December 10, 2012

It is intended for reference purposes only and does not constitute definitive advice. Links to the original source materials are included where there are no restrictions in terms of access. References may also be made to sources that require separate registration or subscription. A link to a source does not necessarily imply endorsement of the source or the material provided through the link. For further information on any of the matters discussed in this summary please contact Alexander Ross. If you have any comments, queries or suggestions please contact us at comments. All suggestions and comments are most welcome. If you do not wish to receive this summary you can contact us at unsubscribe@wiggin.co.uk.

General

High Court accepts jurisdiction over database right infringement claim alleging extraction by overseas defendants of information from a password-protected database maintained on a server based in the UK.

Court of Appeal finds comments posted online by an agent’s employees that disparaged the agent’s principal not sufficiently serious to be repudiatory breaches of agency agreement.

European Commission publishes Communication to protect businesses against marketing scams.

European Commission consults on enforcement of intellectual property rights in EU.

European Commissioner, Neelie Kroes, says it is essential to support creative industries to achieve economic growth.

Technology

European Commission clears UK umbrella support scheme for broadband investment, “BDUK”.

Data Protection

UK Government publishes Impact Assessment on proposed European data protection legislation showing that it would impose burdens on businesses that “far outweigh” net benefit estimated by European Commission.

Information Commissioner’s Office fines two owners of marketing company £440,000 for sending millions of unlawful spam texts over past three years.

Broadcasting

Ofcom publishes statement approving modifications to Channel 3 networking arrangements.

Prize Draws, Promotions and Competitions

ASA censures PepsiCo promotion which: a) didn’t make clear that generating multiple email addresses to make large numbers of entries would not be accepted; and b) withdrew already confirmed prizes from entrants.

Litigation

Law Commission consults on changes to Contempt of Court Act 1981.

Music

PRS for Music launches revised Code of Conduct.

Publishing

Press Complaints Commission rules on privacy complaint about local newspaper story that used information from Facebook.

Media Standards Trust welcomes Lord Justice Leveson’s “sensible and pragmatic report”.

Gambling & Betting

Committee of Advertising Practice consults on rule prohibiting anyone under age of 25 from being featured playing significant role in gambling marketing communications.

Advertising

ASA finds Amazon Prime’s “free” one-day delivery service claim misleading because of annual subscription payment.

General

High Court accepts jurisdiction over database right infringement claim alleging extraction by overseas defendants of information from a password-protected database maintained on a server based in the UK. 

SMi Group Ltd, a company registered in England, organise worldwide conferences on defence and security matters.  Two of the defendants, Daniel Levy and Marta Levy, were former SMi employees who were posted to work for its Singapore branch.  After giving notice to SMi, Mr and Mrs Levy were employed at IB Consultancy BV (the third defendant: a Dutch defence and security consultancy company) by the fourth defendant, IB Consultancy‘s Managing Director Mr Ilja Bonsen. 

SMi claimed that the Levys, whilst in Singapore, remotely accessed its computer servers and/or a password-protected database called “Unity” containing (amongst other things) client contact details, and extracted substantial quantities of commercially confidential and valuable information to use extensively in order to organise a Chemical Biological Radiological and Nuclear Explosive (CBRNE) conference to be held in Singapore in April 2012 on behalf of IB Consultancy.  This was done, SMi said, in the full knowledge that this would be in direct competition with a conference SMi was organising in the same country. 

In February 2012, SMi commenced High Court proceedings, raising various heads of claim including database right infringement.  Mr Bonsen (domiciled in the Netherlands) challenged the court’s jurisdiction. 

SMi argued that because its servers, databases and other confidential information were located in England and the place where the alleged “harmful events occurred and/or the damage occurred” was also England then pursuant to Article 5(3) of the Brussels Regulation (44/2001/EC) the English court had jurisdiction.  The general rule is that the defendant can only be sued in his country of domicile.  However, Article 5(3) provides that in matters relating to tort, delict or quasi-delict, a person may also be sued “in the courts for the place where the harmful event occurred or may occur”. 

The court found that it was plainly arguable on the facts that SMi maintained a database within the meaning of the Copyright and Rights in Databases Regulations 1997.  Furthermore, it was plainly arguable that extraction of data, within the meaning of regulation 16, or re-utilisation of that data by all of the defendants had occurred; therefore, SMi had a good arguable case for the relief sought against the defendants.  The deputy judge was also satisfied that the defendants’ wrongdoing amounted to tortious conduct within the meaning of Article 5(3).  

