1.5 Regulatory environment
1.5.1 SPECIFIC REGULATIONS APPLICABLE TO THE GROUP
Since the Group operates in a large number of countries, it deals with stringent and complex regulations put in place by various national and international authorities and organisations.
In the book publishing and distribution sector, the Group is subject to specific local regulations in the countries where these businesses are carried out, including in terms of intellectual property rights, legal copyright registration requirements, rules governing the pricing of books, and VAT rules. In France, for example, the Group’s businesses are subject to regulations imposing a fixed book price set by the publisher or importer, which restrict any qualitative or quantitative discounts granted to distributors. Further regulations also apply to publications for children and young adults and to broadening access to out-of-print books.
Laws and regulations on copyright, libel and slander, image rights and privacy, apply notably to Lagardère Publishing (book publishing) and to Lagardère News (press and audiovisual).
The radio broadcasting activities are subject to broadcasting regulations. In France, this concerns (i) the Law of 30 September 1986 and its enabling decrees; (ii) the inter-industry agreements relating in particular to government oversight (see paragraph 1.5.2 below); and (iii) broadcasters’ contributions to audiovisual production and the terms and conditions governing their implementation.
Lagardère Travel Retail’s marketing activities must comply with certain specific local regulations in the countries where these activities are carried out, principally those applicable to the sale of print media, foodstuffs, tobacco, alcohol and duty-free products (which may be governed by conventions signed with the local customs authorities), and transport operations. In France, for example, press distribution is governed by the Bichet Act.
The World Health Organization’s Framework Convention on Tobacco Control recommends various measures to reduce the supply and demand of tobacco, in particular, banning or restricting duty-free and tax-free sales of tobacco products to international travellers and banning smoking in public transport and public places.
In response to this Framework Convention as well as to other measures, stricter regulations are being put in place regarding the sale and consumption of tobacco and could thus have an impact on Lagardère Travel Retail’s businesses. Some countries have also introduced environmental protection measures (e.g., recycling certain products) that may affect points of sale.
The Group’s digital businesses are subject to various regulations, both at national level (e.g., French law of 21 June 2004 designed to build trust in the digital economy, and the provisions of the French online retailing consumer code) and at international level (e.g., Regulation (EU) 2016/679 of 27 April 2016, referred to as the General Data Protection Regulation (GDPR), which entered into force on 25 May 2018).
The Group’s advertising activities operate under the aegis of the relevant legislation, in particular restrictions on tobacco and alcohol advertising, online gambling laws, and laws concerning false and misleading advertising.
Lagardère Live Entertainment’s activities are not only subject to intellectual property law, labour law and standards for establishments receiving members of the public, as applicable to this sector, but also to special regulations pertaining to certain professions (entertainment producers, venue operators, etc.).
Any major change in these laws and regulations and/or incidents of non-compliance could impact the Group’s businesses and financial position.
1.5.2 AUTHORISATIONS REQUIRED AND COMPLIANCE WITH QUOTAS
Some of the Group’s businesses must obtain or renew licences issued by regulatory authorities.
This is the case for radio broadcasting in France, for which authorisations must be sought for specific periods determined by the French broadcasting authority (Conseil supérieur de l’audiovisuel – CSA) pursuant to the French law of 30 September 1986. They are governed by a convention signed with the CSA and renewed in compliance with the above-mentioned law.
Pursuant to the French laws of 30 September 1986 and 1 August 1986, foreigners and particularly those who are not members of the European Union or the European Economic Area are prohibited from holding, directly or indirectly, more than 20% of the capital of a company that has an authorisation to provide terrestrial radio services in French or a company that publishes works in French. By the same logic, French law 2016-1524 of 14 November 2016 promoting media freedom, independence and pluralism, prohibits the CSA from granting authorisation to operate a French language terrestrial radio service to companies whose capital ownership by non-French entities exceeds a certain threshold.
Violations of these rules on foreign ownership of the media could lead to criminal penalties.
Lastly, certain Lagardère Travel Retail businesses (such as retail tobacco sales, alcohol sales, duty-free warehousing and sales, and transport activities, as carrier or principal) may also be required to obtain prior authorisations in France or in other countries.