Insights Need to Know – 2012.11.26

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General

Court of Appeal confirms that the well-known principles in Canada Steamship v The King relating to the interpretation of exclusion and indemnity clauses should not be applied mechanistically and ought to be regarded as no more than guidelines.

Ofcom publishes Report to Secretary of State for Culture, Media and Sport on operation of media ownership rules.

Creative industries join forces to implement recommendations from Richard Hooper’s Report, Copyright Works, and streamline copyright licensing.

Technology

Ofcom-commissioned consumer study shows nearly half of all internet users are unsure whether content online is legal.

Ofcom publishes plans to release new airwaves for future generations of mobile devices.

Ofcom publishes consultation on its proposals for launch of “white space” devices.

Mobile telecoms operators could be forced to release consumers’ data on their consumption and transactions.

Data Protection

European Data Protection Supervisor adopts Opinion on the European Commission Communication Unleashing the potential of Cloud Computing in Europe.

Information Commissioner’s Office publishes Code of Practice, “Anonymisation: managing data protection risk”.

European Network and Information Security Agency (ENISA) publishes report on right to be forgotten.

Broadcasting

Ofcom sets out next steps for licence renewal of ITV, STV, UTV and Channel 5.

Ofcom records Broadcasting Code breach against Channel 5 as Big Brother Facebook voting app fails to cope with unanticipated spikes in demand.

Ofcom finds potentially racist comments in Big Brother 2012 not in breach of generally accepted standards because of programme’s robust challenge, but considers approach to sexual violence threats insufficient to remedy very high level of offence.

Ofcom finds sincere apology sufficient to mitigate potential offence caused by use of the word “retard” in Big Brother’s Bit on the Side.

Ofcom consults on its rules for party political and referendum broadcasts and its proposed guidance for broadcast coverage of elections.

Litigation

European Parliament backs plans to do away with 27 national rules for recognising judgments in cross-border disputes.

Sport

Supreme Court upholds Court of Appeal decision to grant Norwich Pharmacal Order requiring ticket agent Viagogo Ltd to disclose identities of persons advertising and selling rugby tickets on Viagogo’s website for prices far above face value.

Publishing

Copyright Licence Agency launches new digital licence for Media Monitoring Organisations.

Advertising

Committee of Advertising Practice announces new transparency and choice rules for Online Behavioural Advertising.

General

Court of Appeal confirms that the well-known principles in Canada Steamship v The King relating to the interpretation of exclusion and indemnity clauses should not be applied mechanistically and ought to be regarded as no more than guidelines. 

Appealing against the judge’s refusal to join the respondents as Part 20 defendants to claims of inducing breach of contract and unlawful means conspiracy, the appellant in this case sought to rely on Canada Steamship Lines v The King 1952 AC 192 to argue that clear words were required to exclude claims for intentional wrongdoing such that the respondents could not escape liability under a third party claims clause in a hive down agreement.  That approach was too formalistic for Lord Justice Rimer, who said that in all cases the court’s function was to interpret the particular contract in the context in which it was made. 

The fourth respondent Alphasteel was a steel manufacturer.  In about 1991, it engaged a company, Lictor, to purchase parts required to assemble a hot strip mill to be used for the production of hot rolled steel products.  The equipment was fully installed, but the agreement was that the equipment would remain the property of Lictor.  In 2007 Alphasteel went into administration.  The first, second and third respondents were its administrators. 

The administrators put Alphasteel’s assets up for sale, attracting interest from a Cypriot company called Libala.  Shortly afterwards, Lictor gave the administrators formal notification of its claim to ownership of the hot strip mill equipment.  Nonetheless, the administrators hived down all of the assets, including the mill, into Mir Steel UK Ltd, a wholly owned subsidiary and the appellant in these proceedings.  In clause 9.5 of the hive down agreement Mir Steel agreed that “it shall be responsible for settling any claim made against it by Lictor Anstalt in respect of the hot strip mill”.  Mir Steel was then purchased by Libala. 

Lictor sued Mir Steel and Libala for conversion, inducing a breach of contract and unlawful means conspiracy.  Mir Steel accepted that clause 9.5 extended to Lictor’s claim in conversion but sought to have the respondents joined in as Part 20 defendants on the basis that it had a claim for contribution under the Civil Liability (Contribution) Act 1978 to Lictor’s claims against it for inducing breach of contract and for conspiracy.  The judge at first instance dismissed the application, holding amongst other things that clause 9.5 precluded a claim for contribution against the respondents.  

On appeal Mir Steel argued that the clause should not be read as imposing upon it the exclusive burden of bearing the consequences of torts said to have been committed by the respondents where those torts had at their heart intentional wrongdoing, namely inducing a breach of the agreement that property in the mill would remain with Lictor and conspiracy.  Mir Steel argued that if, under the principles set down in Canada Steamship Lines v The King 1952 AC 192, clear words were required to exclude claims for negligent wrongdoing, then clear words must also be required to exclude claims for intentional wrongdoing. 

Rejecting that argument, Rimer LJ held that the Canada Steamship principles were no more than guidelines and did not provide an automatic solution to any particular case.  The court’s function was always to interpret the particular contract in the context in which it was made and as such its task in this case was to approach the interpretation of clause 9.5 in the light of the overall commercial purpose of the hive down agreement. 