As regards the difficulty of establishing where the harmful event occurred, the deputy judge was referred to the Advocate General’s Opinion in Case C-173/11 Football Dataco Ltd v Sportradar GmbH, specifically his rejection of emission and reception as being appropriate criteria for determining the locus of a relevant communication in the case of internet communication in favour of “a more embracing definition which acknowledges that, in a case of reutilisation of data derived from a database, the tort is capable of being committed in more than one place”.  On this basis the deputy judge was persuaded that SMi had a good arguable case that the place where the harmful event occurred for the purposes of Article 5(3) was, at the very least, in the UK where its servers were based.

The court therefore concluded that the English Court had jurisdiction to determine the claim against Mr Bonsen.  Accordingly, the application challenging jurisdiction was dismissed.  Although the Court of Justice, which has since ruled in Football Dataco, did not agree with the Advocate General on every point, it agreed to an extent that would suggest that the High Court would settle the matter of jurisdiction differently (SMi Group Ltd v Levy [2012] EWHC 3078 (Ch) (9 October 2012) – to read the full judgment click here).

Court of Appeal finds comments posted online by an agent’s employees that disparaged the agent’s principal not sufficiently serious to be repudiatory breaches of agency agreement. 

In reaching its decision, the court considered that there was no basis for the proposition that the good faith duty in Regulation 3 of the Commercial Agents Regulations 1993 implied a “condition” into the agency contract, breach of which was always repudiatory.  Nor did the court accept that a breach of the statutory duty in the Regulations itself gave rise to an automatic right to terminate the contract.  The court also found that the fiduciary character of the relationship between the parties, whilst clearly relevant, did not in the circumstances of this case justify automatic termination.

In 2005 Spectrum Agencies was appointed agent in the UK for the sale of Crocs footwear.  A dispute arose when one of Spectrum’s employees posted comments about Crocs on the internet.  The posting, referred to as “the Crawl”, consisted of written film credits rolling up on the screen.  The sequence was headed “That’s a Croc!!  Of Shite!!  SPECTRUMS WAR OF LIGHT VS DARK”.  According to Spectrum, the Crawl was a light-hearted “joke” based on a typical working day of Crocs’s customer services team and Spectrum’s battle to get service from Crocs.  The joke was put into “a Star Wars context”.  A link to the Crawl was emailed to other Spectrum employees and to third parties, including some Crocs’s customers in the UK and distributors in other markets.  

Failing to see the joke, Crocs terminated the agency contract on the basis that the Crawl was “highly derogatory” and amounted to repudiatory conduct on Spectrum’s part.  Spectrum issued proceedings for compensation, estimated by Spectrum to be in the region of £12.8 million to £16 million, under Regulation 17.  According to Spectrum, Crocs had used the situation to get out of the contract without having to pay compensation on termination of the agency.  Crocs’s defence was that it was entitled to treat the agency as at an end. 

Lord Justice Mummery, giving the lead judgment, noted that Regulation 3 was not expressed as, or to be, or to create a condition of the contract the breach of which would automatically terminate the agency contract.  It did no more than set out the relevant obligations of the agent.  There was therefore no basis for holding that it went further and implied those obligations as fundamental conditions so that breach of them would always be repudiatory. 

Similarly, the Regulations did not spell out that, as a specific consequence of breach of statutory duty, the agency contract was, or might be, terminated.  On the contrary, Regulation 5(2) made that implication impossible by expressly providing that the consequences of breach of the Regulation were a matter for the law governing the contract. 

Nor did the general principles of fiduciary law support Crocs’s submissions of automatic termination.  Mummery LJ accepted that the fiduciary character of the contractual relationship was clearly relevant, but stressed that it was subject to the qualifications that not all duties owed within a fiduciary relationship were properly classified as fiduciary duties and not all breaches of duty owed by a fiduciary and properly classified as fiduciary either automatically or necessarily repudiated the contract.  The fiduciary duties were not formulated in terms that produced the same outcome in the case of every breach.  The remedial consequences of the breaches of duty depended not only on the nature of the duty owed but also on the factual circumstances for which the particular breach occurred. 

In Mummery LJ’s view, the correct question was how serious, in all the circumstances, was Spectrum’s conduct in connection with the Crawl.  The judge had asked that question and concluded that it was not serious enough to be a repudiatory breach.  On appeal, the court could only overturn that answer if it were clearly shown to be wrong.  However, the evidence available was, in Mummery LJ’s opinion, sufficient to support the judge’s assessment that a breach was not sufficiently serious and his conclusion that Spectrum’s conduct did not justify summary termination by reason of acceptance of a repudiatory breach. 

