1. Factual background

The subject of this analysis is a marketing model for a physical product based on the use of influencer marketing combined with the environment of the game Minecraft. Online creators promote branded toys containing candy, widely available in retail sale, including in popular discount store chains. The campaign also involves creating and making available within Minecraft virtual counterparts of the promoted products, which function, inter alia, on servers, on maps and through game modifications.

Until now, influencer marketing has relied primarily on the publication of sponsored materials on social media, such as posts, stories or live streams. The marketing model under analysis, however, goes beyond traditional forms of product placement, as it uses the open environment of the game as a space for conducting advertising activities. In this case, the advertisement is not merely an element of a video; it becomes an integral component of the game world with which the recipient can interact.

The recipients of such communications are, in particular, minors. Given how well the attractive environment of Minecraft is matched to the preferences and interests of a young audience, the presented content may significantly influence the purchasing decisions of children and adolescents, which in turn may translate into increased sales of the promoted products, measured even in tens of millions of złoty.

Contemporary consumers remain particularly susceptible to the influence of influencer marketing, because the message created by online creators is often perceived as authentic. Influencers combine entertainment with commercial activity, presenting the promoted products as part of their everyday life or as a natural component of the materials they publish. As a result, recipients may perceive the advertised product as a fragment of the creator’s ordinary activity rather than a commercial communication, which may increase the potential effectiveness of the marketing impact.

The integration of advertising messages with entertainment content may give rise to the risk of exerting undue influence on market decisions, especially where identification of the commercial nature of the message is difficult. The protection of minors takes on particular importance: as market participants with limited experience and a lesser capacity for the critical assessment of advertising messages, they require heightened legal protection.

Another problematic aspect is the regulation of promotional content disseminated in the digital environment, including open-world games and social media. The applicable sectoral regulations on advertising were constructed primarily with traditional media in mind and do not always account for the specific features of modern marketing models. For this reason, the practice of influencer product placement in games has become the subject of increased interest on the part of the Polish Office of Competition and Consumer Protection (UOKiK).

2. Two parallel liability regimes

The practice of influencer product placement in open-world games may give rise to liability on two independent planes – public-law and civil-law. Both regimes operate in parallel, rest on different legal bases and pursue different objectives; accordingly, the application of one does not preclude pursuing liability under the other.

The basis for public-law liability is provided by the Act of 16 February 2007 on Competition and Consumer Protection. Under Article 24 of the Act, practices infringing the collective interests of consumers are prohibited. The competence to conduct proceedings and impose sanctions rests with the President of the Office of Competition and Consumer Protection, whose task is to protect the public interest by eliminating practices capable of infringing the rights of a broad circle of consumers.

In the marketing model under analysis, the potential infringement arises not from the mere fact of promoting a product, but from the manner in which the advertising activities are conducted. The use of the game world as a promotional space, combined with the influencer’s activity, may blur the line between entertainment content and commercial communication. Consequently, the recipient – especially a minor – may be unaware of being exposed to advertising, which hinders the making of an informed purchasing decision. Such conduct may be found contrary to good practices (dobre obyczaje) and in breach of the trader’s information obligations towards consumers.

Marketing materials whose recipients are minors raise particularly serious doubts on the part of the President of UOKiK, given minors’ greater susceptibility to manipulation and unfair practices. In addition to supervising the proper labelling of advertisements on social media, UOKiK also scrutinises conduct that may qualify as aggressive advertising directed at children. Advertisers may not create content which is simultaneously directed at children, direct in character and expressly exhorts minor recipients to purchase a product or to persuade adults to do so.

A practical example of the enforcement of liability under the above regulations is the proceedings conducted against the influencers Wojan and Palion, who publish content devoted to Minecraft, mainly on YouTube. According to the President of UOKiK, the materials posted by the creators could generate purchasing pressure among children by seamlessly combining gameplay elements with the promotion of their own products, such as clothing, school supplies and beverages[1]. For this reason, on 13 July 2026 the influencers were formally charged with conduct capable of infringing the collective interests of consumers. If the infringement is confirmed, UOKiK may impose a fine of up to 10% of the turnover achieved in the financial year preceding the year in which the fine is imposed[2].

Independently of public-law liability, the conduct described may give rise to civil-law liability. In that case, the purpose of the proceedings is not the protection of the public interest, but the protection of the individual interests of parties whose rights have been infringed. An action may be brought both by a competitor and by a consumer, provided the trader’s conduct qualifies as an act of unfair competition or an unfair market practice.

With respect to advertising conducted within the Minecraft environment, particular importance attaches to Article 16 of the Act of 16 April 1993 on Combating Unfair Competition, which governs unfair advertising. If the manner of presenting a product in the game world conceals its commercial character, misleads recipients or exploits the credulity of children, such conduct may qualify as an act of unfair competition. Parties whose interests are thereby threatened or infringed are entitled to the claims provided for in Article 18 of that Act. These include, among others, the right to demand cessation of the prohibited conduct or removal of its effects, compensation for the damage caused, or surrender of unjustly obtained benefits.

Independently of the above, a consumer may also pursue claims under the Act of 23 August 2007 on Counteracting Unfair Market Practices. Such practices include, in particular, the dissemination of unfair information, misleading consumers and the use of surreptitious advertising. Under Article 12, the consumer has the right to demand cessation of the unfair practice or removal of its effects, a price reduction, and compensation for the damage caused, in particular through annulment of the contract subject to the mutual return of performances and reimbursement by the trader of the costs incurred by the consumer in connection with the purchase of the product.

