HomeInsightsNeed to Know – 2013.01.28

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Technology

Ofcom announces 4G auction under way.

PhonepayPlus fines glamour video download subscription service £90,000.

Data Protection

European Data Protection Supervisor publishes 2013 work programme identifying issues of strategic importance that will form cornerstone of consultation work for 2013.

Information Commissioner’s Office publishes further thoughts on proposals to reform EU data protection framework.

Broadcasting

Department for Culture, Media and Sport urges satellite platforms to end fees for public service broadcasters.

Court of Justice of European Union finds that the amount holders of exclusive broadcasting rights can charge channels for short news reports on events of high public interest can be limited to technical costs only.

Ofcom finds that children were not protected by appropriate scheduling from pre-watershed trailer of Celebrity Juice trailer featuring phallic object.

Ofcom finds repeated references to hotel in The X Factor in breach of Broadcasting Code rules on undue prominence.

Litigation

Supreme Court finds legal advice privilege does not extend to legal advice given by accountants.

Music

PRS for Music reports that progress on creation of Global Repertoire Database has moved ahead strongly over past 12 months.

Publishing

High Level Group on Media Freedom and Pluralism appointed by European Commissioner Neelie Kroes in October 2011 publishes final report.

European Newspaper Publishers’ Association expresses serious concerns about recommendations made by High Level Group on Media Freedom and Pluralism, saying they “amount to a serious backward step for press freedom in Europe”.

Consortium of media companies send letter before claim to UK Government over plans to change copyright law in Enterprise and Regulatory Reform bill.

Press Complaints Commission declines to uphold complaint of inaccuracy, breach of privacy and harassment.

Gambling & Betting

EU law precludes Greek company from having exclusive right to organise and operate games of chance in Greece.

Gambling Commission calls on industry to self-regulate social gaming to avoid legislation.

Technology

Ofcom announces 4G auction under way.

Ofcom has announced that there are seven bidders competing to acquire new airwaves suitable for superfast mobile broadband services:

Everything Everywhere Limited;

HKT (UK) Company Limited (a subsidiary of PCCW Limited);

Hutchison 3G UK Limited;

MLL Telecom Ltd;

Niche Spectrum Ventures Limited (a subsidiary of BT Group plc);

Telefónica UK Limited; and

Vodafone Limited.

Ofcom says that the new spectrum will almost double the amount of airwaves currently available for mobile broadband services on smartphones, tablets and laptops.

Ed Richards, Ofcom Chief Executive, said: “Today’s 4G auction is a very significant milestone for the UK’s communications sector.  It will release the essential raw material for the next wave of mobile digital services. This will change the way we consume digital media in both our personal and working lives and deliver significant benefits to millions of consumers and businesses across the country”.

Ofcom says that it has designed the auction to ensure that at least four different operators have sufficient spectrum to be credible national 4G wholesalers.  “The net benefit of doing this, for consumers and the UK economy as a whole, will be very significantly greater than any immediate financial benefits from revenue raised by the auction”, it says.

Bids are being placed online over secure connections, using software that has been developed specifically for the auction.  The bidding will continue over several rounds and is expected to take a number of weeks until the final winners are known.

Once fees are paid, licences will be granted, enabling operators to start rolling out new networks.  It is expected that services will be launched by a range of providers from late spring/summer 2013.  To read Ofcom’s press release in full, click here.

PhonepayPlus fines glamour video download subscription service £90,000.

The “SexDose” service operated by Syncronized Ltd offered glamour video downloads at a cost of £3 per week.  PhonepayPlus received 58 complaints from consumers who mostly reported that they incurred premium rate charges without giving their consent.  Some also complained that they had not agreed to receive promotional material.  On 10 January, the PhonepayPlus Tribunal upheld two breaches of the PhonepayPlus Code of Practice and imposed a formal reprimand, a fine of £90,000 and a requirement that the provider must refund all consumers who claim a refund, for the full amount spent by them on the service, within 28 days of their claim, save where there is good cause to believe that such claims are not valid, and provide evidence to PhonepayPlus that such refunds have been made.  The full minutes of the case are accessible through the PhonepayPlus adjudications database.  To access the database, click here.

Data Protection

European Data Protection Supervisor publishes 2013 work programme identifying issues of strategic importance that will form cornerstone of consultation work for 2013.

The key areas of strategic importance that will form the basis of the EDPS’ consultation work for 2013 comprise:

  • A new legal framework for data protection;
  • Technological developments and the Digital Agenda;
  • Further developing the Area of Freedom, Security and Justice;
  • Financial sector reform; and
  • eHealth.

In addition, the EDPS will consider issuing opinions on the integration of data protection in other policy areas of the EU, such as competition and trade.

Peter Hustinx, EDPS said: “We live in a technically-mediated world that is constantly evolving. The visibility and relevance of data protection is, thus, greater than ever.  The need to take account of the privacy and data protection implications of legislative proposals is becoming essential in all areas of EU policy and leads to an influx of new policy areas for us to deal with.  It is becoming increasingly apparent that the fundamental right to data protection cannot be regulated only in data protection law, but that many other different policy areas have to take data protection into account”.

