Review on Trade Competition & Consumer Protection, Advertisement

and Broadcasting Laws of Federal Democratic Republic of Ethiopia

(FDRE) With Special Emphasis on Trade/ Business Compliance Issues

I. TRADE COMPETITION AND CONSUMER PROTECTION

PROCLAMATION - PROCLAMATION No. 813/2013

Introduction

This proclamation is the one and the primary of the legislatives proclaimed by the FDRE House

of Peoples Representatives with regards to trade competition and consumer protection. It was

published on Negarit Gazeta 21st of March 2014. The law is in place (it has to be taken into

account also that this proclamation repealed the previous one – Proclamation No. 685/2010)

because, it is necessary, in the policy opinion of the Government, to protect the business

community from anti-competitive and unfair market practices, and consumers from misleading

market conducts and prevent the proliferation of goods and services that endanger the health

and wellbeing of consumers, and to ensure their safeness and suitableness to human health in

a sustainable manner, and to create a conducive environment that consumers get goods and

services equivalent to the price they pay, and to establish a system conducive for the

promotion of competitive market. With such aim in mind, it determines powers and duties of

the organs concerned particularly, the organs in charge of investigation, prosecution and

judicial responsibilities, establishes the Trade Competition and Consumers Protection

Authority (hereinafter called the “Authority”) and under it the Federal Trade Competition and

Consumers Protection Appellate Tribunal, promulgates prohibitions, restrictions, exceptions

and exemptions on Trade Competitions and consumer protection to ensure its implementation.

In so doing, the law outlines its provisions on Anti-competitive Trade Practices and Regulation

of Merger on Part Two, Protection of Consumers and regulation of the distribution of goods

and services on Part Three, on the establishment and powers and duties of the Authority,

Federal Appellate Tribunal and other Judicial and Semi-Judicial Federal and Regional Organs on

Part Four, on conducting investigation, on the institution of actions and adjudication on Part

Five, and finally, miscellaneous provisions on chapter seven.

Objective of the Proclamation

In this endeavor, the prime objective of the proclamation was conveyed to be, by preventing

and eliminating trade practices that damage the interests and goodwill of business persons,

protecting the business community from anti-competitive and unfair market practices, and

consumers from misleading market conducts and prevent the proliferation of goods and

services that endanger the health and wellbeing of consumers, and to ensure their safeness and

suitableness to human health in a sustainable manner, and to create a conducive environment

that consumers get goods and services equivalent to the price they pay, and to establish a

system conducive for the promotion of competitive market. The overall and final objective of

the proclamation is declared to be accelerating economic development.

Chapter One: Prohibition of Anti-Competitive Trade Practices

This proclamation enlists four types of trade practices which are subject to legal prohibition and

they will be discussed as follows:

1. Abuse of Market Dominance (Article 5)

As a matter of principle, every business person (both natural and juridical person), either by

himself or acting together with others is prohibited to carry on commercial activity by openly or

dubiously (suspiciously) abusing the dominant position he/she has in the relevant market. Such

person is deemed to have a dominant market position if he/she has the actual capacity to

control prices or other conditions of commercial negotiations or eliminate or entirely restrain

trade competition.

In such instances, a dominant position in the market may be assessed by taking into

consideration of the person’s share in the market or his capacity to set impediment against the

entry of others into the market or other factors as may be appropriate or a combination of

these factors. Of course, the numerical expression of the degree of dominance is something

left by the law to be determined by the Council of Ministers (CMs) by regulation. The “relevant

market” for the evaluation of the dominant position is the market that comprises goods and

services that actually compete with each other or replaceable (‘fungible’ /’Substitute’?) goods

or services.

On this level of discussion, then, the relevant and proper question to be raised may be what the

practical instances (acts) of abuse of market dominance. The proclamation enumerates such

“acts” of abuse of abuse of dominant market position, though not exhaustively.

The particular acts of abuse of market dominance laid down under Article 8 (1)-(7) are

presented as follows:

1. Limiting production, hoarding or diverting or preventing or withholding goods from

being sold in regular channels of trade, against regular trading practice;

2. Selling at a price below cost of production, causing the escalation of the costs of a

competitor, preempt (appropriate all) inputs or distribution channels;

3. Imposing unfair selling or purchase price;

4. Refusing to deal with others on certain terms as though such terms are not

economically feasible to the dominant business person;

5. Without justifiable economic reasons, denying access by a competitor to an essential

facility controlled by the dominant business person;

6. Discriminating between customers, in prices and other conditions in the supply and

purchase of goods and services;

7. a) - making supply of goods or services dependent on the acceptance of competitive or

non-competitive goods or services or

- imposing restrictions on the distribution or manufacture or competing goods or

services or

- making the supply dependent on the purchase of other goods or services having no

connection with the goods or services sought by the customer;

8. Imposing such restrictions as where or to whom or in what conditions or quantities or at

what prices the goods or services shall be resold or exported;

9. Other similar acts specified by regulation to be issued for the implementation of such

proclamation (But such regulation has not yet been issued to this writers knowledge)

Therefore, any business person whether natural person or juridical person (a business

organization), either acting individually or in group is prohibited to commit such acts as

prescribed above.