To Rimer LJ that purpose was obvious.  Under a statutory duty to achieve the “purpose of administration” as quickly and efficiently as reasonably practicable, the administrators sought to sell Alphasteel’s business and assets to Mir Steel, their objective being to achieve a prompt realisation and consequential distribution of proceeds to creditors.  Mir Steel’s objective, as purchaser, was to acquire the business and assets with a view to exploiting them for its own commercial advantage.  The crucial feature was that when Alphasteel, the administrators and Mir Steel entered into the hive down agreement they all knew that Lictor had raised and asserted a claim to the ownership of the mill.  The respondents were admittedly selling Mir Steel as an asset to which the title was flawed, but Mir Steel knew all about that and was nevertheless prepared to buy the asset “warts and all”, and, by clause 9.5, agreed to assume responsibility for settling any claims made against it by Lictor in respect of the mill.  There was no reason, in those circumstances, why “any claim” in clause 9.5 should be narrowly construed as extending only to a claim by Lictor against Mir Steel for conversion.  The whole point of clause 9.5 was to shift to Mir Steel the entire risk and burden of any claim that Lictor might make.  Appeal dismissed. (MIR Steel UK Ltd v Christopher Morris [2012] EWCA Civ 1397 (1 November 2012) – to read the full judgment click here).

Ofcom publishes Report to Secretary of State for Culture, Media and Sport on operation of media ownership rules.

Ofcom has a statutory duty to review the media ownership rules every three years and make recommendations for any change to the Secretary of State.  This latest Report does not make any recommendations for change due to the fact that the wider public policy debate about media ownership is ongoing and the recommendations of the Leveson Inquiry are yet to be published.

The current national cross-media ownership rules prohibit a newspaper group with more than 20% of national newspaper share from holding a Channel 3 licence or a stake in a Channel 3 licensee that is greater than 20%.  Ofcom’s earlier advice to Government on measuring media plurality stated that it is for Parliament to decide if and when this rule should be modified or removed and that the conclusion of the first periodic review of plurality is likely to provide greater certainty than is currently available.  As such, it does not recommend any changes to this rule in this Report.

The current rules also disqualify certain persons from holding broadcast licences generally, others from holding certain kinds of broadcast licences, and still others from holding broadcast licences unless Ofcom has determined that it is appropriate for them to do so.  Parliament has not indicated that it believes the policy rationale for these rules to have changed and, Ofcom says, the market context in which they operate remains relatively stable.  As such, it is not recommending any change to these restrictions.

Ofcom is required to ensure that regional Channel 3 licensees broadcast nationally news programmes that are able to compete effectively with other national television news by requiring them to appoint a single news provider between them.  Persons who would be disqualified from holding a Channel 3 licence are also disqualified from being the Channel 3 appointed news provider.  The original rationale for these rules holds true, Ofcom says.  As such, again, it not recommending any change to these restrictions.

Ofcom says that its recommendations on measuring media plurality “are now a matter for Government to consider”.  For a link to the full Report, click here.

Creative industries join forces to implement recommendations from Richard Hooper’s Report, Copyright Works, and streamline copyright licensing.

Steps to implement recommendations from Richard Hooper’s Report will focus on streamlining copyright licensing for the digital age, making it easier for users to access rights and services lawfully and so ensuring that creators are rewarded when their works are used.  In line with the recommendations the creative sectors have taken the initiative to follow up on the report and have committed funding to enable the project to progress.

James Lancaster, former Head of Rights and Business Affairs at the BBC, will chair the Copyright Licensing Steering Group (CLSG), which will oversee a range of workstreams focusing on different aspects of copyright licensing including data building blocks, metadata and streamlining licensing in various sectors.  A key workstream will steer the development of the Copyright Hub identified in the report and this is being chaired by Richard Hooper under the banner of the Copyright Hub Launch Group.  Members of the CLSG and each of the workstreams are currently being recruited from across the creative industries and work is getting under way.

Richard Hooper’s proposed Copyright Hub builds on the recommendation for a digital copyright exchange in Professor Hargreaves’ Review of Intellectual Property and Growth.

Dr Ros Lynch, a member of the Senior Civil Service in the Department for Business, Innovation and Skills and collaborator on Hooper’s final report, has been seconded to lead an industry-funded office to spearhead the work to deliver the report’s recommendations. 

Robert Ashcroft, Chief Executive of PRS for Music, said: “We will continue to work with our partners in the industry to meet the challenges [Richard Hooper] identified, providing a better licensing environment for all.  As previously stated we believe that the Copyright Hub recommended by Hooper could place Britain at the very centre of the global, online market for the creative industries.  Coupled with industry efforts for a Global Repertoire Database, it will prove to be a critical building block in what must inevitably be an international project”.

Sarah Faulder, Chief Executive of the Publishers Licensing Society, said: “Richard’s Hooper’s proposed Copyright Hub promises to ease copyright licensing for the benefit of users and right holders alike.  This is a very significant project which has attracted widespread support form the creative industries.  I am delighted that PLS has been able to play a role in harnessing the industry’s enthusiasm for taking it forward”.  To read the PRS for Music press release, click here.

Technology

Ofcom-commissioned consumer study shows nearly half of all internet users are unsure whether content online is legal.