As for the two proposals for reforming the EU data protection framework, the EDPS said that the ongoing work had been the subject of intense speculation and interest to stakeholders at national, European and international level.  The review process has now reached an advanced stage and the EDPS will continue to follow developments.  He also said that he “foresees ongoing and timely involvement in this and related upcoming initiatives, such as on ePrivacy”.  To read the European Commission press release in full, click here.

Information Commissioner’s Office publishes further thoughts on proposals to reform EU data protection framework.

The ICO says that, however the law is implemented in Member States, there needs to be “as much consistency as possible between the various instruments.  Any substantive inconsistency between a General Data Protection Regulation and a criminal/judicial processing Directive “will be a source of difficulty and confusion for years to come”, it says.  For this reason, any move to create a separate instrument governing processing in the public sector should be resisted.

According to the ICO, the current proposal is too prescriptive in terms of its administrative detail and the processes organisations will have to undertake to demonstrate accountability.  Essentially, there needs to be more emphasis on outcomes rather than processes and for a truly risk-based approach to compliance.

Further, the scope of the law needs to be “as clear as we can make it”, particularly the definition of “personal data”.  In particular, the status of pseudonymised data needs to be clarified and, if covered, needs to be treated realistically for the digital information society age.  The same considerations apply to non-obvious identifiers such as logs of IP addresses generated online.  This is important in areas as diverse as medical research and internet content delivery, the ICO says.

Individuals need dependable rights, the ICO Says.  “This means rights they understand and that can be delivered in practice”.  Individuals need more control over their personal information, the ICO says, but there is a danger that the “right to be forgotten” will lead them to expect a degree of protection that cannot be delivered in practice.  

The ICO supports a high level of consent, so that there is as little doubt as possible as to whether individuals have, or have not, agreed to their personal data being processed in a particular way.  However, there must be “a coherent set of alternatives to consent for situations where consent is not viable”.

Further, for data protection law to make sense there has to be scope for flexibility and recognition of genuine and fundamental differences in national legal traditions.  To read the ICO’s further thoughts in full, click here.

Broadcasting

Department for Culture, Media and Sport urges satellite platforms to end fees for public service broadcasters.

Speaking at the Oxford Media Convention, Communications Minister Ed Vaizey called on satellite platforms to end the fees they charge public service broadcasters for carrying their channels.  Paying millions of pounds to be broadcast on satellite is not “fair or equitable”, he said.

The BBC and other public service broadcasters currently pay millions of pounds a year to be shown by satellite platforms, while cable networks carry these channels without payment.

Mr Vaizey said: “We’re not going to rush into a regulatory solution because I believe there’s no reason the market should not be able to work out a fair, equitable solution.  But if the industry cannot find a way to stop imposing this cost on Licence Fee payers and public service broadcasters, we will look at our options for intervention”.

Mr Vaizey also spoke about the broad approach the Government would be taking in the forthcoming Communications Review White Paper.  The White Paper will focus on three key areas: a) connectivity and infrastructure; b) content; and c) consumers. 

Mr Vaizey said: “People have told us that, for the most part, our regulatory framework is working.  The way forward is evolution rather than revolution.  We need a regime that is responsive and flexible enough to regulate a fast paced environment.  We need these industries to continue to innovate, to show leadership and to take responsibility”.  To read the DCMS press release in full, click here.

Court of Justice of European Union finds that the amount holders of exclusive broadcasting rights can charge channels for short news reports on events of high public interest can be limited to technical costs only. 

Sky Österreich, which broadcasts by satellite the digital television programme Sky Sport Austria, acquired exclusive rights to broadcast Europa League matches in the 2009/2010 to 2011/2012 seasons in Austria.  In accordance with the Audiovisual Media Services Directive (2010/13/EU), the Austrian communications regulator, KommAustria, required that Sky grant ORF (an Austrian public broadcaster) the right to make short news reports on the matches, without taking into consideration the costs that Sky claimed it incurred each year on the licence and production of the programme.  No costs were directly incurred in providing access to the satellite signal. 

Sky contested the decision and the Austrian court asked the CJEU whether the Audiovisual Media Services Directive, in so far as it limits the amount rights holders can charge to additional costs directly incurred in providing access to the signal, was compatible with the Charter of Fundamental Rights of the European Union, which guarantees the right to property and the freedom to conduct a business.  The CJEU found that the Charter does not preclude such a limitation.

As far as the protection of property was concerned, the CJEU recognised that exclusive broadcasting rights, such as those acquired by Sky, have asset value and do not constitute mere commercial interests or opportunities. However, when Sky acquired those rights by means of a contract (in August 2009), the provision on limiting the amount that can be charged for short news reports already existed in EU law in the form of the Television Without Frontiers Directive (89/552/EEC as amended by the AVMS 2007/65/EC) and now consolidated into the AVMS (2010/13/EU).  Therefore, Sky could not rely on the protection of property principle as a means of exercising its exclusive broadcasting rights autonomously.  