However, a business person who conducts its business to achieve legitimate business purposes,

especially, doing certain acts for the reasons of maintenance of quality and safety of goods;

leveling with prices or benefits offered by a competitor; other similar reasons specified by

regulation to be issued for the implementation of such proclamation and achieving efficiency

and competitiveness for the purposes of applying provisions of 5,6,7, & 8 above shall not be

regarded as abuse of dominant position in market.

2. Anti-competitive Agreements, Concerted Practices and Decisions of

Associations of Business Persons (Article 7)

According to the proclamation, there are two types of agreements between, concerted

practices of and decisions of associations of business persons. These are horizontal and vertical.

Horizontal relationship is deemed to exist between competing business persons in a certain

market, whereas vertical relationship is deemed to exist between business persons and their

customers or suppliers or both.

As a rule, agreements between or concerted practices by or decisions of an association of

business persons in a horizontal relationship shall be absolutely prohibited if they have the

effect of preventing or substantially lessening competition; fixing a purchase or selling prices or

any other trading condition, collusive tendering or dividing market by allocating customers,

suppliers, marketing territories or specific types of goods and services. However, despite the

fact that such practice and undertaking has anti-competitive effect, the authors/doers may no

longer be held accountable, if the party to such undertaking can prove that any technological,

efficiency or any other pro-competitive gain resulting from it exceeds its anti-competitive

effect.

The second type of agreements between business persons is agreement in a vertical

relationship. Such agreements shall be prohibited when such agreements have the effect of

preventing or substantially lessening market competition; or involves the setting of minimum

resale price. Such undertakings similarly sustain the same exceptions in the case of horizontal

agreements above.

For the purpose of these provisions, mutual understanding, written or oral contracts and

operational procedures, although not legally enforceable are accounted for “agreements”

(“ስምምነት”). “Concerted practices” (“በህብረት የተያዘ አቋም”) are also defined to mean a unified or

cooperative conduct of business persons depicted in a way that doesn’t look like an agreement

and done to substitute individual activity again for the above purpose.

3. Unfair Market Competition (Article 8)

According to the Proclamation, the term “unfair competition” is generally defined to be any act

or practice of trade which is dishonest, misleading, or deceptive and harms or likely to harm the

business interest of a competitor and they are prohibited by it.

In addition, the specific types of acts of unfair competition prohibited are:

a) Acts that cause or likely to cause confusion as regards to another business person, its

activities, specifically its goods or services;

b) Acts of disclosure, possession or use of information, without the consent of the

rightful owner thereof, contrary to honest commercial usage;

c) Any false or unjustifiable allegation that discredits, or is likely to discredit another

business person or its activities, particularly its products and services;

d) Comparing goods and services falsely or equivocally (ambiguously) during

advertisement; (Please read some relevant provisions of Proclamation No. 759/2012

on Advertisement to be reviewed below)

e) Disseminating to consumers/ users, false or equivocal (ambiguous) information

including the source of which is not known, connected to price or nature or system or

place of manufacturing or content or suitableness or quality of goods and services,

with the goal to obtain unfair advantage;

f) Acquiring or attempting to acquire confidential business information of another

through his/her ex-employee for no end and obtaining such to pirate his customers

or to use it for purposes that minimize his/her competitiveness.

g) Any other similar acts specified by a regulation to be issued by Council of Ministers.

4. Regulation of Merger (Article 9)

Merger, for the purpose of this proclamation, shall take the definition of:

- Two or more business organizations previously having independent existence

amalgamate or pool the whole or part of their resources to carry on a certain business

objective.

- Acquisition of shares or securities or assets of a business organization, directly or

indirectly, by a person or group of persons or the business of another person through

purchase or any other means.

Merger of business persons shall be prohibited by the Authority if it is of the opinion and

decides that it causes or is likely to cause a significant adverse effect (of restriction

against) on market competition and eliminates the same. Similarly, an agreement or

arrangement of merger may not come into effect unless obtaining approval from the

Authority after notice was given disclosing the details of proposed merger to it by the

proposing business person and the proposal was investigated thereafter. In another

instance, the authority may approve the merger subject to certain conditions if it is of the

opinion that the likely adverse effect of the merger arrangement on market competition

can be eliminated due to compliance of such conditions.