In this regard, Mummery LJ noted in particular that the Crawl did not disparage the goods to anyone but referred to the inability of Crocs to meet delivery obligations, a state of affairs that was well known.  The style was obviously jokey, even if not everyone might see the joke.  The circulation of the Crawl was limited and temporary and there was no evidence of harm suffered by Crocs.  (Crocs Europe BV v Craig Lee Anderson trading as Spectrum Agencies [2012] EWCA Civ 1400 (30 October 2012) – to read the judgment in full, click here.)

European Commission publishes Communication to protect businesses against marketing scams.

The Commission has outlined a series of actions to tackle marketing scams.  The aim is to protect businesses, professionals and NGOs across Europe from dishonest traders who do not play by the rules and use misleading marketing practices, such as sending out forms asking businesses to update details in their directories, seemingly for free, and then charging them annual fees.  The Commission says that it plans to “beef up” the existing legislation (the Misleading and Comparative Advertising Directive (2006/114/EC)) explicitly to ban practices such as concealing the commercial intent of a communication, while at the same time stepping up enforcement of the rules in cross-border cases.

Marketing scams range from providing false or misleading information about the service to sending offers disguised as invoices or misleading forms asking for updates in business directories.  The Commission says that figures reveal a new trend that has the ability to affect business worldwide.  For example, with the spread of mass-marketing techniques, some operators of misleading directories can reportedly send up to 6 million forms a year. 

The Communication sets out actions for the future to increase the protection of businesses:

• Revising the rules prohibiting certain practices to make them more robust: to enhance legal certainty and ensure there are no gaps, some clearly misleading practices, such as those of the misleading directory companies, will be explicitly banned so that traders will instantly know that such practices fall under the Misleading and Comparative Advertising Directive and are thus illegal.  To make sure everyone plays by the rules of the game, the Commission envisages strengthening the penalties for infringements.  Member States will have to ensure that their laws provide “effective, proportionate and dissuasive penalties”.
• Strengthening enforcement of rules against misleading marketing practices in cross-border cases: every Member State will be required to designate an enforcement authority with the necessary powers to make sure the rules are also applied in business-to-business relations.  The Commission will establish a cooperation procedure between enforcement authorities.  This enforcement network will enable the relevant authorities, such as competition or consumer protection agencies, to exchange information, request cross-border assistance from each other and stop misleading practices affecting businesses.

The Commission plans to present a proposal in the course of 2013 following a thorough impact assessment.  To read the Commission’s press release in full, click here.

European Commission consults on enforcement of intellectual property rights in EU.

As part of its overall strategy on reforming the intellectual property framework in the EU, the Commission is consulting stakeholders in order to evaluate the overall functioning of the civil enforcement system for IP rights in the EU.  The Commission says that the survey is a part of its broader strategy to improve the legal framework for intellectual property rights and their enforcement in order to allow innovative services and products to create growth and jobs in Europe.

The purpose of the survey is to gather specific information about the enforcement of intellectual property rights through contracts, litigation or other means.  The Commission says that the information will allow for a comprehensive assessment of the efficacy and costs of the various civil enforcement systems for IP rights in Member States.  Additionally, it “gives an opportunity to identify complementary work streams where appropriate”.

The survey focuses on the period from May 2006 onwards.  It is directed at all interested public and private stakeholders.  In particular, the survey seeks information from stakeholders who have participated in civil IP infringement proceedings, i.e. claimants and defendants, as well as other parties involved in such proceedings.  The consultation is open until 30 March 2013.  To access the consultation documentation, click here.

European Commissioner Neelie Kroes says it is essential to support creative industries to achieve economic growth.

Speaking to the European Parliament Culture Committee on 26 November 2012, Ms Kroes said that the “creative industries and cultural content have a very strong role to play” in bringing Europe out of recession and supporting the economy.

Ms Kroes spoke of three key areas: 1) how embracing the internet can help the creative sector to flourish; 2) how the EU is supporting media freedom and pluralism in and outside the EU; and 3) how the EU needs strong digital infrastructure and frameworks.