3. An act of unfair competition — what does it consist of in this case?

Assessing the marketing model under analysis from the perspective of the Act of 16 April 1993 on Combating Unfair Competition requires, first of all, determining whether the manner of presenting products in the Minecraft environment, through the creation of their virtual counterparts, may qualify as unfair advertising. Under Article 3 of the Act, an act of unfair competition is conduct contrary to the law or to good practices, if it threatens or infringes the interest of another undertaking or of a customer. One form of such an act is unfair advertising, detailed examples of which are set out in Article 16 of the Act.

The essence of the problem presented by the facts at hand is not the promotion of products by influencers as such, but the manner in which the advertising is conducted – embedding the marketing message into the game’s storyline and presenting it as a natural element of gameplay. As a result, the average recipient may fail to notice that they are being exposed to commercial content, which they may take for an ordinary element of the game world or a spontaneous recommendation by the online creator.

The infringement described above is classified as surreptitious advertising (kryptoreklama), included on the so-called blacklist of unfair market practices. It consists in presenting advertising content in a manner that conceals its commercial character, preventing the consumer from making an informed assessment of the message[3]. With regard to Minecraft, examples of such conduct may include placing the advertised product as an element of the storyline, creating its digital counterpart, or using it as a reward for completing specific tasks. In each of these cases, the advertisement ceases to function as a separate marketing communication and becomes part of the player’s experience. From a legal standpoint, it is precisely this integration of advertising with gameplay that may make it difficult for the recipient to recognise its true character.

The general clause contained in Article 3 of the Act of 16 April 1993 on Combating Unfair Competition obliges undertakings to act not only in accordance with the law but also with good practices. These primarily require conducting business in an honest and transparent manner. A breach of those standards – for instance by concealing the advertising character of a publication – could place undertakings applying higher standards of transparency at a competitive disadvantage and thereby undermine fairness in market competition. With respect to the strategy under analysis, good practices also require the influencer to treat their followers honestly and, accordingly, not to exploit their loyalty and susceptibility to the influence of recommendations.

The possibility of holding a person liable for infringing the above regulations depends, however, on whether the influencer is regarded as an undertaking. Under Article 2 of the Act of 16 April 1993 on Combating Unfair Competition, an undertaking includes, among others, a natural person who participates in economic activity by conducting gainful or professional activity, even as a secondary occupation. Today, the main source of influencers’ income is ceasing to be revenue linked to user engagement with published content; increasingly important are fees earned under advertising contracts, sales of products under their own brands, and the provision of other marketing services. Consequently, given the professional and gainful character of their activity, applying the provisions on combating unfair competition to online creators becomes justified.

Following an analysis of the materials published on the entertainment channels of Wojan and Palion, UOKiK found that their online activity involved practices amounting to hidden and aggressive advertising. The President of UOKiK described the situation as follows: “Meanwhile, the influencers I have charged promote their businesses through social media content based on popular computer games for children. One moment they are narrating the course of the gameplay, and the next they are encouraging viewers to buy backpacks, beverages or T-shirts. The advertising message is woven into content of an entertainment character.[4]” The principal charge concerned the use of marketing strategies blurring the line between entertainment and marketing activities, for example by constructing a storyline in Minecraft featuring virtual counterparts of the Żabka store chain offering an assortment of “Wojanek” or “Palionek” branded beverages.

4. Why does a recognisable creator become a subject of interest for UOKiK?

The basis for intervention by the President of UOKiK is an infringement by an undertaking of the collective interests of consumers, which include, among others, unfair market practices, acts of unfair competition, and failure to comply with information obligations towards consumers. An important point is that the collective interest of consumers is not the sum of individual interests; the President of UOKiK therefore does not protect a specific consumer, but the entire group of recipients to whom the commercial communication is addressed.

Influencers who have built up substantial popularity and influence are subject to particular scrutiny by UOKiK. Content published by digital creators may simultaneously reach hundreds of thousands or even millions of users. An infringement committed by an influencer in such circumstances therefore does not harm a single individual, but may mislead a broad group of consumers, thereby constituting an infringement of the collective interests of consumers.

The principal objective of UOKiK’s activity is the protection of the public interest, not the resolution of disputes between specific parties. As a result, proceedings conducted by the President of UOKiK are public-law and administrative in character. For this reason, the imposition of a fine does not depend on the undertaking’s fault; it is sufficient to demonstrate that the infringement occurred. UOKiK’s sanctions are intended, in particular, to have a preventive character and to encourage companies to implement legal-conformity mechanisms, i.e. compliance. In light of the above, an influencer conducting professional and gainful advertising activity should verify the conformity of their publications with the applicable provisions and guidelines, bearing in mind that lack of awareness of an infringement does not relieve them of administrative liability.

The President of UOKiK has the competence to issue a decision finding a practice to infringe the collective interests of consumers and ordering its discontinuation, in which measures may be specified to remove the ongoing effects of the infringements, such as the publication of a statement in the form and with the content specified in the decision[5]. Such a decision is not issued, however, where the undertaking has already ceased the prohibited practice. To prevent proceedings from being automatically terminated merely by removing the advertising material that breached applicable legal requirements or by subsequently labelling the collaboration, Article 27 introduces a decision finding a practice to infringe the collective interests of consumers and declaring that it has been discontinued. On that basis, the President of UOKiK may still order the undertaking to take specific actions to remove the effects of the earlier infringement.