Nonetheless, an applicant for merger may be granted permit where he/she can justify the

merger by proving gains in this respect cannot be achieved without restricting market

competition or if merger is prohibited and technology, efficiency and pro-competition

gains resulting from the act of merger exceeds its anticompetitive outcomes.

There are also situations on which the authority can revoke the already approved merger

where it’s of the opinion that approval was obtained by false and fraudulent evidence and

without fulfilling the necessary conditions, which will consequently lead to the

cancellation of the merger from business register by the concerned organ (in this case the

Ministry of Trade or Regional Trade Bureaus).

Chapter Two: Protection of Consumers (Article 14)

With a view to put forward provisions on the protection of consumers, the proclamation

follows the scheme of outlining the rights and benefits of consumers, and the obligations to be

complied by business persons offering goods and services for the former with penalties for non-

compliance on offenders too.

Enumerating the rights and benefits of consumers shall be without the scope and purpose of

such review. But it would exactly be within our objective to look into some points relevant to

our company’s trading activities. Habesha as a brewer or a manufacturer does not involve in

retail business and for such reasons many of the obligations appearing in the law does not

concern it, as we do not have direct contact with consumers as in the case of retail shops like

groceries. But this doesn’t mean that we have no any legal obligations to comply with regards

to consumers’ protection.

Here are the general obligations to which we should comply to:

1. Commercial advertisements we announce should not be false and misleading in any

manner;

2. The goods we manufacture should be free of defects;

3. We should avoid committing any unfair and misleading acts in our day-to-day trading

activities;

Particularly speaking, we are obliged by this proclamation to abstain from advertising our

product concerning:

- nature, components and quality of the goods; or

- source, weights, volume, method of manufacturing and expiry date of the goods; or

- quality marks; or

- trademarks and emblem; or

- results expected by using the goods in a false and misleading way.

In addition to that, the following specific unfair and misleading acts are also prohibited by the

proclamation:

- issuing misleading information on quality or quantity or volume or acceptance or source or

nature or component or use of goods may have;

- describing the goods and services of another business person in misleading way;

- failing to sell goods as advertised;

- making false and misleading statements of price reduction;

- applying and attempting pyramid scheme of sale;

- preparing or making available for sale or selling goods and services that are dangerous to

human health and safety or are poisoned or have expired or are impure;

- committing any fraudulent or confusing act in any transaction of good and services;

- making available for sale or selling goods or services without using standard marks while the

use of such standard marks is a requirement.

Chapter Three: Investigative, Judicial and Semi-Judicial Organs and Sanctions for

Violations under this Proclamation

1. Organs with Investigative, Judicial and Semi-Judicial Powers (Article 36)

As was described briefly in the introductory part of this review above, the proclamation

establishes the Authority and Federal Appellate Tribunal. It also mentions that Regional States

may establish Regional consumer protection judicial organs at region level. In addition, the

proclamation puts that criminal jurisdiction relating to criminal offenses in this law is reserved

to Federal and relevant Regional Courts.

The Authority and its Federal Appellate Tribunal were just confined to exercising powers of

investigating criminal cases and prosecuting (instituting) criminal actions to Federal Court by its

Prosecutors (even though, currently both powers are transferred to Federal Police Commission

and Federal Attorney General (by virtue of Proclamation No. 946/2016) respectively by the

new Federal Attorney General Establishment Proclamation) and adjudication of administrative

cases requiring administrative measures and penalties by its adjudicative benches.

2. Administrative Measures and Penalties (Article 42)

Business persons, whether corporate bodies, partnerships or individual traders, are subject to

Government regulation and supervision which is mostly done by making them comply to legal

obligations and refrain from violating rules of prohibitions or restrictions. Administrative

sanctions are specified in the law by two ways. The first one is laying down such administrative

measures as prohibition of merger, revocation of merger approval, cancellation of registration

of merger, banning commercial advertisements which are not in lieu of the health and safety

requirements and with this proclamation, order issuance of correction announcements on such

advertisements (counter advertisements), order the discontinuation or injunction of acts

pronounced inappropriate or unfair, suspend and cancel/revoke business license of the

offender, order the seizure and/ or selling of goods and any other appropriate measures to

reinstate competitive position of a victim. The authority (through its adjudicative benches) also

imposes administrative measures on business persons acting in a way inconsistent with the

proclamation and transgressing its provisions like order the payment of compensation to

business persons which are victims of unfair competition and to consumers for damages they

incurred due to the illegal and harmful transactions of such offenders apart from the

administrative (to be imposed in fines by the adjudicative benches) and criminal penalties to be

discussed below.