Ms Kroes said that “the internet is changing the whole media sector.  We won’t stop that change from happening; it’s inevitable.  But, if we don’t get it right, we will fall behind our global partners, to the loss of our citizens, our democracy, and the European media sector itself”.  Therefore, she said, “we need to seize those opportunities, and rise to that challenge”.  The question is, “how do we build the right framework that helps this sector in the digital age?”, she said.  In the case of copyright, many are worried about large-scale commercial infringements.  Ms Kroes said that she shared those concerns, but that “merely taking tougher and tougher enforcement action is not sustainable; we all saw that in the case of ACTA”.

So the question is: “how can we make it easier to access legal online content, make the copyright system fit for the digital age, and really help artists make the most out of online opportunities?”.

The second priority within this sector is to defend media freedom and pluralism, Ms Kroes said.  It is in fact “an important question, concerning a cornerstone of democratic, European values”, she said.  In January, Vaire Vike Freiberga will present the findings of her High-Level Group on Media Freedom and Pluralism.  Ms Kroes said that she hoped it would be “a big step forward towards a wider debate”.

On the third issue, Ms Kroes noted that one way to support the creative industries is to look at each subsector, film, books, TV and so on, separately.  However, she said, “that’s not enough”.  In fact the best way to help the creative sector is to provide digital infrastructure: the networks and frameworks that support a digital society.  “Provide that infrastructure, and amazing innovation will follow”, she said.  In particular, high-speed broadband “is essential to support the media sector”.  However, the right frameworks are also needed.  In particular, the copyright framework needs to be “more modern and less fragmented”.

In a little over two years time the Commission will publish its review of the Digital Agenda for Europe.  The review will, Ms Kroes said, refocus on some key areas needed to stimulate the digital economy, namely, high speed broadband, cloud computing, internet security, entrepreneurship and skills, online content and services and research and innovation.

Ms Kroes concluded by thanking the European Parliament for its support of the Digital Agenda.  The question was, however, “for the remaining decision makers, how can we work together to show them that this is an economically essential investment?  Because we will best support the cultural and creative industry, and every other industry, if we build a connected, competitive continent”.  To read Ms Kroes speech in full, click here.

Technology

European Commission clears UK umbrella support scheme for broadband investment, “BDUK”.

The Commission has found that the UK umbrella support scheme for investments in next generation access broadband networks, the Broadband Delivery UK (BDUK), is in line with EU state aid rules.  In particular, the scheme is aimed at supporting local projects in rural and remote areas, where such networks would unlikely be developed on commercial terms.

The UK notified plans to set up an umbrella scheme for implementing around 140 local broadband support projects without individual state aid notifications to the Commission.  The BDUK scheme aims to provide as many UK homes and businesses as possible with access to superfast broadband infrastructure in the so-called “final third” areas.  These areas are typically low-density, rural areas, where commercial operators are unlikely to invest in high quality broadband networks.

The total value of aid to be delivered by the scheme is estimated at around £1.5 billion.  This will most likely enable the UK to achieve the objective of the EU Digital Agenda of coverage of 30 Mbps networks for all European citizens.

The Commission notes that the design of the BDUK scheme contains several “best practices”, which will help to ensure “more effective, better targeted and less distortive public interventions”.  For instance, a national competence centre will advise smaller local authorities.  Moreover, Ofcom will have a crucial role in designing wholesale access prices and conditions.  All information related to projects under the scheme (including mapping, public consultation, tenders, aid beneficiaries) will be published on a central website.  The UK has also committed to submitting an evaluation of the scheme to the Commission before 31 March 2015 and to ensure that any forthcoming scheme will take this evaluation into account.  To read the Commission’s press release in full, click here.

Data Protection

UK Government publishes Impact Assessment on proposed European data protection legislation showing that it would impose burdens on businesses that “far outweigh” net benefit estimated by European Commission.

In a Ministerial Statement, the Parliamentary Undersecretary of State (Helen Grant) said that the Commission’s Impact Assessment estimated that the new regime would bring an administrative saving to the EU of €2.3 billion each year.  The UK Government’s Impact Assessment shows that the Government disagrees with the Commission’s assessment and believes that the burdens the proposed Regulation would impose far outweigh the net benefit estimated by the Commission.  For the UK alone the annual net cost of the proposal (in 2012-13 earnings terms) is estimated to be between £100 million and £360 million a year, Mrs Grant said.

The Government’s view is that the Commission both “overestimates the benefits achieved through harmonised EU data protection law” and “fails to address the full costs and unintended consequences of its own proposals by only considering administrative costs”.  The Government’s analysis addresses some of these failings by considering in full the impact of the proposed regime, including the additional costs for businesses, including small and medium enterprises, the additional costs to supervisory authorities, conducting data protection impact assessments and complying with other new obligations.