Where a marketing strategy relies on influencers publishing advertising materials using Minecraft, the infringements typically consist in failing to communicate unambiguously that the content is commercial in character. This requirement is set out, among others, in the Recommendations of the President of UOKiK on the labelling of advertising content by influencers, in which the President of UOKiK emphasises that every commercial collaboration – regardless of the form of remuneration (barter, monetary, or a free product) – should be labelled in a manner comprehensible and clearly legible to the average recipient. Moreover, clearly indicating the advertising character of the message at the recipient’s very first contact with the material is an obligation resting not only on influencers, but also on advertising agencies and advertisers. Two-level labelling is recommended, consisting in the simultaneous placement of a proper disclosure by the author of the publication and the use of the tools offered by the platform for labelling advertising content. The mere use of hashtags – especially in abbreviated form, or forms that do not highlight the fact that the influencer received a benefit, such as #ad, #gifted or #współpraca – may be found insufficient. Preference is given to annotations that are clear to recipients and legibly indicate the commercial character of the content, such as #reklama (#advertisement), #prezent (#gift), #autopromocja (#selfpromotion) or #współpracabarterowa (#bartercollaboration).

5. Directing communications at children – the strictest regime

The principal problem for businesses interested in using influencer marketing and open-world games for marketing purposes is the rigorously regulated protection of minor recipients. Advertisers creating content that is by design directed particularly at a young group of potential consumers are obliged to exercise exceptional caution and to take into account additional restrictions arising from the law.

The fundamental role of regulations protecting children against prohibited marketing strategies is evidenced by the inclusion, on the blacklist of aggressive market practices, of advertising containing a direct exhortation to children to purchase the promoted products or to persuade adults to buy them for them[6]. This means that practices of this kind are deemed unfair in all circumstances. When watching, for example, a television advertising block, a child is usually aware of its commercial character. In the case of product placement carried out by an influencer in the Minecraft environment, however, the marketing message is incorporated into the narrative of the gameplay. The young recipient focuses on the course of the game rather than on assessing the nature of the communication, which increases their susceptibility to the advertising’s influence. Beyond hidden promotional messages, it is also prohibited to use tactics classified as aggressive, i.e. influencing the consumer’s behaviour towards a product through pressure or physical or psychological coercion[7].

Examples of communications that raised the doubts of the President of UOKiK and were found to be aggressive are statements made by the influencers Wojan and Palion during their publicly streamed Minecraft gameplay: “Get down to the Żabka stores while these Wojanki are still around.” “Come to Palion Style and order while it lasts, because it’s selling like hot cakes, and school is just around the corner.” “Do you have a box like this? Over 500 people already have one – and you don’t? Come on in, hurry, because school is starting any moment.” These statements are not limited to a neutral presentation of the product. They simultaneously deploy the scarcity mechanism (“while they last”), time pressure (“school is just around the corner”) and social proof (“500 people already have one”), which in the case of minor recipients may lead to manipulation of purchasing decisions that is impermissible under the law.

When publishing advertising content, it must be borne in mind that a child does not possess the capacity for critical analysis of digital content or a level of life experience comparable to the awareness of adults. As a result, conduct which, in relation to adult recipients, could be regarded as a permissible form of marketing communication may, in relation to minors, constitute an unfair market practice.

Owing to the long-term relationships they build with their audiences, influencers commonly come to act as online idols or authority figures. Advertising in the digital environment – for instance within a game – frequently relies on psychological mechanisms characteristic of the information and consumer society, described as the FOMO phenomenon (fear of missing out), compounded by the effect of identification with the influencer or their idealisation, and by pressure resulting from a perceived urgency of purchase and group behaviour. These instruments act considerably more strongly on children than on adult consumers, which provides the basis for a stricter standard for assessing the lawfulness of such practices.

Product placement – the broadcasting regime

In order to reinforce the authenticity of a commercial message, advertisers use product placement, i.e. the natural incorporation of a good, service or trademark into another publication, as an element of the storyline or set design. Product placement is usually better received by consumers than classic advertising, since the promotional message is less intrusive and does not create an impression of direct purchasing pressure. Owing to the greater degree of integration of the advertisement with the presented material, this practice creates conditions conducive to abuse.

The conditions for the admissibility of product placement are set out in Article 17a of the Act of 29 December 1992 on Broadcasting. The practice is acceptable in all programmes, subject however to the specific exceptions provided by the legislator, such as programmes for children. Minors, whose cognitive maturity is not yet fully developed, require reinforced protection against marketing content whose form is less obvious to the recipient. A particularly problematic issue has become product placement in games with an open structure, such as Minecraft. Where the principal entertainment offered by the game is the unlimited possibility of building new worlds and creating the elements that compose them, it is exceptionally difficult to determine whether the actions taken by influencers constitute merely part of the gameplay or already take on the character of paid collaboration.

The protection of recipients is reinforced by obligations imposed on broadcasters. It is prohibited, by means of product placement, to give undue prominence to a product or to directly encourage its purchase through promotional actions. It is also necessary to appropriately mark the programme with a graphic symbol[8]. Product placement is therefore a lawful strategy, provided its transparency is maintained and excessively direct promotional messages are avoided.

This regime, however, covers above all the activity of broadcasters within the meaning of the Act of 29 December 1992 on Broadcasting. An influencer does not, generally speaking, have the status of a “broadcaster”, and the content they publish is not covered by the obligations arising under Article 17a of the Act. Under the current legal framework, the high standard of protection of young recipients covers, among others, television and radio materials; yet where the same content is published by a digital creator, for example as a video on YouTube, only soft-law recommendations apply.

Recognising the growing popularity of mass social platforms, the EU introduced Directive (EU) 2018/1808 of the European Parliament and of the Council of 14 November 2018 amending Directive 2010/13/EU on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the provision of audiovisual media services (Audiovisual Media Services Directive, AVMSD) in view of changing market realities. The act extended the scope of regulation to video-sharing platform providers, which, however, does not mean that the boundary between influencers and broadcasters has been entirely erased. The requirements arising from the Directive focus mainly on platforms’ responsibility for creating mechanisms to protect minors, such as age verification and enabling creators to unambiguously label commercial content. The act does not, however, fully equate online creators with broadcasters in terms of the rights and obligations arising from competition and consumer protection.