The study, entitled OCI Tracker Benchmark Study, funded by the Intellectual Property Office and carried out on behalf of Ofcom by Kantar Media, is part of an ongoing large-scale consumer study into the extent of online copyright infringement among internet users aged 12 and above.  This ongoing research will, Ofcom says, identify trends over time, examining infringement of copyright in music, films, TV programmes, software, books and video games.

The study found that 47% of internet users are unsure whether the content they are accessing is legal, but it also found that one in six people online believed they downloaded or accessed content illegally over a three-month period this year.  Ofcom says that the report highlights “the importance of increased efforts to educate and inform consumers”.

In June, Ofcom published a draft Code that would require large fixed ISPs to inform customers of allegations that their internet connection has been used to infringe copyright, and to explain where they can find licensed content on the internet.  Ofcom is also obliged to report to the Government on efforts made by content owners to invest in awareness campaigns to help educate consumers about the impact of copyright infringement.

The consumer study also found that:

  • one in six (16%) internet users aged 12 and above downloaded or accessed online content illegally during the three month period from May to July 2012;
  • reported levels of infringement varied considerably by content type: 8% of internet users consumed some music illegally in the three months, but just 2% did so for games and software;
  • the most common reasons cited for accessing content illegally were because it is free (54%), convenient (48%) and quick (44%).  Around a quarter (26%) of infringers said it allows them to try before they buy;
  • infringers said that they would be encouraged to stop doing so if cheaper legal services were available (39%), everything they wanted was available from a legal source (32%) or it was more clear what content was legal (26%). One in six said they would stop if they received one notifying letter from their ISP; and
  • those who consumed a mixture of legal and illegal online content in the form of music, films and TV programmes reported spending more on legal content in these categories over the three-month period than those who consumed entirely legal or illegal content.

The research follows a recommendation in Professor Hargreaves’ Review of Intellectual Property and Growth that Ofcom should start gathering independent data and establishing trends in the area of online copyright before its formal reporting duties begin, under the Digital Economy Act 2010, when the Code comes into force.  To read Ofcom’s press release in full and for a link to the OCI Tracker Benchmark Study, click here.

Ofcom publishes plans to release new airwaves for future generations of mobile devices.

The release of new mobile spectrum is to help meet consumers’ growing demand for data on the move.  New data on the UK’s communications infrastructure shows that 20 million gigabytes of data is now being consumed in a month over the country’s mobile networks, more than twice as much as last year (nine million gigabytes).  That is the equivalent of downloading five billion music tracks.

By 2030, demand for mobile data could be 80 times higher than today.  Ofcom says that to help meet this demand and avert a possible “capacity crunch”, more mobile spectrum is needed over the long term, together with new technologies to make mobile broadband more efficient. 

The plans aim to draw on the 700 MHz frequency band, which is currently used for digital terrestrial television, as part of future harmonised spectrum planning across Europe and the rest of the world.  According to Ofcom, releasing the new frequencies can be achieved without the need for another TV switchover.

Ofcom’s plans also seek to ensure the long-term future of digital terrestrial TV (DTT).  This can be achieved by ensuring alternative frequencies are available for DTT when the next generation of mobile broadband is introduced towards the end of the decade.

The changes will require an international spectrum plan to be agreed and work on this is unlikely to be complete before 2018.  Over the coming years, Ofcom says that it “will plan and prepare to ensure the changes are in the best interests of UK citizens and consumers”.

For the vast majority of viewers, moving DTT to different frequencies will require a simple retune of existing TV equipment.  However, a small minority of consumers may need to change their roof top aerials, but not before 2018.

Ofcom has also published its Infrastructure Report Update, which illustrates the scale of demand for data in the UK.  While the arrival of 4G mobile networks will provide much-needed new bandwidth, fixed networks are also developing fast to keep pace with consumers’ growing use of the internet and other “data-hungry” services like video-on-demand.

Ofcom understands that future internet bandwidth will need to come from a variety of sources, including public Wi-Fi hotspots.  There are now 16,000 Wi-Fi access points in places like cafés, transport hubs and other public spaces.  However, consumers seem to prefer using their mobile network for internet access when out and about, rather than public Wi-Fi: around 25 times as much data is downloaded over mobile networks as over Wi-Fi hotspots.  This suggests there is an untapped opportunity for public Wi-Fi to help meet consumers’ growing thirst for data.  To read Ofcom’s press release in full, click here.

Ofcom publishes consultation on its proposals for launch of “white space” devices.

A white space device uses gaps in radio spectrum, called “white spaces”, which exist in between frequency bands that have been reserved for TV broadcasting.  Use of these white spaces would allow devices to transmit and receive wireless signals for applications such as broadband access for rural communities or innovative “machine-to-machine” networks.

Compared with other forms of wireless technologies, such as regular Bluetooth and Wi-Fi, the radio waves used by white space devices will be able to travel larger distances and easily through walls.  This is because they would use the lower frequencies that have traditionally been reserved for TV.

Spectrum itself is a limited resource that is in huge demand, fuelled by the recent explosion in smartphones use and other wireless applications.  Ofcom says that “White space devices offer a creative and efficient way to use spectrum that would otherwise lay fallow”.

So that the new technology can be used in the UK, the framework that Ofcom is proposing is designed to ensure that the devices do not interfere with existing licensed users of the spectrum, which include DTT and wireless microphone users.  As part of that framework, Ofcom proposes to allow white space devices to operate without the need for a licence.  New legislation is needed to allow this to happen. 