The UK Government says that it is seriously concerned about the potential economic impact of the proposed data protection Regulation.  “At a time when the Eurozone appears to be slipping back into recession, reducing the regulatory burden to secure growth must be the priority for all Member States.  It is difficult therefore to justify the extra red-tape and tick box compliance that the proposal represents”, Mrs Grant says.  The Government estimates that the costs for small UK businesses of simply demonstrating compliance with the new rules will be around £10 million (in 2012-13 earnings terms) every year.  

A further serious issue, Mrs Grant notes, “is the possibility of stifling innovation through prescriptive and inflexible rules on gaining individuals’ consent and informing them about the processing of their personal data, whilst offering people an unworkable ‘right to be forgotten’”.  In the Government’s view, the focus should be on achieving the right ends: meeting people’s rightful expectation that their personal information is used lawfully, proportionately and securely, whilst being able to offer them the goods and services they want and need.

Negotiations on the proposals are ongoing in Brussels.  The UK Government says that it will “continue to push for a lasting data protection framework that is proportionate, and that minimizes the burdens on businesses and other organisations, whilst giving individuals real protection in how their personal data is processed”.  To read the Ministerial Statement in full, click here.  To read the Impact Assessment in full, click here.

Information Commissioner’s Office fines two owners of marketing company £440,000 for sending millions of unlawful spam texts over past three years.

This is the first time that the ICO has used its power to issue a monetary penalty for a serious breach of the Privacy and Electronic Communications (EC Directive) (Amendment) Regulations 2011 since the powers were approved in January 2012.  The ICO says that it is also currently considering issuing penalties to three other companies believed to be acting in breach of the Regulations as the office continues its crackdown on the illegal marketing industry.

The marketing company concerned, Tetrus Telecoms, jointly owned by Christopher Niebel and Gary McNeish, had been sending huge volumes of unsolicited text messages from offices in Stockport and Birmingham without the consent of the recipient and without identifying the sender, both of which are legal requirements under the PECR. Any replies were then used to generate leads that were sold to other companies at a considerable profit.

The ICO’s investigation included raids at the company’s Stockport premises in August 2011 and the Manchester home of Niebel in February 2012.  The evidence obtained showed Tetrus was using unregistered pay-as-you-go SIM cards to send out as many as 840,000 illegal text messages a day resulting in income of £7,000 – £8,000 a day.

Examples of the text messages sent out by Tetrus Telecoms included:

• “CLAIM TODAY you may be entitled to £3500 for the accident you had.  To claim free, reply CLAIM to this message. To opt out text STOP.  Thank you”;
• “URGENT! If you took out a Bank Loan prior to 2007 then you are almost certainly entitled to £2300 in compensation.  To claim reply ‘YES’”; and
• “You have still not claimed the compensation you are due for the accident you had.  To claim then pls reply CLAIM.  To opt out text STOP”.

The company was set up in December 2009, and is believed to have been operational since this time.  The two men made hundreds of thousands of pounds profit during the course of three years.  Niebel has now been ordered to pay a penalty of £300,000, while McNeish, who appears to have taken less out of the business, has been fined £140,000.  Niebel and McNeish are also facing prosecution from the ICO for failing to notify that Tetrus Telecoms was processing personal information.  

The ICO says that it is important that any company that has bought data from Tetrus or Niebel or McNeish in the past now carefully checks that the proper customer consents have been obtained and that they are acting within the law.  It is working with the Ministry of Justice to consider whether further enforcement action should be taken against any of these associated companies, including the cancellation of their authorisation to operate.  To read the ICO press release in full, click here.

Broadcasting

Ofcom publishes statement approving modifications to Channel 3 networking arrangements.

On 2 March 2012, the Channel 3 licensees submitted a set of agreements designed to replace and to simplify the previous approved networking arrangements, which cover acquiring programme rights and devising a network schedule.  Amended versions of the submitted documents have now been approved by Ofcom.  In short, the modified arrangements provide for ITV plc to devise the network schedule, which it would make available to the other licensees as affiliate members of the network.

Under the previous arrangements, each of the Channel 3 licence holders was a member of ITV Network Ltd, a company that acted as the licensees’ agent in the purchase, commissioning and administration of the Channel 3 network schedule.  Although each of the Channel 3 licensees were members of ITV Network Ltd, ITV plc, as holder of over 90% of the voting rights in the company, had de facto control over all of the network’s decisions.