A legal gap thus arises which allows influencers to publish content containing product placement directed at children on social media or in the gaming environment discussed here. The very same materials, if presented in the form of a television programme or radio broadcast, would simultaneously be found impermissible and in breach of the Act. The same advertising communication is therefore subject to different standards of scrutiny solely on account of the entity distributing it.

This produces a paradoxical legal situation in which the highest level of protection for minors is provided for content published via traditional media. Under contemporary marketing strategies, by contrast, children and adolescents are most exposed while using online platforms and video games, whose product-placement activity is governed by soft-law instruments such as the guidelines and recommendations of the President of UOKiK or platform terms of service. Article 17a of the Act of 29 December 1992 on Broadcasting should nevertheless serve as a normative benchmark illustrating the level of protection of minors that the legislator considers desirable. The legal gap described – as it reveals the lack of full coherence in protecting children against hidden advertising messages – should form the basis for further amendment of the provisions relating to influencer marketing and commercial materials published on video-sharing and gaming platforms.

Advertising of food and sweets to children – a liberal regulatory model and its limitations

The Polish legislator has not decided to introduce a statutory prohibition on the advertising of food – particularly sweets high in sugar, fat or salt (HFSS – high fat, sugar, salt) – directed at children. The protection of minors in this area takes the form of liberal regulation, based on self-regulatory solutions developed by the media market. The state has thus laid down only a general legal framework, leaving detailed restrictions and rules to the will of market participants, chiefly broadcasters.

Provisions in this area are contained in the Agreement of television broadcasters on the principles of disseminating food advertisements directed at children, in force since 1 January 2015. This self-regulation came into being through the active cooperation of, among others, the National Broadcasting Council (KRRiT), the Advertising Council, the Polish Federation of Food Producers, the Ministry of Health and the television broadcasters who undertook to sign it voluntarily[9]. The Agreement aims to counteract the formation of undesirable eating habits among young audiences and to clarify and extend the duties arising from Article 16a(3a) and (3b) of the Act of 29 December 1992 on Broadcasting. Under those provisions, programmes directed at children should not be accompanied by content advertising foodstuffs or beverages whose excessive consumption may be harmful. KRRiT has, moreover, been granted the competence to designate such foods by regulation, after consulting the minister responsible for health. That body may also indicate preferred ways of publishing advertisements for foodstuffs questioned from a health perspective, so that such messages do not accompany children’s programmes.

Supervision of the operation of this self-regulatory system is exercised by the National Broadcasting Council. The authority analysed the activity of sixteen children’s channels and eight general-audience channels over the period from July 2020 to June 2023. Its key findings, contained in the report “Television channels and programmes for children free of advertisements for sweets and salty snacks”, indicate a high level of compliance with the commitments undertaken by the parties to the agreement. Appropriately constructed self-regulatory mechanisms may therefore sometimes prove equally or even more effective than rigidly imposed hard law. Particularly in relation to a flexible and dynamic media market, greater decision-making autonomy for broadcasters with respect to practical rules may contribute to a more efficiently functioning system.

The protection system is further supplemented by instruments of advertising ethics, in particular the Code of Advertising Ethics and the activity of the Advertising Ethics Commission operating within the Advertising Council. The Code contains guidance on responsibly directing marketing communications at children and prohibits advertisers from exploiting their natural trust and lack of experience[10]. In assessing the admissibility of food advertisements, the principal reference point is the HFSS criterion (high fat, sugar, salt), on the basis of which products are classified as requiring particular marketing caution owing to their content of ingredients potentially harmful in large quantities.

The effectiveness of the self-regulation flowing from the Agreement of television broadcasters on the principles of disseminating food advertisements directed at children is nevertheless limited in both its personal and material scope. The rules bind only the voluntary signatories of the agreement, who are primarily traditional television broadcasters. Moreover, they apply to marketing materials broadcast in television programmes or radio broadcasts falling within the scope of the agreement. Its provisions do not, however, constitute binding guidelines for online creators publishing content on platforms such as YouTube or TikTok, or for persons conducting advertising activity in the computer-game environment. An influencer, remaining essentially outside the reach of the regulations analysed, may thus use Minecraft to present a sponsored toy containing sweets, use it as an element of the gameplay, and so on.

The example described reveals a visible regulatory asymmetry. Advertising of sweets or other foodstuffs questioned from a health perspective, broadcast via traditional media, is subject to a range of extensive restrictions and to the supervision of KRRiT. An analogous communication published by a digital creator using instruments at the frontier of new technologies remains covered only by the general principles of consumer law and the Recommendations of the President of UOKiK.

A model based on the combination of liberal statutory regulation and broadcaster self-regulation therefore does not guarantee full protection of minors, given its mismatch with the way in which the youngest internet users consume content today. Marketing communications concerning food and sweets are increasingly being shifted by advertisers from traditional television to social media and gaming environments, where the existing protective mechanisms have a much narrower scope of application. The resulting regulatory gap constitutes one of the most significant arguments in favour of developing more coherent rules on influencer marketing directed at minors, irrespective of the communication channel used.