Under Ofcom’s proposals, a white space device will not be able to start transmitting until getting clearance from an online database qualified by Ofcom.  This database will provide updated information on where the white spaces are and the power level that devices would need to be restricted to if they wanted to use them.

The closing date for responses to the consultation is 10 January 2013.  Ofcom will use the feedback to finalise its proposals.  Ofcom will then notify the European Commission of its proposed technical regulations for white space devices.  This will be followed by a “standstill” period of three months for the Commission to inform other Member States and to allow opportunity to comment on Ofcom’s plans.  In 2013, Ofcom also plans to finalise the arrangements for databases and the technical parameters needed to ensure that white space devices can operate harmoniously with existing spectrum users.  This means that white space technologies could potentially be launched in the UK towards the end of 2013.  For a link to the consultation documentation, click here.

Mobile telecoms operators could be forced to release consumers’ data on their consumption and transactions.

Following a consultation this summer, the Government says that it will look to legislate if companies fail to comply with the voluntary release of consumers’ electronic data.  Under new plans, companies would have to release data they hold relating to a consumer’s consumption or transactions in an electronic machine-readable format, upon request.

The power to legislate would be focused on three core sectors initially: mobile telecoms, current accounts and credit cards, and energy, with an additional power to extend the legislation to other sectors if appropriate.

The Government’s “midata” programme was developed by the Department for Business, Innovation and Skills using insights and evidence from the Government’s Behaviour Insights Team.  The relationship between businesses and their customers has evolved to being more than simply buying products, the Government says.  With the popularity of loyalty cards, comparison sites and mobile applications, businesses are increasingly helping consumers manage their lives.  According to the Government, “‘midata’ allows people to request their personal data from businesses in a useful format, to allow them to make the best choices for themselves in all their purchases”.  The Government says that “midata” has made “significant progress” as a voluntary measure, with more than 20 leading businesses in the energy, finance and telecoms sectors signing up.  

Benefits to consumers include being able to:

  • view their data to see which energy or mobile tariff suits them better; and
  • keep up to date via one application, and have news of the latest films, music or shows tailored to their previous choices and personal taste.

Employment and Consumer Affairs Minister, Jo Swinson, said: “‘midata’ is all about putting power into the hands of consumers.  Many businesses reap huge commercial benefits from the information they gather from consumers’ daily spending patterns.  Why shouldn’t consumers also benefit from this by having access to their own data to enable them to make better choices?  It’s great when your energy provider tells you how much gas or electricity you’re using at any point in the year or when phone companies tell you which one of their tariffs suits you best.  But it’s even better when consumers can use that information to get better value for money deals or adjust their lifestyles.  This is just one of many ways ‘midata’ can help, as businesses increasingly recognise sharing data as a means to deliver a better service for their customers”.  To read the Government’s press release in full, click here.

Data Protection

European Data Protection Supervisor adopts Opinion on the European Commission Communication Unleashing the potential of Cloud Computing in Europe.

In its Communication, the Commission proposes key actions and policy steps to speed up the use of cloud computing services in Europe.  The EDPS Opinion not only reacts to the Communication but also highlights the data protection challenges created by cloud computing and how the proposed Data Protection Regulation will tackle them when the reformed rules come into effect.

While many businesses, public authorities and consumers expect to benefit from a reduction in IT services costs and/or access to better services when using cloud computing, the main issue of concern for cloud customers is whether the system is reliable and trustworthy, and that data processing operations can be carried out in compliance with data protection rules.

Accountability is a cornerstone of data protection and the responsibilities of all parties involved in cloud computing must be clearly defined in law, the Opinion states.  Without such definitions, the complexity and the involvement of multiple service providers in cloud computing could lead to a division of data protection obligations and responsibilities between cloud customers and cloud service providers that do not reflect their roles and actual influence on the service.  This, in turn, could lead to “a serious lack of protection in practice”.  The risk that no one takes full responsibility for data protection in this complex environment is of real concern, the EDPS says.

In the EDPS’ view, the imbalance of power between cloud customers and cloud service providers could be addressed by developing standard commercial terms and conditions that respect data protection requirements for commercial contracts, public procurement and international data transfers.  This, together with the proposed Data Protection Regulation that provides clear rules to ensure that cloud service providers are fully accountable for their processing, will guard against data protection responsibilities from being “up in the air” and evaporating in the cloud.

Other EDPS recommendations include:

  • clarifying and providing further guidance on how to ensure the effectiveness of data protection measures in practice and the use of binding corporate rules;
  • developing best practices on issues such as controller/processor responsibility, retention of data in the cloud environment, data portability and the exercise of data subjects’ rights;
  • developing standards and certification schemes that fully incorporate data protection criteria;
  • clearly defining the notion of transfer and the criteria under which access to data in the cloud by law enforcement bodies outside the EEA countries could be allowed.

Peter Hustinx, EDPS, said: Cloud computing can bring enormous benefits to individuals and organisations alike but it must also provide an adequate level of protection.  Currently, many cloud customers, including members of social media, have little influence over the terms and conditions of the service offered by cloud providers.  We must ensure that the cloud service providers do not avoid taking responsibility and that cloud customers are able to fulfil their data protection obligations.  The complexity of cloud computing technology does not justify any lowering of data protection standards”.  For a link to the Opinion, click here.