In line with this, the authority through its adjudicative benches also imposes administrative

penalty of fines upon business person who violates the provisions and prohibitions regarding

abuse of market domination shall be punished with a fine from 5% up to 10% of his/he/its

annual turnover.

In other instances, if a business person violates prohibitions concerning agreements between,

concerted practices of and decisions of associations of business persons which are provided

under Article 7(1) and (2) shall be fined with 10% of his/her/its annual turnover.

Offenders under Article 8 of the proclamation with respect to unfair [practices of] market

competition shall be punished with a fine from 5% up to 10% of his/he/its annual turnover.

At times when any business person who participates in merger violations of the provisions and

prohibitions prescribed under Articles 9-13 of the proclamations shall be punished with a fine

from 5% up to 10% of his/her/its annual turnover.

3. Criminal Liability and Penalties (Article 43)

This proclamation doesn’t only provide for penalty of administrative nature against violations of

its provisions regarding unfair trade practices, unfair competition and consumers’ rights. There

are also somewhat detailed provisions which entail various criminal penalties.

Those relevant penalties of non-compliance and offences are presented summarized as follows:

1. Failure to observe administrative measure ordered by the adjudicative benches of the

Authority, or penalty ordered by the Federal Appellate Tribunal, or decisions or ordered

by the Federal Supreme Court in its appellate jurisdiction implies with it a penalty of

rigorous imprisonment from 1 year to 5 years.

2. Application of or attempting to apply a pyramid scheme of sale, and making available

for sale or selling goods which is dangerous to human health and safety such as being

below standard, poisoned, expired and impure entails a fine from 7% up to 10% of the

offender’s annual turnover and with rigorous imprisonment from 3 years to 7 years.

3. Violations of prohibitions in the proclamation relating to consumer protection other

than those mentioned on 2 above bring with them a penalty of fine from 5% up to 10%

and rigorous imprisonment from 1 year to 5 years.

4. Violations of provisions other than those mentioned above entails with it a punishment

with fine from Birr 5,000 to Birr 50,000 and simple imprisonment.

5. Opposing, obstructing, or unduly influencing an investigation process of the authority

brings with it a penalty of simple imprisonment.

II. A PROCLAMATION ON ADVERTISEMENT –

PROCLAMATION NO. 759/2012

Introduction

This proclamation puts forward the classifications of advertisements: commercial

advertisements, personal advertisements, public advertisements, and counter advertisements.

As it is clearly seen in our daily professional, business and social life, it is not a covert fact that

advertisement plays an important role in the economic, social and political development of a

nation by influencing the activities of the public in commodity exchange or service rendering

with the effect of establishing healthy market competition in a market-led economy. To the

contrary, an unregulated advertisement activity would most likely have detrimental

consequences on rights and interests of the people and the image of a nation by degenerating

into being contra-market-competitive and denouncing economic development. Curbing this

anti-competitive and anti-development outcome of unregulated advertisement undertakings

would be one of the main goals of such proclamation. To execute such objective the legislator

got it necessary to clearly define the rights and obligations of advertisement agents,

advertisement disseminators and advertisers. With this in mind, the Proclamation provides

both general and particular prohibitions, restrictions and regulations on the advertisement

activities and the powers and duties of Ethiopian Broadcasting Authority which was already

established by Broadcasting Service Proclamation No. 533/2007. These will be discussed

thoroughly in the following sub-sections of this review.

1. Advertisement in General

1.1 Content and Presentation of advertisement (Article 6)

Generally speaking, content and presentation of any advertisement shall:

- not be contrary to the law or moral; (please see on 1.2.1 below for what kinds of

advertisements are deemed to be unlawful and immoral)

- be free from misleading or unfair statements; (for what kinds of advertisements are

defined to be misleading and unlawful and unfair see 1.2.2 below)

- respect the social and traditional values of the society and not infringe the legitimate

interests of consumers;

- describe the true nature, use, quality and other similar information of the product or

service intended to be promoted;

- not undermine the commodities or services of other persons (for detailed provisions see

1.2.2 below);

- protect the dignity and interests of the country; and

- respect professional code of conduct.

In addition to the above prohibition on advertisement in general, any advertisement

disseminated via the mass media shall be presented in a manner that clearly differentiates it

from other programs and may not affect the content of the programs, and should not be

transmitted in the form of news.