Open-world games, crypto and blockchain – the most rapidly developing layer

A relatively significant regulatory challenge is also posed by the use of blockchain technology and economic mechanisms linked to the environment of digital games. The issues of advertising and product placement are already subject to relatively well-established regulation, but areas based on the use of newer technologies remain at a stage of dynamic legislative development. Under the current legal framework, the prevailing part of the provisions in this area merely indicates the desirable directions in which the law should develop, i.e. takes the form of de lege ferenda postulates.

A subject of particular debate is so-called loot boxes, i.e. in-game elements containing randomly selected items or other mechanisms facilitating gameplay. They can be purchased using in-game currency or by paying with real money. Their similarity to games of chance is contested, in particular because the player pays a fee in order to gain access to a previously unknown reward, the value of which depends on chance rather than skill. This kind of exploitation of psychological propensities – human susceptibility to addiction to randomised outcomes and variable-ratio reward systems – provides grounds for the development, among children, who constitute the dominant group of game users, of tendencies towards compulsive and gambling behaviour.

Polish law contains no provision that directly regulates the practice of loot boxes. Of fundamental relevance here is the Act of 19 November 2009 on Gambling Games, Article 2 of which defines games of chance as games offering monetary or material prizes whose outcome depends on chance. Loot boxes, however, are not expressly listed among the games falling within that category, which leaves online creators and game producers facing legal uncertainty as to whether their activity might be found to promote gambling.

Increasingly, elements functioning within computer games do not remain merely digital items used during gameplay. Thanks to blockchain technology, they can be transformed into tokens or non-fungible tokens (NFTs), which exist independently of the game itself and can be traded on external platforms. This practice means that activity conducted within the game environment may begin to fall within the scope of Regulation (EU) 2023/1114 of the European Parliament and of the Council on markets in crypto-assets (MiCA). Where a token is not used solely within the game environment but becomes the object of trading on a secondary market or performs an investment function, it may be deemed a crypto-asset within the meaning of MiCA. Consequently, issuers and entities promoting such solutions may become subject to obligations concerning transparency of information, publication of information documents (whitepapers) and the conduct of marketing communications in accordance with the requirements of the Regulation.

A factual situation thus arises in which the same product may function simultaneously as a physical toy available in retail sale, an item used during gameplay in Minecraft, and a token recorded on a blockchain. Each of these forms is subject to different legal regimes, including consumer law, the rules on counteracting unfair market practices, the Gambling Games Act, digital services legislation, and the crypto-asset market rules arising from the MiCA Regulation.

The case under analysis clearly demonstrates that contemporary legal regulation, both national and European, has not been updated sufficiently to provide advertisers and consumers alike with a clear position in relation to the multi-layered commercialisation model that is now widespread. The dynamic impact of new technologies on traditional legal institutions has created a need to develop more coherent solutions encompassing consumer law and the protection of minor participants in the media market, without divisions into different modes of regulation depending on the entity disseminating the advertising content.

Conclusions

The analysis conducted does not mean that the practice of influencer product placement in the open environment of Minecraft is, under the current legal framework, subject to no regulation at all. Of key importance are, above all, statutes containing general clauses, such as the Act on Combating Unfair Competition, the Act on Counteracting Unfair Market Practices and the Act on Competition and Consumer Protection. The use of the concept of good practices, the prohibition on misleading consumers, and the model of the average recipient of advertising content means that these provisions can impose certain duties even on relatively novel marketing strategies, for instance those employing new technologies. Confirmation of this thesis may be found in the activity of the President of UOKiK, who has brought formal charges against influencers, such as Wojan and Palion, for infringing the legal norms presented above.

Considerably less flexible, by contrast, are the sectoral regulations designed with traditional media in mind. The provisions of the Broadcasting Act, including those on product placement, and the self-regulatory mechanisms relating to food advertising directed at children, are built around the concepts of “broadcaster”, “programme” and “transmission”. These terms correspond to traditional media but do not fit the dynamically growing internet platforms, streaming services and gaming environments of today. As a result, an identical marketing communication may be subject to different standards of protection solely on account of the manner of its dissemination.

A regulatory gap also appears with respect to the protection of minors. Television and radio broadcasters are bound by extensive restrictions, whereas in the social media environment protection rests primarily on self-regulation, guidelines of administrative authorities and platform terms of service. These solutions, though important, do not provide a level of protection comparable to the regulations binding traditional broadcasters.

New monetisation models employing randomised mechanisms, tokenisation of items and blockchain technology in turn create a problematic situation of simultaneous subjection to consumer law, the rules on unfair market practices, the Gambling Games Act, the MiCA Regulation and digital services legislation. What emerges is a multi-layered regulatory system in which a single product or service may be assessed concurrently from the perspective of several separate legal regimes.

Legal change in the areas described could be introduced by extending the sectoral regulations and redefining concepts such as “broadcaster”, “programme” and “transmission” so that they also cover online creators and communications carried out in gaming environments. Alternatively, the less flexible legislative acts could be transformed along the lines of statutes with a broader personal scope, through the use of general clauses.

Given the dynamic development of new technologies, the second path of legislative change appears the more prudent. Statutes based on general clauses display considerably greater durability, as they make it possible to assess new phenomena regardless of the mechanisms employed.

[1] https://uokik.gov.pl/reklama-skierowana-do-dzieci-uokik-sprawdza-media-spolecznosciowe

[2] Act of 16 February 2007 on Competition and Consumer Protection, Article 106.

[3] Act of 23 August 2007 on Counteracting Unfair Market Practices, Article 7.

[4] https://uokik.gov.pl/presja-zakupowa-na-dzieci-zarzuty-dla-dwoch-influencerow-youtubowych

[5] Act of 16 February 2007 on Competition and Consumer Protection, Article 26.

[6] Act of 23 August 2007 on Counteracting Unfair Market Practices, Article 9.

