective executive body, the person acting as the sole executive body, and the chief accountant of the participant have no criminal record for economic crimes, have not been deprived of the right to hold certain positions or engage in certain activities related to the production or distribution of advertising, and have not been subject to administrative disqualification;
the participant does not belong to the same group of persons as another advertising data operator under Russian antimonopoly legislation;
the authorized capital of the participant is at least 200,000,000 rubles;
the participant possesses the exclusive right to a computer program designed to establish the fact of advertising distribution on the Internet;
the participant owns or legally possesses the hardware and software necessary for the functioning of the software;
the participant has concluded telecommunications service contracts providing for data transmission and Internet access with speeds of at least 1 gigabit per second with at least 2 different telecommunications operators;
the participant owns a website on the Internet where information about the participant must be posted;
the participant's articles of association limit its activities exclusively to those of an advertising data operator;
the participant has confirmation of the readiness of advertising system operators and (or) advertising distributors — whose total annual volume of services for the distribution of advertising aimed at consumers in the Russian Federation is at least 2,500,000,000 rubles — to conclude contracts with the participant for the provision of information on advertising distributed on the Internet to Roskomnadzor through the participant, provided the participant obtains the status of an advertising data operator.

It is important to note that Roskomnadzor is currently receiving information from entities seeking to perform the role of an advertising data operator. These companies include Yandex, VK, Ozon, MTS, and VimpelCom.

How Will Advertising Data Operators Transfer Information to Roskomnadzor?

According to the Rules for Interaction Between the Federal Service for Surveillance in Healthcare and Advertising Data Operators, approved by Government of the Russian Federation Decree No. 974 dated May 28, 2022, interaction between Roskomnadzor and advertising data operators, advertisers, advertising distributors, and advertising system operators is carried out in the following ways:

transfer by the advertising data operator to Roskomnadzor of information about advertising provided by advertisers, advertising distributors, and advertising system operators to the advertising data operator in accordance with Part 5 of Article 18.1 of the Advertising Law;
provision by the advertising data operator, upon a request from Roskomnadzor within its powers, of information about advertising and the advertising itself in the form in which it was distributed on the Internet, to establish facts of providing unreliable information;
provision of advertising information to Roskomnadzor by advertisers, advertising distributors, and advertising system operators if they provide such information independently;
submission by the advertising data operator to Roskomnadzor of information on inconsistencies in advertising information provided by advertisers, advertising distributors, and advertising system operators during monitoring and analysis;
issuance by Roskomnadzor of requests for advertising information based on the results of processing and analysis, and the provision of responses to such requests by advertising data operators, advertisers, advertising distributors, and advertising system operators;
issuance by Roskomnadzor of notifications to the advertising data operator, advertiser, advertising distributor, or advertising system operator regarding inconsistencies identified during the reconciliation of information provided.

Access to the information system and interaction with Roskomnadzor are carried out through a personal account, which is an integral part of the information system. Access to the personal account is provided via the information system hosted on the official Roskomnadzor website.

Furthermore, advertising data operators, as well as advertisers, advertising distributors, and advertising system operators, are liable for the completeness, reliability, relevance, and timeliness of the information provided to Roskomnadzor.

What Information Can Roskomnadzor Provide to Advertisers, Advertising Distributors, and Advertising Data Operators?

Pursuant to Federal Service for Surveillance in Healthcare Order No. 63 dated April 11, 2022, On Determining the Composition of Information on Advertising Distributed on the Internet Available to Roskomnadzor to Which an Advertiser, Advertising Distributor, Advertising System Operator, Advertising Data Operator, or Social Advertising Operator Is Entitled to Access, and the Procedure for Providing Such Information:

Advertisers, advertising distributors, and advertising system operators may have access to the following information stored by Roskomnadzor:

the general description of the object of advertising;
the primary type of advertising campaign on the Internet;
the period of advertising placement using the advertising system for which access was requested, or the start date of the campaign in the case of copyrighted works (text blocks, video clips, or audio recordings);
the means of distribution used (website, information system, computer program), as well as the advertising system used;
the volume and distribution of advertising impressions on third-party resources used by the operator, as well as facts of access (if any), and the volume of impressions and access using the advertising system;
the form of advertising distribution (banners, text blocks, video clips, audio recordings, live broadcasts);
audience parameters (gender, age, territory, etc., if available);
advertising identifiers;
the contract(s) concluded between the advertiser, distributor, operator, and intermediaries, in the part reflecting contracts concluded directly with the advertising system operator.

The advertising data operator may obtain the following information:

data on advertisers, distributors, and operators that provided information through such operator: the INN of the legal entity, individual entrepreneur, or individual; the OGRN or OGRNIP; the telephone number and (or) electronic payment mean number for foreign individuals; the full and abbreviated name and registration number (or its equivalent) for foreign legal entities; and the country code of registration;
information on advertising sent to Roskomnadzor by the advertising data operator;
information on advertising distributed on the Internet by the advertiser, if such information is requested by the advertiser from the interacting advertising data operator;
information on advertising distributed on the Internet by the advertising distributor, if such information is requested by the distributor from the interacting advertising data operator;
information on advertising distributed on the Internet by the advertising system operator, if such information is requested by the operator from the interacting advertising data operator.

Access to advertising information in the system is provided automatically upon request by the specified persons via the information service on the official Roskomnadzor website.

Roskomnadzor’s Interaction with Other Authorities Regarding Advertising Information

Under the new rules, certain information transferred to Roskomnadzor may be shared with the Federal Tax Service of the Russian Federation (FNS) and the Federal Antimonopoly Service of the Russian Federation (FAS Russia).

According to the rules for interaction with the FNS and (or) FAS Russia, approved by Government of the Russian Federation Decree No. 969 dated May 28, 2022, interaction for the purpose of providing access to advertising information is carried out in the following ways:

the FNS or FAS Russia sending electronic requests to Roskomnadzor for advertising information within their competence, and Roskomnadzor providing access to such information;
Roskomnadzor sending advertising information to the FNS or FAS Russia that has been selected automatically based on parameters specified by the recipients in an information interaction agreement.

Information is provided within the powers of the specified authorities. Thus, with the introduction of this information interaction, the risks of being held liable for violations of competition and tax legislation increase, as the data provided to Roskomnadzor directly concerns the advertising service contracts concluded and the specific content of advertising materials.

Marking of Online Advertising

From September 1, 2022, the distribution of advertising on the Internet is permitted only if the advertising data operator assigns a corresponding advertising identifier. This identifier is a unique digital designation intended to ensure the traceability of advertising distributed on the Internet and the accounting of information about such advertising.

Roskomnadzor Order No. 64 dated April 11, 2022, sets requirements for the software necessary for accounting for advertising distributed on the Internet. In particular, for marking purposes, the software must generate an advertising identifier consisting of 32 characters in the following sequence:

DDMMYYXXXXXXXXXXXXXXXXXXXXXXXXXC, where:

DD (characters 1–2) is the date of identifier generation;
MM (characters 3–4) is the month of identifier generation;
YY (characters 5–6) is the year of identifier generation;
XXXXXXXXXXXXXXXXXXXXXXXXX (characters 7–31) is the advertising data operator's advertising accounting number, which includes the operator's registration number in the register and the serial number of the advertisement received for identifier assignment during the month;
C (character 32) is a check digit.

A number of requirements for advertising marking remain not fully regulated. We anticipate that these issues will be clarified in the near future through relevant legal acts.