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Last Updated: Friday, 25 May 2007, 09:50 GMT 10:50 UK
EU sets new digital media rules
Child watching TV
The EU directive requires member states to protect minors
European ministers have agreed on new rules for television and on-demand video on the internet, allowing more advertising and "product placement".

The European Commission says the new version of the 1989 "TV Without Frontiers" directive will make the EU's audiovisual market more competitive.

Viewers will have to be informed when product placement - putting a sponsor's product in a TV show - takes place.

The practice will remain banned from children's and news programmes.

The new package also features the country-of-origin principle, meaning that broadcasters are governed by the rules of their home country, even if their programmes are transmitted in other states with different rules.

That principle was left out of the final version of the commission's Services Directive - dealing with service industries across the EU - after months of heated debate.

'Less regulation'

The new Audiovisual Media Services Directive is due to take effect by the end of this year. It has now been backed by the commission, the European Parliament and the member states' governments.

It still allows countries some flexibility to set stricter national rules. The UK's Creative Industries Minister Shaun Woodward welcomed the deal, saying it avoided too much regulation and would lead to more television and online services.

Broadcasters will remain limited to 12 minutes of advertising per hour, but the directive scraps the current limit of three hours per day of advertising.

EU Media Commissioner Viviane Reding said the new legislation "brings Europe's audiovisual policies into the 21st Century, providing a welcome shot in the arm to industry".

"It promises less regulation, better financing for European content and higher visibility to Europe's key values, cultural diversity and the protection of minors," she added.

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