[7] Ibid., Article 8.

[8] Act of 29 December 1992 on Broadcasting, Article 17a.

[9] https://www.gov.pl/web/krrit/krrit-chroni-dzieci-przed-reklamami-tzw-niezdrowej-zywnosci

[10] Code of Advertising Ethics, Article 24.

Artykuł Influencer Product Placement in Open-World Games and Competition and Consumer Protection Law pochodzi z serwisu KIELTYKA GLADKOWSKI LEGAL | CROSS BORDER POLISH LAW FIRM RANKED IN THE LEGAL 500 EMEA SINCE 2019.

Cryptoassets, of which a token is a type, are digital representations of value or rights that can be transferred and stored electronically using distributed ledger technology or similar technologies. There are three types of tokens: payment or e-money tokens, which serve as a medium of exchange or a store of value; investment tokens, which perform functions analogous to securities; and utility tokens, which provide access to services or products, somewhat similar to vouchers. There are also hybrid tokens, for example, combining the features of cryptocurrencies and real-world assets. These tokens operate by embodying the value of a specific real-world asset and combining it with the flexibility and efficiency of cryptocurrencies. The goal is to provide access to blockchain technology while simultaneously providing a solid link to the underlying tangible asset.

Tokenization is the process of converting data or assets (e.g., property ownership) into a digital token, which is a unique string of characters typically stored in distributed ledger technology (DLT), electronic systems or databases for recording information not maintained by a single, specific entity. DLT allows us to store and use data, both decentralized (i.e., stored in multiple locations) and distributed (i.e., stored on interconnected computers). In this way, computers create a network in which each network participant directly shares its resources (computing power, data, or network bandwidth) with all other network members without the need for any central node. Nodes in a network creating a distributed database are equal in terms of access rights to network resources. One of the main reasons for the development of these technologies is the desire to make it easier for the issuer to raise capital. Tokens do not have to represent the entire asset to which they are assigned. They can, for example, represent a fraction of a share, and the cost is then correspondingly lower, allowing a larger number of people with smaller wallets to access trading in such items.

Share tokenization

One of the main assets subjected to the tokenization process are shares.

To begin this process, a licensed financial institution purchases and holds actual shares of listed or unlisted companies on your behalf. Tokens can also be issued by the company as a representation of its own newly issued shares or those acquired from a shareholder.

Digital tokens are then created electronically, representing the held shares, usually on a one-to-one basis, but as mentioned, a token can also represent a portion of the shares. Another important difference is the relationship between the resulting token and a real share. Some tokens may be merely derivative instruments, as they only reflect the share price, excluding equity rights such as dividend rights, participation and voting rights at the general meeting, and other rights provided for shareholders by the Polish Commercial Companies Code. Others, on the other hand, may bear a significant resemblance to real equity instruments, as their acquisition also grants equity rights, although the actual holder of the shares is still the token issuer.

The next stage is selling to investors. This is where another advantage of using cryptoassets becomes apparent. Automated token trading via smart contracts on specialized decentralized financial platforms increases the speed and liquidity of sales. Furthermore, the platforms are available 24/7, at least five days a week, unlike stock exchanges, which are open only on business days and during specific business hours.

Legal status of tokenized shares in Poland

The European Union currently has a pilot regulation, Regulation 2022/858, on a pilot scheme for distributed ledger technology-based market infrastructures. DLT-based market infrastructure is a generic term that encompasses all three types of activities introduced by the regulation:

1) a multilateral trading platform or, according to the Polish terminology, an alternative trading system, based on DLT; which associates many declarations of readiness to buy and sell financial instruments by third parties

2) a settlement system based on DLT – links between at least three institutions, excluding an indirect participant, within which common rules for clearing or executing their settlement orders apply to these participants,

3) a trading and settlement system based on DLT – a system combining the functionalities of the two above systems.

Currently, the system only accepts stocks whose market capitalization or uncertain market capitalization is less than five hundred million euros.

However, no institution in Poland has joined this system. Furthermore, no applications for authorization to operate the aforementioned infrastructure have been submitted to the Polish Financial Supervision Authority (KNF), the national financial market regulator. Therefore, trading in tokens on the regulated market, i.e., the Warsaw Stock Exchange, is impossible, both legally and factually, because the WSE lacks the appropriate IT infrastructure.

The situation is different in the case of unlisted companies, i.e., joint-stock companies that are not public, and a relatively new type of capital company, the simple joint-stock company. The Commercial Companies Code explicitly mandates an electronic form of the shareholder register. In the case of a private joint-stock company, the existing share register should be replaced. The law explicitly mentions the use of distributed database technology, such as blockchain, as possible solutions. Storing share tokens as entries in a shareholder register maintained using blockchain technology is permitted. This is another step in line with the global trend of digitization. The legislator intended this to facilitate the dematerialization of shares outside the scope of stock exchange regulations, i.e., the securities depository. The register is not maintained by the company itself. According to the law, it must be prepared and updated by: a notary or an entity authorized to maintain a securities account under Article 4 of the Act on Trading in Financial Instruments, i.e.: a brokerage house; a bank conducting brokerage activities; a custodian bank; a state-owned bank conducting brokerage activities; A foreign investment firm or other foreign legal entity with an active branch in the Republic of Poland; the National Depository for Securities; and the National Bank of Poland. This specific and comprehensive list is dictated by the fact that these entities are subject to the supervision of relevant administrative or administrative bodies, which provides a certain guarantee of their reliability regarding the security and integrity of the data contained in the register. This is based on an agreement that the company is obliged to conclude with such an entity. However, this register, in itself, does not enable trading in such tokenized shares, as access is limited only to shareholders and the managing entity, such as a notary or brokerage house. A separate platform is required for this. Tokens representing shares and granting the holder (incorporating) equity rights meet the definition of a security under Directive 2014/65/MIFID II and the Polish act implementing it. For this reason, the provisions of Regulation 2023/1114 MICA on crypto-asset markets do not apply to them. Instead, they are subject to the provisions of the Act on Trading in Financial Instruments and European regulations governing the capital market, which imposes, for example, the obligation to submit a prospectus, unless exemptions provided for in this act apply. It is worth noting that the European Securities and Markets Authority has confirmed in its current guidelines that issuance technology, such as blockchain, does not change the legal classification. However, it is also important to remember that the severely limited oversight by the Polish Financial Supervision Authority and the lack of extensive regulations regarding asset trading in private companies pose significant risks associated with trading in tokens and other crypto-assets. The lack of a company listing on the stock exchange makes it difficult to obtain reliable information about the company’s condition and, therefore, make informed investment decisions.