Information Commissioner’s Office publishes Code of Practice on “Anonymisation: managing data protection risk”.

The ICO says that the Code explains how to protect the privacy rights of individuals while providing rich sources of data.  It comes at a time when the UK is putting more and more anonymised data into the public domain, with the government’s open data agenda allowing us to find out more than ever about the performance of public services and holding public bodies to account.

The Code contains a framework to enable practitioners to assess the risks of anonymisation related to data protection and identification of individuals.  It also contains examples of how successful anonymisation can be achieved.  This includes an explanation of how personal data can be anonymised for medical research purposes, how individuals’ information can be anonymised when responding to Freedom of Information requests, and how customers’ data can be anonymised to help market researchers analyse people’s purchasing habits.

Announcing the publication of the Code, Christopher Graham, UK Information Commissioner, said: “We have published our code of practice on managing the data protection risks related to anonymisation to provide a framework for practitioners to use when considering whether to produce anonymised information.  The code also aims to bring a greater consistency of approach and to show what we expect of organisations using this data.  Failure to anonymise personal data correctly can result in enforcement action from the ICO.  However we recognise that anonymised data can have important benefits, increasing the transparency of government and aiding the UK’s widely regarded research community.  We hope today’s guidance helps practitioners to protect privacy and enable the use of data in exciting and innovative ways”.

The ICO has also announced that a consortium led by the University of Manchester, with the University of Southampton, Office for National Statistics and the Government’s new Open Data Institute, will run a new UK Anonymisation Network.  The Network will receive £15,000 worth of funding from the ICO over the next two years to enable sharing of good practice related to anonymisation, across the public and private sector.  The network will include a website, case studies, clinics and seminars.  For a link to the new Code, click here.

European Network and Information Security Agency (ENISA) publishes Report on right to be forgotten.

The right to be forgotten is included in the proposed Regulation on data protection published by the European Commission in January 2012.  ENISA’s Report, “The right to be forgotten – between expectations and practice”, focuses on the technical means to enforce or support the right in information systems and concludes that, in practice, there are technical limitations to implementing the right.  There is also a further need for clear definitions and legal clarifications.

The Report agrees with the European Commission that a “unified and uniform approach is needed and desired in Europe to be able to secure the fundamental right for personal data protection” and the proposed reforms to the data protection laws in Europe is “a clear step in this direction”.  However, in reality, there are technical issues that will need to be addressed.

The Report makes various recommendations:

  • technical means of assisting the enforcement of the right to be forgotten require a clear definition of the scope of personal data, clarification of who has the right to ask for the deletion of personal and what are acceptable ways to effect the removal of data.  When clarifying the definitions, the technical challenges in enforcing the right (and the associated costs) should be considered carefully;
  • a purely technical and comprehensive solution to enforcing the right on the internet is “generally impossible”.  An “interdisciplinary approach” is needed;
  • a possible pragmatic approach would be to require search engine operators to filter references to forgotten information stored inside and outside the EU region;
  • particular care must be taken concerning the deletion of personal data stored on discarded and offline storage devices;
  • data controllers should be required to provide users with easy access to the personal data they store and ways to update, rectify, and delete data without undue delay and without cost to the user (to the extent that this does not conflict with other applicable laws); and
  • research projects and industry should develop techniques and coordinate initiatives that aim to prevent the unwanted collection and dissemination of information (e.g., robot.txt, “do not track” technologies and access control).

ENISA recommends that policy makers should ensure that technologies support the principle of minimal disclosure so that the amount of personal data collected and stored online is minimised.  ENISA also recommends the use of encryption for the storage and transfer of personal data.  Particular attention should be focused on tracking and profiling online, and enforcement solutions should be deployed to block those who do not comply.  For a link to the full report, click here.

Broadcasting

Ofcom sets out next steps for licence renewal of ITV, STV, UTV and Channel 5.

Maria Miller, Secretary of State for Culture, Media and Sport, has written to Ofcom to say she does not intend to block the renewal of the current licences for the Channel 3 services (ITV, STV and UTV) and Channel 5.  This means that Ofcom can now work towards issuing new 10-year licences ahead of the expiration of the current licences at the end of 2014.

However, the Secretary of State has also indicated that she is willing to extend the Channel 3 and 5 licences for a period of one year at Ofcom’s request in the event that Ofcom is unable to reach renewal settlements before the required date.

The next steps in the licence renewal process are:

  • Ofcom will hold a consultation on the process for renewal and the obligations of Channel 3 and Channel 5 for the next licence period, including the Channel 3 licensees’ proposed amendments to their current regional commitments; and
  • Ofcom will carry out an assessment of the financial terms on which the new licences should be offered with a view to publishing a statement in summer 2013.

Under section 229 of the Communications Act 2003 Ofcom is required to prepare a report for the Secretary of State on the effect of licence conditions and other arrangements on the capacity of the existing Channel 3 and Channel 5 licence holders to “contribute, in the next licensing period, to the fulfilment of the purposes of public service television broadcasting in the United Kingdom at a cost to the licence holders that is commercially sustainable”.

Ofcom submitted its report to the Secretary of State in May 2012.  To read Ofcom’s press release in full and for a link to the report, click here.

Ofcom records Broadcasting Code breach against Channel 5 as Big Brother Facebook voting app fails to cope with unanticipated spikes in demand.