1.2 Advertisements Prohibited due to their Content and Presentation

1.2.1 Unlawful and Immoral Advertisements (Article 7)

Advertisements which are regarded by the law as unlawful and immoral are advertisements

that:

contain image, speech or comparisons violating the dignity, liberty or equality of mankind in

relation to language, gender, religion, belief, political or social status;

violate the rules of good behavior or human dignity of individuals, and defames the

reputations of an organization;

undermine the national or regional state’s flag, emblem, national anthem or currency;

undermine the dignity or emotional feeling of physically disabled person or a person living

with HIV/AIDS or suffering from other disease;

instigates chaos, violence, terror, conflict or fear among people;

instigate an action that could endanger the physical or mental health and security of the

people;

causes sound pollution through any sound magnifying machine, which doesn’t comply with

the sound limit set by the appropriate governmental body;

is with obscene (offensive to morality or decency) written message, image, picture, film or

similar presentation;

uses the name, image or photograph of a person without his consent, or artistic or creative

works protected by the law without authorization by the concerned person;

is contrary to traffic safety or environmental protection;

being a commercial advertisement, are presented by wearing defense force or police

uniforms, decorations or insignia;

their content or presentation are prohibited by other laws that promotes the violation of

any law.

1.2.2 Misleading or Unfair Advertisements (Article 8)

Advertisements which are deemed by this proclamation as misleading or unfair in their content

and presentation are advertisements that:

gives false information about the country or place of origin, date of production, nature,

ingredients, weight, volume, use, or acceptance by consumers of a product;

gives false information about the price of goods or service including tax and other lawful

fees or about obtaining copy right or patent right, quality and standard certification or prize

from a recognized body or other related information;

presents a product or a service beyond its real usage, quality, flavor, taste, ingredient,

strength, durability or sufficiency;

promotes a product the expiry date of which is approaching or has already lapsed;

promotes a product or service contrary to the rules of fair trade competition by

undermining :

• those consumers who do not use the product or the service,

• a product or service of a competitor, or

• the capacity or reputation of a competitor by comparing and contrasting it with one’s

product or service with the aim of promoting preference to an imported product or service;

mix local language with a foreign language unless a term taken from the foreign language

has no equivalent in the local language;

is ambiguous - which confuses a product, service or company;

announces the supply of a product or the provision of service freely or a discounted price

while the product is supplied or the service is rendered at its real price;

promises the speculative dividend earnings of shares offered for sale;

promises the awarding of prizes or the provision of guarantees to consumers and fail to do

so after the sale of the products or services;

presents research results or excerpts or quotations from scientific, technical or other

publication as if they have relation with the promoted product or service;

uses false testimony;

contains superlatives such as “the first of its kind”(˝የመጀመሪያው˝), “the only

one”(˝ብቸኛው˝), “for the first time”(˝ለመጀመሪያ ጊዜ˝), “never ever before”(˝ከዚህ ቀደም

ያልነበረ˝) or “unparalleled”(˝ወደር የሌለው˝ ∕ ˝አቻ የሌለው/ያልተገኘለት?˝), if it cannot be

supported by evidence;

any other similar advertisement with misleading or unfair content or presentation.

1.2.3 Special Certification for Advertisement (Article 9(1) and (2))

At times where a mandatory standard requirement should be met for the advertisement of

certain goods and services the advertiser should obtain a prior certificate of competence or a

business license and must not advertise its product without acquiring such certificate or license.

1.2.4 Advertisements Affecting Minors (Article 10)

With the view to protect the feelings, attitude, future, and well-being of minors, the following

advertisements are prohibited, among others:

Advertisements that may harm the attitude, feeling or thinking of minors (This objective has

also got protection under the Broadcasting Service Proclamation on Article 31(1) of course

in a more wider terms) ;

Advertisements which may cause a minor to lose affection or trust in his family, guardian,

tutor, teacher, society or country;

Any other advertisement having similar content or presentation.

1.2.5 Herbicides or Pesticides Advertisements (Article 11)

1.2.6 Lottery Advertisements (Article 12)

1.2.7 Public Advertisements (Article 13)

1.2.8 Counter Advertisement (“የአፀፋ ማስታወቂያ”) (Article 14)

As was defined in the proclamation counter advertisement is an advertisement disseminated to

counter wrong public opinion created by previously transmitted advertisement in breach of this

law or to protect the rights of the victim of such violation by the advertiser (“ማስታወቂያ

አስነጋሪው”), the advertising agent (“የማስታወቂያ ወኪል”) and the advertising disseminator

(“የማስታወቂያ አሰራጭ”).

1.2.9 Advertisement by Sponsoring a Program (Article 15)

Advertisement is transmitted either by way of transmitting it directly through a media or by

sponsoring a certain program in which the name, objectives, service, goods and similar

condition or acknowledgement of the sponsor are advertised or announced.