Tokenized shares and taxes

Tokens that represent shares are treated as financial instruments under tax law, so they are subject to the same taxation as classic instruments such as shares.

Under personal income tax (PIT), income is generated upon the sale of a financial instrument, in this case a token representing a share, or upon the exercise of a right under a derivative instrument, such as an equity token exposing the holder solely to the share price. The tax base is the difference between the cost of obtaining the income and the final income. The cost of obtaining the income will be the price paid for the token, while the income will be the price obtained from its sale. Pursuant to Article 30b of the Personal Income Tax Act, the tax rate on such income is 19%.

Corporate income tax (CIT) applies to capital gains and income from other sources. However, the issuance of tokens and their purchase by investors should be treated as a contribution to share capital if the company issues both shares and tokens. Such an inflow of funds is exempt from CIT under Article 12, Section 4, Item 4 of the CIT Act. If the token issuer is the entity that purchased the shares and issued the associated tokens, the income will be treated as capital gains under Article 7b, Section 1, Item 3, Letter a. Income, calculated similarly to personal income tax, will be taxed at a 19% rate for all taxpayers, as the preferential 9% rate for small taxpayers and entities during the first year of operation does not apply to capital gains.

Financial instruments, and therefore tokenized shares, are not goods within the meaning of the Value Added Tax (VAT) Act. Only services related to financial instruments could be subject to taxation. However, the law generally excludes the financial market, including the insurance market, from VAT. Article 43, paragraph 1, item 41 states: “Services related to financial instruments, referred to in the Act of 29 July 2005 on Trading in Financial Instruments (Journal of Laws of 2024, items 722 and 1863, and of 2025, item 146), are exempt from tax, excluding the storage and management of these instruments, as well as intermediation services in this regard.” In the case of tokens linked to shares, a tax liability could only arise in relation to the storage of actual shares by the token issuer.

Artykuł Cryptoassets and tokenization in Poland, including shares tokenization pochodzi z serwisu KIELTYKA GLADKOWSKI LEGAL | CROSS BORDER POLISH LAW FIRM RANKED IN THE LEGAL 500 EMEA SINCE 2019.

As the market for cryptocurrencies and crypto-assets is growing at a frenetic pace, last year there were many discussions in the European Union about the rules and regulations related to them. On September 24, 2020 the European Commission has issued an important project affecting the Market of Crypto-assets in the European Union, namely the Proposal for the REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on Markets in Crypto-assets, and amending Directive (EU) 2019/1937.

What is the purpose of the proposal?

Due to the growing popularity of cryptocurrencies, there has occurred a need for increased regulatory scrutiny. There are different approaches to cryptocurrencies around the world regarding government regulations. The regulations in the new draft are designed to protect consumers from cyber-attacks, theft or malfunction on cryptocurrency exchanges. What is surprising – despite the emphasis on increased scrutiny and protection, the regulation does not mention a requirement for mandatory insurance against, for example, loss of assets due to fraud or cyber-attack.

Key assumptions of the project

The preamble of the document describes the assumptions and objectives of the project. First and foremost, this proposal is part of the EU’s “Digital Finance” package designed to support the potential of digital finance to innovate and compete while mitigating risk. The strategy is likely to significantly impact the operation of the crypto market in the EU. The proposal is in line with the Commission’s priorities to adapt Europe to the digital age. The digital finance package includes a new strategy for the EU financial sector. The aim of the previously mentioned strategy is to ensure that the EU drives the digital revolution and that innovative European companies play a leading role in it.

in addition, the package also includes a proposal for a distributed ledger technology-based market infrastructure pilot scheme, a proposal for digital operational resilience, and a proposal to clarify or amend certain related EU financial services legislation.

Key to the strategy is to ensure that the EU’s financial services regulatory framework is conducive to innovation and does not hinder the use of new technologies.

Since the publication of the Commission’s Fintech Action plan, in March 2018, the Commission has been examining the opportunities and challenges raised by crypto-assets. In 2017, there was a big jump in the market capitalization of cryptocurrencies. As a result, Executive Vice President Valdis Dombrovskis, in a letter to the European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA), urged them to renew their warnings to investors. The 2018 Action Plan included, among other things, mandating the EBA and ESMA to assess the applicability and adequacy of the existing EU regulatory framework for financial services to cryptocurrencies. EBA and ESMA highlighted that – apart from EU legislation to combat money laundering and terrorist financing – most cryptocurrencies fall outside the scope of EU financial services legislation. Consequently, they are not subject to legislation on, for example, consumer and investor protection.

Another reason why there is a need for regulation is that individual member states are introducing regulations on cryptocurrency-related issues, leading to market fragmentation.