Under the new arrangements, ITV plc (through its subsidiary ITV Rights Ltd) will become solely responsible for acquiring programme rights and devising a network schedule.  It will also take on initial responsibility for programme compliance.  ITV plc will make the network schedule available to each of the regional licensees on an affiliate basis, in return for a pre-determined fee.

In Ofcom’s view, the new arrangements meet the relevant criteria specified in the Communications Act 2003. Accordingly, Ofcom has approved them in accordance with Schedule 11 of the 2003 Act, with effect from 1 July 2012.  To read Ofcom’s statement in full, click here.

Prize Draws, Promotions and Competitions

ASA censures PepsiCo promotion which: a) didn’t make clear that generating multiple email addresses to make large numbers of entries would not be accepted; and b) withdrew already confirmed prizes from entrants.

A prize promotion on Pepsi packaging offered the chance to win £500 every hour.  Text included “FOR A CHANCE TO WIN, ENTER THE LAST 4 DIGITS OF YOUR BARCODE AT WWW.PEPSI.CO.UK OR TEXT 62948”.  The terms and conditions stated that there was a limit of one entry per email address per hourly prize draw.  Further text stated “No bulk, consumer group, third party or agent entries will be valid”.

One of the complainants understood the entry codes were not unique and had been posted online by consumers, which allowed them to be used by those who had not purchased the product or followed the relevant no-purchase entry process.  The second complainant, who won several times and was subsequently informed that only one win would be honoured, objected that that restriction was not made clear.

PepsiCo said that instead of having, at great cost, unique codes on each label, it ensured that the promotion was administered fairly and honourably by restricting the number of times consumers could enter and by monitoring their contact details.  PepsiCo said only the draws that had been won by invalid bulk or automated entries had been re-drawn adding that it was justified for promoters to withhold prizes if participants had not met the qualifying criteria set out in the Ts & Cs.

The ASA said that in the perfectly reasonable absence of unique entry codes, it would not be possible for advertisers to prevent consumers sharing information online or for them to readily determine which of the entrants had obtained an entry code by purchasing the product and which had not.  The ASA noted that PepsiCo monitored entrants’ contact details to ensure compliance with the Ts & Cs relating to bulk entries and that neither the promotional packaging nor the website, which both made clear that consumers could enter without purchasing the product, stated that the entry codes were unique.  The ASA therefore concluded that in this respect the promotion had been administered fairly.

However, while it acknowledged that one entry per email address condition was clear, the ASA considered that the condition, which related to the number of entries allowed, was ambiguous and that the reference to “bulk” entries was likely to be interpreted as suggesting that entries generated automatically, and in particular not by individuals, would not be accepted.  It noted that PepsiCo had not provided evidence to demonstrate that the complainant’s entries were made by means other than the individuals generating multiple email addresses.

Because the Ts & Cs did not make clear that it was not acceptable to make multiple entries from a single internet protocol address and because they stated that winners would be selected “from all valid entries for each draw”, the ASA found that the second complainant who had used a different email address for each entry, as per the requirements of the Ts & Cs, and who had been notified of the wins, would have been unnecessarily disappointed at the subsequent prize withdrawal. 

Accordingly, the ASA ruled that significant conditions of the promotion were not made sufficiently clear and that, because unnecessary disappointment had been caused, the promotion had not been administered fairly.  The promotion therefore breached CAP Code rules 8.2 and 8.17 (Sales promotions) and 8.23, 8.27 and 8.28.1 (Prize promotions).  To read ASA Adjudication on PepsiCo International Ltd (21 November 2012) in full, click here.

Litigation

Law Commission consults on changes to Contempt of Court Act 1981.

The need for reform to the Contempt of Court Act 1981 has been highlighted recently, the Law Commission says, by various high profile cases. These include:

• a juror who was found to have researched the defendant on the internet (A-G v Dallas [2012] EWHC 156 (Admin));
• the first internet contempt by publication, which concerned the posting of an incriminating photograph of a defendant on a website (A-G v Associated Newspapers Ltd [2011] EWHC 1894 (Admin));
• contempt proceedings for the vilification of Chris Jefferies during the investigation into the murder of Joanna Yeates (A-G v MGN Ltd [2011] EWHC 2383 (Admin)); and
• proceedings for contempt by publication following the collapse of the prosecution of Levi Bellfield (A-G v Associated Newspapers Ltd [2012] EWHC 2029 (Admin));

These cases illustrate, the Commission says, the challenge that is posed by new media to the existing laws on contempt of court, which pre-date the internet age.  They also illustrate the continuing need for limits on media coverage in order to protect the administration of justice and the right to a fair trial.