However, the content or timetable of a sponsored program may not fall under the influence of

the sponsor and, in particular; it may not agitate the sell or hire of the sponsor’s product or

service. This is practically the area of advertisement which is mostly deviating from the

provisions of law by way of advertisement agents and actors/ models directly calling and

agitating audiences to buy and use/enjoy the sponsor’s products or services.

In addition, the time to be allocated for any advertisement may not exceed 10% of the

sponsored program.

Other prohibitions relating to sponsorship of programs for advertisement purpose are:

Programs of discussions of House of People’s Representatives (HPR), news programs and

current affairs programs. But sport, meteorology and business news are exceptions in this

respect as far as they are presented separately from other news.

Nonetheless, children’s program may not be sponsored by a business organization.

2 Means of Transmitting Advertisements

2.2 Advertisement through Broadcasting Service (Article 18)

The main restrictions here are:

1. Discussions of HPR, children’s programs, news and current affairs program, unless

authorized by the copy rights owners, music, drama, or documentary film, or any program

transmitted for more than 20 minutes may not be interrupted by advertisement.

2. The same advertisement of a product or service may not be disseminated more than twice

in a one-hour transmission time.

3. Inserted advertisement (“ተካታች ማስታወቂያ”) may not be included in discussions of HPR,

children’s programs, news and current affairs program.

2.3 Advertisement through Community Broadcasting Service (Article 19)

2.4 Advertisement through Newspapers and Magazines (Article 20)

2.5 Outdoor Advertisement (Article 21)

Outdoor Advertisement as per the definition of the proclamation is any advertisement:

- disseminated by using billboard, electronic screen or moving picture;

- written or affixed to a building or any structure or transport vehicle;

- disseminated by using banner, poster, sticker, brochure, leaflets or fliers;

- disseminated through audio cassette, loud speaker; or

- disseminated through any other related means of dissemination.

According to the law, any person is prohibited to affix, hang, erect or otherwise place outdoor

advertisement on any building, wall, fence, bus station, pole, telecom service equipment or any

other similar structure; any road, highway, railway or public transport; or any place used for

public services.

2.6 Advertisement through Telephone (Article 22)

2.7 Advertisement through Postal Service (Article 23)

2.8 Advertisement through Cinema or Film (Article 24)

3 Prohibited and Restricted Advertisements

3.1 Advertisements Absolutely Prohibited (Article 25)

Advertisements the direct and indirect transmissions of which are absolutely prohibited are

advertisements:

- of any substance classified as narcotic drug by appropriate government body;

- that encourage the direct use of any prescription, medicine or medical appliance;

- of narcotic drug or psychotropic substance;

- of weapon;

- of gambling;

- of illegal product or service;

- of usury (አራጣ);

- of witchcraft (ጥንቆላ);

- of cigarette or other tobacco products;

- having political goals; and

- other advertisements prohibited by law.

3.2 Restricted Advertisements (Article 26)

Advertisements on which restrictions are imposed by the proclamation are advertisement of

liquor with more than 12% alcoholic content. In the case of liquors whose alcoholic content is

more than 12%, their advertisement should not be transmitted directly or indirectly through

any means of dissemination other than outdoor advertisements and newspapers and

magazines which are not published on daily and weekly basis, except by using electronic

screen, microphone, audiocassette, or other audiovisual advertisement.

On the other hand, any advertisement of liquor may not:

- advertise that consumption of the liquor is good for health, brings about individual or

social success, improve psychological or physical strength or provides healing power,

or instigate its repeated consumption or overdrinking;

- undermine or oppose abstention from alcohol addiction;

- concentrate on minors, or use a minor as an advertisement actor; or

- contain other similar messages.

And finally, an outdoor advertisement of any liquor may not be placed within 100 meters

radius of a children care center, school, cinema or theatre hall or a stadium.

4. Possible Obligations of an Advertiser (የማስታወቂያ አስነጋሪ) (Article 27, 28 &

30)

As per Article 27(2) of the proclamation, any advertiser shall have the obligation to submit

evidence requested by an advertising agent or disseminator to verify the accuracy of an

information included in an advertisement. But, if the advertiser is unwilling or unable to fulfill

the requirement specified under sub-article(1)(b) - when requested by the advertising agent

and the disseminator to make adjustment to an advertisement where it breaches the law if

disseminated as presented or (2) of Article 27.

Advertisers also have the obligation to make a copy of a disseminated advertisement and keep

a record of it at least for six months, and provide, at their own cost, a copy of an advertisement

record so kept when requested by the Authority or the appropriate government body in

connection with the enforcement of this Proclamation.