On 2 August 2012, Channel 5 suspended voting via Facebook for the remainder of the Big Brother series.  Ofcom was concerned that viewers who had paid for their votes via Facebook on the basis that they could use them until voting closed in the Live Final, were misled because of the premature closure of the voting app.

Channel 5 explained that it had taken steps along with its service provider to predict the likely demand for the application based on combined traffic across its own website and the Facebook application and conducted testing of the application at those levels.  On 16 July 2012 the application experienced an unprecedented spike of 900 requests per second causing servers to fail.  Monitoring identified sporadic server outages at a time when requests per second were peaking at approximately 200.  This, despite an increase in the number of servers.  Because its third party provider could not guarantee that further outages would not occur in the event of spikes in demand, Channel 5 took the precautionary measure of suspending Facebook closing until further tests could be completed.  Channel 5 explained that it posted a message on the Big Brother Facebook page and its own website advising that voting was suspended and explaining that, wherever possible, users eligible for a refund would be contacted via email about the matter.  It also advised that an online form to claim refunds would be available to viewers.

Ofcom considered that the calculations for likely demand did not provide for sufficient contingency in the event of higher than expected spikes in demand, resulting in system failure following spikes that occurred well below the unprecedented rate of 900 requests per second.  Ofcom was therefore concerned that, despite Channel 5 increasing the number of servers available, the peaks in demand for the Facebook application were not significantly higher than had been calculated (for example, a rate of 200 requests per second) but nevertheless caused further outages. 

Ofcom accepted that Channel 5 did not deliberately intend to mislead viewers and noted that the suspension of voting was a precautionary measure.  Ofcom also noted that Channel 5 took steps to rectify the problem and put measures in place to notify viewers of the incident and its provision of refunds wherever possible.  However, Ofcom considered 1,363 viewers were misled that they would be able to place the votes they had bought, albeit unintentionally and recorded a breach of Rule 2.14 of the Broadcasting Code.

Although Ofcom acknowledged that during the Live Final of the 2011 series of Big Brother, the failure of the Facebook app occurred for different technical reasons – user demand for voting on the Facebook application overwhelmed the servers and caused the application to fail in the final ten minutes of voting – it said that it was a serious concern that the Big Brother Facebook application again experienced technical difficulties in the 2012 series.  To read Ofcom adjudication on Big Brother published in Issue 218 of the Broadcast Bulletin (19 November 2012), click here.

Ofcom finds potentially racist comments in Big Brother 2012 not in breach of generally accepted standards because of programme’s robust challenge, but considers approach to sexual violence threats insufficient to remedy very high level of offence.

The 2012 series of Big Brother has attracted complaints with regard to offensive material.  This material included: explicit descriptions of sexual violence against a female Housemate, accompanied by a thrusting gesture with a hairbrush towards the groin; the use of the word “gorilla” to describe a black Housemate; and comments about an Asian Housemate eating with her hands.

In relation to the sexual threats, Channel 5 stated that the Diary Room intervention, the perpetrator’s subsequent embarrassment and his formal apology the next day provided an “appropriate level of context to make it editorially justified for broadcast in compliance with the [Broadcasting] Code”.  With regard to the “gorilla” comment, Channel 5 said that Big Brother had acted swiftly, forcefully and with authority in making it clear to the Housemate in question and the audience that the use of such language in the House was potentially offensive and would not be tolerated.

In Ofcom’s view, while the comments raising issues on the grounds of race certainly had the potential to appear racist to viewers, the robust challenge about the language in the Diary Room and Big Brother’s formal warnings were sufficient to justify the potential offence caused.  Accordingly, Ofcom considered that in these two incidents generally accepted standards were applied and rule 2.3 of the Code was not breached. 

This, Ofcom noted, was in stark contrast to how the explicit verbal threats were handled.  Because Ofcom considers that a threat of sexual violence, with a specific reference to a named individual and to an object to be used in that act, together with an explicit mimicking gesture, has the potential to cause extremely high levels of offence and because Channel 5 did not sufficiently confront the Housemate or issue a formal warning, the regulator recorded a breach of rule 2.3 of the Code.  To read Ofcom’s adjudication on Big Brother 2012, published in Issue 218 of the Broadcast Bulletin (19 November 2012), click here.

Ofcom finds sincere apology sufficient to mitigate potential offence caused by use of the word “retard” in Big Brother’s Bit on the Side.

In an edition of the live programme Big Brother’s Bit on the Side (BBBOTS), and during an interview between presenter and former Housemate, the comment “There’s a lot of functioning retards in there” was made.  The interview continued and at the start of the next part of the programme, the presenter made the following apology to the camera:  “Before we can go any further, we must apologise if anybody took offence to anything Victor said during our strategy chat, so apologies.”

Three complainants were offended by the use of the term “retard”.  In response, Channel 5 said:  “[A] clear and unequivocal apology was made… which made it clear to viewers that Channel 5 considered Victor’s comments capable of causing offence”.  The broadcaster added that the comments were “swiftly removed from the On-Demand version of this programme”.