The consultation covers:

• the law on contempt by publication both under the Contempt of Court Act 1981 and at common law.  Here, the nub of the problem is how to balance the right of a defendant to a fair trial by an independent and impartial tribunal, with the right of the publisher to freedom of expression.  The document also considers whether the procedural approach to contempt by publication is adequate;
• what is a publication, and who is a publisher?  The question of who constitutes a publisher for the purposes of the Act, with so-called “citizen journalism” and use of social media on the rise, is considered here.  The primary aim is, the Commission says, to assess whether the 1981 Act is capable of dealing effectively with rapidly-developing media technologies, particularly with regard to social media.  The Commission also wants to “future- proof” the 1981 Act so that it can continue to accommodate technological developments.
• jurors who seek information related to proceedings beyond the evidence presented in court or those who disclose information related to their deliberations.  Again, it is necessary to strike a balance between the public interest in the administration of justice, the defendant’s right to a fair trial, and the rights of the jurors concerned; and
• criminal contempt in the face of the court committed in the Crown Court or in the magistrates’ courts when exercising criminal jurisdiction.  The main aim here is to reveal the uncertainties about existing court powers and to make proposals which would make the law clear, fair and practicable.

The Consultation closes on 28 February 2013.  To access the Consultation documentation and for information on how to respond, click here.

Music

PRS for Music launches revised Code of Conduct.

PRS for Music says that the Code follows the British Copyright Council Principles of Good Governance for Collective Management Organisations and also takes into account the recently published Intellectual Property Office Minimum Standards for UK Collecting Societies.  It outlines how the collecting society will “achieve best practice by responding to the needs of members and licensees alike and conduct its licensing business fairly and transparently”.

PRS for Music says that the Code sets out commitments to:

• provide information about the general governance, licensing and membership activities of PRS for Music;
• set standards of conduct that members and licensees can expect from the society;
• set standards for transparency;
• outline the complaints procedure for members and customers; and
• provide an independent ombudsman for complaint resolution.

Chief Executive Robert Ashcroft said, “This revised code builds upon and consolidates PRS for Music’s existing licensee and membership codes.  Its launch underpins our commitment to excellent service and high standards in all that we do”.  To access the new Code, click here.

Publishing

Press Complaints Commission rules on privacy complaint about local newspaper story that used information from Facebook.

The PCC has ruled that the Farnham Herald did not breach Clauses 1 (Accuracy) and 3 (Privacy) of the Editors’ Code of Practice after it published a story about a man who had been assaulted after a night out, which was illustrated with a photo of the complainant’s injured face taken from his Facebook page.

The complainant was concerned that despite an assurance from the police that he would not be identified as a victim of the assault, the newspaper had identified him.  He denied several claims made in the article, including that he had been “embroiled” in a fight and that he had “almost had his nose bitten off”.  He said that the newspaper had based the story on comments posted on Facebook; it had not sought to verify the information with him.

The newspaper said that the complainant had identified himself as the victim of an attack and uploaded the photograph himself on his Facebook page, which was not protected by privacy settings.  The reporter had made inquiries with the police who had confirmed the incident and provided further information.  The newspaper provided an image of a Facebook message its reporter had sent to the complainant requesting comments.  It had removed the article from its website when it learned of the complainant’s concerns, but did not accept it had breached the Editors’ Code. The complainant denied receiving any message from the reporter and said he had wrongly believed that privacy settings were in place on his Facebook account.

While the PCC acknowledged the complainant’s concerns that the information had been published more widely than he had originally intended, it noted that he had “unwittingly” confirmed his involvement in the incident and the extent of the injuries he suffered to the newspaper.  It considered that the report was a straightforward account of a newsworthy incident, substantially corroborated by local police, which included no gratuitous information about the complainant’s private life.  The photograph had been used to illustrate his injuries and had not been taken out of context.  It did not uphold the complaint under Clause 3.  The additional complaint under Clause 1 (Accuracy) was also not upheld.  To read the PCC adjudication on A Man v Farnham Herald in full, click here.

Media Standards Trust welcomes Lord Justice Leveson’s “sensible and pragmatic report”.