Experts say regulation over-regulates stablecoins

Recently, a new subset of crypto assets has entered the market – the so-called ‘stablecoins’. They constitute the main focus of the regulation alongside cryptocurrency exchanges. Their value is tied to another asset, such as gold or another cryptocurrency. Their creation was intended to overcome the volatility of cryptocurrency prices. This is usually due to the fact that there is no solid mechanism to determine their true value. One of the purposes for which stablecoins are used is for owners to convert profits into stablecoins in the short term with the intention of investing in other cryptocurrencies when opportunities arise, rather than converting profits into fiat money and transferring it to their bank account. Besides, stablecoins are invested in cryptocurrency exchanges or decentralized financial applications to return interest and profit respectively. Cryptocurrency exchanges are a safe and attractive alternative to traditional savings methods offered by legacy finance. Customers are not forced to lock up their funds for a couple of years, and the annual interest can be much higher.

European Commission President Ursula von der Leyen emphasized the need for “a common approach with Member States to cryptocurrencies to ensure that we understand how to take full advantage of the opportunities they present and address the new risks they may pose”. In December 2019, the Commission and the Council jointly declared that they “are committed to establishing a framework that takes advantage of the potential opportunities that certain cryptocurrencies may offer”.

Four main objectives

The first objective of the proposal is to provide legal certainty. Given the speed at which cryptocurrency markets are developing, a robust legal framework that sets out the regulatory treatment of all cryptocurrencies that are not covered by existing financial services legislation is essential.

The second goal is to foster innovation. Promoting the development of cryptocurrencies and the wider use of DLT technology is not possible without the introduction of a clear set of rules to support innovation and fair competition.

The third objective is to put in place an adequate level of consumer and investor protection and market integrity. Crypto assets not covered by current financial services regulations carry many of the same risks as more familiar financial instruments.

The fourth goal is to ensure financial stability. While some cryptocurrencies are quite limited in scope and application, others, such as the emerging category of “stablecoins,” have potential. They have the opportunity to become widely accepted and potentially systemic. The proposal includes safeguards to address potential threats to financial stability and orderly monetary policy. It could arise from “stable coins.”

The proposal was drafted in accordance with existing policy provisions in this policy area. The proposal includes assurances that the existing provisions do not constitute obstacles to the deployment of innovative technologies. The regulations in the proposal are supported by long-term horizontal market monitoring and much international political work, for example, in such fora as the Financial Stability.

Consistency with other Union policies

President von der Leyen’s mission letter to Vice President Dombrovskis calls for a common approach to cryptocurrencies with member states to ensure Europe can make the most of the opportunities they present and counter the new threats they may pose.

This proposal supports a holistic approach to blockchain and DLT technologies that aims to put Europe at the forefront of blockchain technology innovation and deployment. It is closely linked to the Commission’s broader policy on blockchain technology. The work has included the creation of a European Blockchain Observatory and Forum and a European Blockchain Partnership. It brings together all member states at a political level, as well as the public-private partnership envisaged with the International Association for Trusted Blockchain Applications (https://inatba.org/ ).

This proposal is also consistent with the Union’s policy to create a capital markets union (CMU). It responds to the final report of the High Level Forum, which highlighted the under-exploited potential of cryptocurrencies and called on the Commission to provide legal certainty and establish clear rules for the use of cryptocurrencies.

We can also see consistency in the SME strategy adopted on March 10, 2020, which also highlights DLT and cryptocurrencies as innovations that can enable SMEs to engage directly with investors.

Most importantly, the proposal is fully consistent with the recommendation in the Security Union’s strategy to develop a legal framework for cryptocurrencies. It takes into account the impact of new technologies on the way financial assets are emitted.

Legislative path of the regulation

On 15 October 2020, the Parliament’s Committee for Economic and monetary affairs (ECON) appointed Stefan Berger (EPP/Germany) as the rapporteur for this file. The draft report made by him was presented on 25 February 2021. Then the review in the Council Working Party on Financial Services was ongoing. On 22 February 2021, the European Central Bank published its opinion on the file. On 2 March 2021, the European Economic and Social Committee published its opinion on the file.

Is regulation good for crypto?

Regulation could also make the cryptocurrency market less susceptible to manipulation, which could increase the value of cryptocurrencies. In the short term, the regulation may cause the trading value of cryptocurrencies to fluctuate, but in the long term, the regulation, if enforced correctly, is expected to stabilize the market and make it a safer investment.

Summary

Although MiCA will bring a lot of changes to the world of cryptocurrencies, the European Commission has ensured that it will not hinder the development of modern technology in any way. In addition,  MiCA will NOT apply to crypto-assets that qualify as: financial instruments, such as Bitcoin. We can be also sure that the EU will not ban crypto .

Sources:

What the EU’s new MiCA regulation could mean for cryptocurrencies | EUROPP (lse.ac.uk)

EUR-Lex – 52020PC0593 – EN – EUR-Lex (europa.eu)

MiCA – Markets in crypto-assets regulation | Legislative train schedule | European Parliament (europa.eu)

MiCA: A ‘beta version’ of crypto-assets regulation in the EU – CityAM : CityAM

New Crypto Rules in the European Union – Gateway for Mass Adoption, or Excessive Regulation? – RegTrax – Stanford Law School

Can Bitcoin Regulations Make Cryptocurrency Safer? (thebalance.com)

Artykuł The EU’s new MiCA regulation on crypto-assets pochodzi z serwisu KIELTYKA GLADKOWSKI LEGAL | CROSS BORDER POLISH LAW FIRM RANKED IN THE LEGAL 500 EMEA SINCE 2019.