If an advertisement, while being prohibited and restricted by such proclamation, was

disseminated in breach of its provisions, it shall be presumed to have been conducted with the

consent of the advertiser, advertising agent and advertisement disseminator, and they shall be

jointly and severally liable according to their degree of responsibilities, unless proved otherwise

by them.

Concerning the impact of advertisements violating provisions of this proclamation on

consumers, a Consumers’ Association has the right to institute a civil suit on behalf of its

members who have sustained damage as a result thereof.

Any concerned person whose rights are infringed by the dissemination of any advertisement,

other than outdoor advertisement, in violation of the provisions of this Proclamation may

also submit their complaints to the Authority to get order of suspension of the dissemination

of the such advertisement or the dissemination of counter advertisement. But this is in addition

to the right of such parties to institute a suit on the offender with the competent judicial organ.

5. Powers and Duties of the Ethiopian Broadcasting Authority with special

emphasis on Advertisement Transmissions (Article 31)

As we tried to mention on the introduction above, the Ethiopian Broadcasting Authority as a

regulatory Government organ was established by Broadcasting Service Proclamation No.

533/2007. Such proclamation enumerates the duties and functions of the Authority in general

terms and in greater details. The ones we are now attempting to bring into attention here are

the few but the relevant with respect to advertisement compliance provisions of this

proclamation.

So, the following are the major and relevant powers and duties of the Authority concerning

advertisement:

- Examine, suspend and ban any advertisement transmission, other than outdoor

advertisement, disseminated in violation of the provisions of this Proclamation, and

order the dissemination of a counter advertisement;

- transmit to the appropriate government body any information relevant for the

prosecution of any offender who disseminated an advertisement in violation of the

provisions of this Proclamation;

6. Penalties Regarding Violations of Provisions of the Proclamation (Article 34)

Apart from the penalties on persons found guilty of violating provisions concerning trade

license as provided in Article 5(1) and (2) of the proclamation which is punishable under the

Commercial Registration and Business Licensing Proclamation, the law imposes penalties on

all persons participating disseminating advertisements in breach of this law.

Transgressions of certain provisions of the proclamation like those concerning preparing

and disseminating advertisements in the form of news, influencing the contents of a

sponsored program and agitating the sell and hire of a sponsor’s product and sponsoring

programs prohibited by the law are punishable with a fine not less than Birr 10,000 and not

exceeding Birr 100,000.

Whereas, violations of provisions with respect to rules and regulations, prohibitions and

restrictions on contents and presentations of advertisements, unlawful and immoral

advertisements, misleading and unfair advertisements, special certification of

advertisements, counter advertisement, sponsoring a program while advertisement of a

product/services a person produces/renders is prohibited or restricted, advertisement of

liquor with more than 12% alcoholic content, and outdoor advertisement of any liquor

placed within 100 meters radius of a children care center, school, medical or historical

institution, cinema or theater hall or a stadium are punishable with a fine not less than Birr

20,000 and not exceeding Birr 150,000.

Disseminating advertisements Absolutely Prohibited under Article 25(1) are punishable with

a fine not less than Birr 30,000 and not exceeding 250,000.

The penalties the proclamation imposes are not only the ones prescribed above. The law

provides also that the income obtained from the illegal advertisement activity shall be

confiscated, if the accused has been found guilty.

III. A PROCLAMATION ON BROADCASTING SERVICE -

PROCLAMATION NO. 533/2007

Introduction

As it is also confirmed in the preamble of this proclamation, broadcasting service have a

significant contribution to the political, economic, and social development of a nation by

making available the necessary information, education and entertainment programs to the

public. In addition, broadcasting service plays a considerable role in the enjoyment of basic

constitutional rights such as freedom of expression, access to information, education and

entertainment and the right to elect and be elected. And it is within the objective of the

Legislator to ensure the expansion of a high standard, prompt and reliable broadcasting

service that can contribute to political, economic and social development and regulate the

same for the execution of which it established the Ethiopian Broadcasting Authority

(hereinafter called “the Authority”). With this in mind, the law deems necessary to clearly

define the rights and obligations of persons who undertake broadcasting service

(‘licensees’).