The MST says that Lord Justice Leveson “has put forward workable and proportionate proposals for reform of press self-regulation”.  It also approves the fact the report rejected the plan put forward by parts of the industry as set out by Lord Black.

In the MST’s view, Leveson LJ “has challenged the press to develop a genuinely independent and effective system, along guidelines that he has suggested”.  Further, he has recommended that the plan be verified by Ofcom.  “If they do this then the press will be able to take advantage of greater benefits within the courts”, the MST says.

The MST says that it is “disappointed” that the Prime Minister has rejected “out of hand” proposals that would “ensure the independence of the regulator and its effectiveness on behalf of the public”.  By contrast, the MST welcomes the statements of the Deputy Prime Minister and the Leader of the Opposition, and those of Conservative MPs who back the implementation of the Leveson report in full.

According to the MST, Leveson LJ has “proposed legislation only to achieve 3 things: to enshrine a legal duty on the government to protect the freedom of the press; to give authority to a statutory body to recognise the independence of the system; and to validate the code and the arbitral system in order to give participants in the system special benefits in law”.

The MST explains that Leveson LJ “has not recommended any compulsion”.  In fact, the system he recommends is entirely voluntary “so it cannot in any way be characterised as ‘statutory regulation’”, it says.  The Trust welcomes the use of statute to underpin the system while avoiding any opportunity for Government interference.

In the MST’s view, the onus is now on the press to develop a scheme that is “genuinely independent and effective”.  Parliament must also “see through Leveson’s recommendations in full”.

The Trust also agrees with Leveson LJ that if the press fails to come up with a genuinely independent plan, then Parliament has to prepare legislation to provide for a statutory backstop for the largest publishers.  To read the MST’s response in full, click here.

Gambling & Betting

Committee of Advertising Practice consults on rule prohibiting anyone under age of 25 from being featured playing significant role in gambling marketing communications.

The CAP has launched a consultation on whether to grant a limited exemption to the rule that prohibits people who are, or appear to be, under the age of 25 from playing a significant role in gambling advertisements.  If adopted, the narrow proposal will allow online services, such as betting websites, to feature individuals to illustrate bets being offered for sale on the website itself.

The CAP says that it received representations from the sports betting industry that the 2011 extension of the UK Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing (the CAP Code) to marketers’ own websites unintentionally restricted a practice that had previously been permitted by the Gambling Commission.  A rule in the CAP Code prevents advertisers from featuring anyone who is, or appears to be, under the age of 25 from playing a significant role in gambling marketing communications.  This rule meant that the industry was no longer able to feature images of sports people under the age of 25 to illustrate bets offered for sale on their own websites.  The industry said that this was disproportionate particularly when, for example, offering bets related to different players within the same football team.

The CAP says that such websites are unlikely to have significant audiences of young people and their ability to place a bet is restricted by age verification mechanisms required by gambling operators’ licenses.  Therefore, the CAP is conducting this public consultation.  The proposal is narrow in scope meaning that the individual may only be used to illustrate specific betting selections where that individual is the subject of the bet offered and the marketing communication must only appear in a place where a bet can be placed directly through a transactional facility, for instance, a gambling operator’s own website.

The consultation closes on Friday 8 February 2013.  To access the consultation documentation, click here.

Advertising

ASA finds Amazon Prime’s “free” one-day delivery service claim misleading because of annual subscription payment.

Claims on www.amazon.co.uk, for its membership programme, stated “Get your stuff fast Unlimited FREE One-Day Delivery on all eligible orders“.  Claims on the right of the page stated “Try Amazon Prime FREE for one month: Unlimited Free One-Day Delivery.  After your free trial, Amazon Prime is just £49/year“.

Following a complaint that the ad was misleading because membership of Amazon Prime required the payment of an annual subscription, Amazon stated that the ad clearly indicated that cost and argued that omitting the word “free” from the messaging would lead to confusion for the customer, who would be left wondering whether there would be any charge payable for the one-day delivery, or indeed any other of Prime’s services.

The ASA noted that Prime was a paid-for service and members could make use of the one-day delivery service, on selected items, for no further charge.  Although it understood Amazon’s intention was to make clear that the one-day delivery could be used without charge after subscription, because members had to pay £49 before they could use the service, the ASA considered that the claim that one day delivery was “free” was misleading.  Accordingly, the claim breached CAP Code rule 3.1 (Misleading advertising) and 3.25 (Free).  To read ASA Adjudication on Amazon EU Sarl (28 November 2012), click here.