Referring to its own research into offensive language, Ofcom found that because the derogatory term refers to disability, the use of the word “retard” clearly had the potential to offend.  When considering whether it was justified by context, Ofcom took account of the fact that BBBOTS is a late-night entertainment show, broadcast live, which is known for its comic banter and outspoken guest and audience comments, and that viewers therefore may expect some material likely to offend.  Because the apology was not immediate, the regulator considered that generally accepted standards were not applied and rule 2.3 of the Broadcasting Code was breached.  Nonetheless, Ofcom went on to consider the matter resolved because of the sincerity of the apology and Channel 5’s swift action to remove the offensive content from the online version of the programme.  To read Ofcom adjudication on Big Brother’s Bit on the Side, published in Issue 218 of the Broadcast Bulletin (19 November 2012), click here.

Ofcom consults on its rules for party political and referendum broadcasts and its proposed guidance for broadcast coverage of elections.

The consultation seeks stakeholders’ views on Ofcom’s proposals for amendments to:

  • Ofcom’s rules on Party Political and Referendum Broadcasts (the PPRB Rules); and
  • guidance relating to s.5 (due impartiality) and s.6 (elections) of the Broadcasting Code, including minor amendments to the Code.  The proposed guidance is, Ofcom says, intended to help broadcasters comply with the Code when broadcasters produce their own coverage of elections and referendums.

During election and referendum campaigns, there are three types of broadcast content:

  • party election broadcasts (PEBs) granted by relevant broadcasters to registered political parties under the PPRB Rules;
  • referendum campaign broadcasts (RCBs) granted by relevant broadcasters to designated organisations under the PPRB Rules; and
  • broadcasters’ own coverage of an election (or referendum) campaign, which must comply with ss. 5 and 6 of the Code.

Relevant broadcasters also allocate party political broadcasts (PPBs) to registered political parties under the PPRB Rules.  PPBs are currently granted to the “major parties” for broadcast at certain times during the political year, outside of election periods.

The Communications Act 2003 requires every licensed public service television channel and every national commercial radio service to include “party political broadcasts” (which includes both PEBs and PPBs) and RCBs, and to observe the PPRB Rules for such broadcasts.  Ofcom has the power to make rules that may include provision for determining the political parties on whose behalf PPBs, including PEBs, may be made.  The PPRB Rules contain minimum requirements that licensees must abide by in deciding the allocation, length, frequency and scheduling of PEBs, PPBs and RCBs. 

Ofcom says that several factors informed its review of the PPRB Rules, including in particular the new generation of local television services expected to be launched in 2013.  The Local Digital Television Programme Services Order 2012 amended the 2003 Act to require the new local television licences to contain a condition, requiring them to offer PEBs, PPBs and RCBs in their services.  Therefore, Ofcom is putting forward proposals for amendments to the PPRB Rules ahead of the launch of these services to make clear what will be required in this area. 

Ofcom is not consulting on the fundamental issue of whether particular licensees should be required to offer such broadcasts or not, nor is it considering the question of public engagement with PEBs, PPBs and RCBs (i.e. the public appetite for such broadcasts).  Ofcom considers these issues are more properly matters for Parliament, possibly in any forthcoming Communications Bill. 

The closing date for responses to the consultation is 21 January 2013.  For a link to the consultation documentation, click here.

Litigation

European Parliament backs plans to do away with 27 national rules for recognising judgments in cross-border disputes.

The European Parliament has voted in favour of reforming the rules determining which national court has jurisdiction in cross-border cases and how court judgments issued in one EU country are recognised and enforced in another.

The legislation, proposed by the Commission in December 2010, aims to strengthen the Single Market and cut red tape.  It proposes to abolish the costly “exequatur” procedure, which requires companies to go through a time-consuming and costly court procedure in order to get a civil judgment recognised in another EU country.  Abolishing this administrative procedure is expected to save businesses and consumers up to EUR 48 million a year, the Commission says.  The vote by the European Parliament plenary follows the vote by the Parliament’s Legal Affairs Committee on 11 October 2012, which also endorsed the reforms.  The draft legislation will now pass to the Council for final adoption, expected to take place at the next Council of Justice Ministers in December 2012.

Commissioner Viviane Reding welcomed the vote, saying that “Removing bureaucratic obstacles, extra costs and the legal uncertainty of having 27 different and often contradictory systems makes the single market more attractive.  This is a very good example of how justice policies can stimulate growth.  This reform will save time and money for businesses and consumers because judgments from one EU Member State will be automatically recognised in another EU Member State.  It is a small revolution for the European area of justice which brings us closer to the model of the US Single Market, where, in the words of the US Constitution, judicial proceedings are given ‘full faith and credit’ in every other state of the union”.  To read the Commission’s press release in full, click here.

Publishing

Copyright Licence Agency launches new digital licence for Media Monitoring Organisations.

The CLA says that the digital licence reflects the multiple ways in which Media Monitoring Organisations (MMOs) source content and deliver their services to clients.

In addition to providing the permissions to supply hard copy and digital press clippings from magazines and periodicals to clients, the licence also permits MMOs to index and provide links to content from leading media websites. 

Developed in consultation with media publishers and the UK Media Monitoring Association (UKMMA), the trade body that represents UK Media Monitoring companies, the CLA says that the licence “provides a collaborative solution which supports MMOs in continuing to deliver cutting-edge media monitoring and evaluation services, while ensuring that copyright owners receive a fair reward for their investment in content”.

Mat Pfleger, CLA UK Sales and Marketing Director said, “The new MMO Licence provides a transparent licensing solution for both media monitoring organisations and their customers.  The new permissions for web content are market responsive and will help to ensure that media publishers can continue to invest in their online content offerings.  It has been invaluable for CLA to engage positively with representatives of the media monitoring industry to ensure that the licence reflects their requirements while supporting the interests of copyright owners”.