However, advertisement, as defined to be a message transmitted to publicize and promote

sales of goods and services, name, logo, trademark or objectives in the two laws

(Proclamation No. 759/2012 and Proclamation No. 533/2007), falls in the general term

“program” especially concerning voice, visual and audiovisual transmissions of

advertisements. And yet, in this review our prime concern is only outline the provisions

relating to advertisement transmissions via radio and television. This is so because, on the

one hand, the terms ‘program’ and ‘advertisement’ are not interchangeable in the sense

that even though advertisements which are transmitted via broadcasting service may be

counted as part of the term program, not all programs are advertisements and, on the other

hand, all advertisements are not transmitted by voice, visual and audiovisual means as

advertisements are also disseminated through Print Media (Newspapers and Magazines),

Telephone, Postal Service, Cinema and film and includes outdoor advertisement (using

billboards, electronic screens or moving pictures) which do not amount to become program

and at the same time will be out of the scope of subject-matters of this proclamation. For

that matter, it would be beyond our scope to deal with all the rules and regulations

concerning persons who undertake broadcasting service (‘licensees’ as they are called in

Proclamation No. 533/2007 and who can also act as ‘advertisement disseminators’ as they

are called in Proclamation No. 759/2012) since our prime goal is to review legal obligations

and trade compliances of business persons as ‘advertisers’ and their penalties for non-

compliance.

Nonetheless, this proclamation will be relevant since it provides for certain provisions for

the regulation of programs in general, and advertisements broadcasted via radio and

television in particular. Therefore, it will be relevant and within our scope to look into

certain provisions of the Broadcasting Service Proclamation.

Rules and Regulations Concerning Advertisement Transmissions via Radio

and Television

1. General Rules on Transmissions of Programs

The general rules which are most likely to have relevance to advertisement are the

following:

- The correctness of the content and source of any program to be transmitted shall be

ascertained.

- Any program intended for transmission may not:

a) violate the dignity and personal liberty of mankind or the rules of good behavior or

undermine the belief of others;

b) commit a criminal offense against the security of the State, the constitutionally

established government administration or the defense force of the country;

c) maliciously accuse or defame individuals, nation/nationalities, peoples or

organizations;

d) cause dissension among nationalities or instigate dissension among peoples; or

e) incite war.

- radio or television transmission programs that may corrupt the outlook of children or harm

their feelings and thinking or encourage them to undesirable behavior shall not be transmitted

at hours during which children normally watch or listen to such programs (from 5:00 o’clock in

the morning to 11:00 o’clock in the evening).

2. Rules and Prohibitions on Advertisements

The proclamation also lays down some provisions regulating and prohibiting advertisements

with typical precision to those stipulated in the Advertisement Proclamation No. 759/2012

reviewed in detail above. They are:

1/ any advertisement shall be transmitted in a manner that clearly differentiates it from other

programs. It shall not also affect the contents of other programs.

2/ commercial advertisement shall be truthful, not misleading and publicize lawful trade

activities.

3/ the transmission of malicious or undermining advertisement on the products or services of

others shall be prohibited.

4/ broadcasting advertisement by interrupting any program the transmission time of which is

not more than 20 minutes or children’s program shall be prohibited.

3. Prohibited Advertisements

Broadcasting the following advertisements shall be prohibited:

1) any advertisement that violates gender equality and that disregards the dignity and Human

rights of women;

2) cigarette and cigarette related advertisements;

3) advertisements related to narcotic drugs;

4) advertisements of liquors with more than 12% alcoholic contents;

5) advertisements that encourage users to buy medicine that cannot be administered without

medical prescription;

6) other advertisements prohibited by law.

Provisions on allocation of advertisement time and sponsored programs are also similar with

those laid down on advertisement proclamation above.

Regarding the penalties imposed by the Broadcasting Service Proclamation, as we can learn

from the Amharic version of the proclamation, licensees are subject to penalties in fine ranging

from Birr 10,000 to 100,000 for violating the above provisions, including confiscation of

properties used for broadcasting where the licensee violated Article 30(4) of the proclamation.

It is to be reminded that the obligations set and penalties imposed to business persons as

advertisers for broadcasting advertisements in Radio and Television in breach of the provisions

of the two laws are those appearing on the Advertisement Proclamation which were discussed

in detail on Part II of this review. And finally, it has to be recalled and analyzed that in times of

advertisement transmissions in breach of the Proclamation No. 759/2012, it is presumed by the

law to have been carried on with the will of all the advertiser, advertising agent and

advertisement disseminator (‘licensee’ in Broadcasting Proclamation) and, therefore, they shall

be liable jointly and severally, until proved otherwise. And in such instances, it is the

Broadcasting Authority who takes the necessary administrative measures such as suspension

and revocation of broadcasting service license besides transmitting to Ministry of Justice (Now

to the Federal Attorney General which was established by virtue of Proclamation No.

946/2016) any information relevant to the prosecution of any offender therefore the criminal

sentences will be pronounced by the competent court according to the two proclamations.