Steve White, Chairman of UKMMA, said “UKMMA’s members are pleased to have a licence that allows them to serve their clients effectively.  In an ever-changing media environment we cooperate gladly with rights owners and our good relationship with the CLA and the publishers it represents is very important to us”.  To read the press release in full, click here.

Sport

Supreme Court upholds Court of Appeal decision to grant Norwich Pharmacal Order requiring ticket agent Viagogo Ltd to disclose identities of persons advertising and selling rugby tickets on Viagogo’s website for prices far above face value.

The RFU brought the action in respect of tickets for the Autumn International 2010 and the Six Nations 2011.  It alleged that Viagogo had permitted a large number of those tickets to be advertised on its website for sale at prices far above the face value of the tickets, against the RFU’s terms and conditions.  The RFU said that both the sellers and purchasers of the tickets via Viagogo’s website had committed actionable wrongs against the RFU and that Viagogo had become innocently involved in the wrongdoing in such a way that the court should make a Norwich Pharmacal order requiring Viagogo to identify the persons advertising and selling such tickets.

The High Court had granted the RFU a Norwich Pharmacal order requiring Viagogo to disclose the identities of those involved in the sales.  The order was made on the grounds that the RFU had a good arguable case that those selling and purchasing the tickets had been guilty of breach of contract and that it was appropriate to grant the order for them to obtain redress.

Before the Court of Appeal, Viagogo introduced a new ground of appeal to the effect that granting the order represented a disproportionate interference with the rights of the potential wrongdoers under Article 8 of the Charter of Fundamental Rights of the European Union.  Article 8 guarantees the protection of personal data.  The Court of Appeal upheld the decision of the High Court and decided that the RFU had no readily alternative means of pursuing the wrongdoers.  On the new ground the Court of Appeal held that interference with the personal data rights of the individuals was proportionate in light of the RFU’s legitimate objective in obtaining redress for arguable wrongs.  Viagogo appealed to the Supreme Court. 

The issue before the Supreme Court was whether the grant of the order involved a breach of Article 8 of the Charter.

The court considered the principles involved when making a Norwich Pharmacal order.  The need for an order for disclosure will be found to exist only if it is necessary and proportionate in all the circumstances.  The essential purpose of an order was to do justice in the case.  This involved a careful weighing of all the relevant factors including the strength of the cause of action, whether those who have committed the alleged wrong knew or would have been likely to know that what they were doing was unlawful, and the privacy rights of those whose identities were to be revealed.

Further, the court said, any of the factors involved in deciding whether to make a Norwich Pharmacal order were relevant to an assessment of whether disclosure was proportionate in the context of Article 8 of the Charter.  Article 8 was applicable as the order of the High Court involved disclosure of private data and thus was in the material scope of European Law.

The court found that the appropriate test of proportionality under Article 8 involved weighing the benefit of the information being sought by the RFU against the impact that disclosure was likely to have on the individual concerned.  Viagogo was wrong to suggest, however, that the assessment had to be carried out solely by reference to the particular benefit that obtaining information in relation to an individual might bring.  It was artificial and unrealistic to suggest that the RFU’s aim of discouraging others in the future from flouting its rules should not be considered.  The facts of each case must be considered individually but there was nothing in the European cases cited or otherwise which supported the notion that the wider context for which the RFU wished to have the information should be left out of account.

While there should be an intense focus on the rights claimed by the individuals concerned, this was not a case where disclosure would result in oppressive or unfair treatment, the court said.  The only information sought was the names and addresses of individuals who had bought and sold tickets in clear breach of the RFU’s ticket policy.

The particular circumstances affecting a person whose data were sought may in some limited cases displace the interests of the applicant for disclosure even where there was no feasible alternative way of getting the information.  This was not such a case, however, the court said.  (The Rugby Football Union v Consolidated Information Services Limited (Formerly Viagogo Limited) [2012] UKSC 55 (21 November 2012) – to read the judgment in full, click here).

Advertising

Committee of Advertising Practice announces new transparency and choice rules for Online Behavioural Advertising.

New rules providing transparency and choice for consumers around Online Behavioural Advertising (OBA) will be included in the UK Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing from 4 February 2013, the CAP has announced.

The new rules will be enforced by the Advertising Standards Authority and will require:

  • notice to be provided to web users in or around the advertisement delivered by OBA and;
  • choice via an opt-out mechanism to prevent user web viewing behaviour from being collected and used for OBA.

The rules form part of a European Best Practice Recommendation that the European industry has drawn up and similar rules will be incorporated into advertising codes across Europe. 

The CAP will review the rules after 12 months and has published a Help Note to help third parties comply with the new rules before they come into force on 4 February.

CAP Chairman, James Best said: “The new rules surrounding OBA are the latest example of the advertising self-regulatory system responding effectively to the challenge of new technologies and advertising trends.  The ASA’s regulation of OBA will bolster consumers’ on-going trust in how data around their web viewing behaviour is collected by notifying and then enabling them to exercise choice over receiving such ads”.

The ASA has welcomed the announcement and says that it will start regulating the new rules as soon as they come into effect.  To read the CAP’s press release in full and for a link to the new rules, click here.  To read the ASA’s press release in full, click here.

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