By contrast, however, the court did find that the legislation in dispute encroached upon the freedom to conduct a business.  It prevented, in particular, the holder of exclusive broadcasting rights from freely deciding on the price to be charged for access to the signal and from requiring that broadcasters who produce short news reports contribute to the costs involved in acquiring those rights.  However, the court said that the freedom to conduct a business, as a fundamental freedom, could be subject to intervention by the legislature, which was entitled to limit economic activity in the public interest.  

The court concluded that the limitation on the freedom to conduct a business was justified and that it was in line with the principle of proportionality.  The limitation sought to safeguard the fundamental freedom to receive information and to promote pluralism of the media, as guaranteed by the Charter.  Moreover, the limitation in question was necessary and appropriate in order to protect the general interest.  The EU legislature was entitled to consider that allowing for compensation to be paid to holders of exclusive broadcasting rights over and above the costs incurred in providing access to the signal would not protect the general interest and to legislate accordingly.

Finally, the contested legislation was proportionate.  In safeguarding the freedom to receive information and the freedom to conduct a business, the EU legislature was entitled to adopt rules limiting the freedom to conduct a business and prioritising public access to information over contractual freedom.  In any event, looking at the legislation as a whole, the various rights and freedoms at issue in this case were fairly balanced, the court said.  The AVMS Directive provides that short news reports may only be produced for general news programmes and not, for example, entertainment programmes.  In addition, those short extracts should not exceed ninety seconds and their source must be stated.  Moreover, the Directive does not prevent holders of exclusive broadcasting rights from charging for the use of their rights.  Similarly, the absence of a possibility of refinancing through set-off and any reduction in the commercial value of those exclusive broadcasting rights may, in practice, be taken into account during contractual negotiations for the acquisition of such rights and be reflected in the price paid.  (Case C-283/11 Sky Österreich GmbH v Österreichischer Rundfunk (ORF) – to access the judgment in full, go to the curia search form, type in the case number and follow the link).

Ofcom finds that children were not protected by appropriate scheduling from pre-watershed trailer of Celebrity Juice trailer featuring phallic object.

The trailers were shown at various times pre-watershed on ITV2 and ITV4 and featured images of the host of the comedy panel game show, Keith Lemon, gyrating to music, kissing the head of a male guest, with a woman lying prostrate on the ground and with a man, both stripped to the waist, flexing their pectoral muscles.  There was also one particular shot, which Ofcom said raised issues under the Broadcasting Code, featuring the rapper, Example, wearing a pink object around his waist and over his clothes.

ITV said that the trailers were restricted to ITV2 and ITV4 (the target audience for both being older people), were not shown adjacent to children’s programmes and contained no overtly sexual material.  ITV also suggested that the pink object did not bare any close resemblance to the anatomical shape of an actual penis.

Ofcom basically said that it knew a dildo when it saw one and considered that although very brief, the mid-shot meant that the phallic object was unmistakable.  In Ofcom’s opinion, the image was likely to have exceeded the expectations of the audience (and especially parents) for the content of trailers shown pre-watershed on these channels, particularly in light of that fact that broadcasters cannot give warnings in advance to viewers about the content of trailers as they can do for programmes.  Accordingly, Ofcom concluded that children were not protected by appropriate scheduling from this unsuitable material and found the programme in breach of rule 1.3.  To read the adjudication, published in Issue 222 of the Broadcast Bulletin (21 January 2013), click here.

Ofcom finds repeated references to hotel in The X Factor in breach of Broadcasting Code rules on undue prominence.

This episode showed contestants arriving at the Corinthia Hotel in London where they would be staying during the Live Finals.  Ofcom noted references to the hotel during the various pre-recorded introductions (V/Ts) to eight of the 13 acts, including an exterior shot of the hotel along with the following comment, “It’s absolutely amazing here.  I’ve never really seen anything like it to be honest.  It’s a million miles away from the place I live back home.”  The other 5 VTs included only visual references to the hotel.

ITV said that there was editorial justification for seeing the arrivals at the hotel and said that the comments were no more than spontaneous reactions to the new surroundings in which the contestants found themselves.  Nevertheless, it accepted that there would not be the same editorial justification for such references in succeeding episodes, as the location would already have been established with viewers.

Ofcom considered there was insufficient editorial justification for the shots of the hotel in the 5 VTs, particularly given the number of other visual and verbal references to the hotel in this episode.

With regard to the other 8 VTs, Ofcom accepted that there was editorial justification for some verbal references to the hotel to convey the contestants’ excitement at their new surroundings, and that in isolation each reference to the Corinthia Hotel for that purpose did not raise issues of undue prominence.  Nonetheless it considered that there was insufficient editorial justification for the repeated references to the hotel during the programme and concluded that the cumulative effect of these references resulted in the programme as a whole giving undue prominence to the hotel.  Accordingly, the programme breached rule 9.5 of the Code.  To read the adjudication published in Issue 222 of the Broadcast Bulletin, click here.

Litigation

Supreme Court finds legal advice privilege does not extend to legal advice given by accountants.

The specific issue raised by the appeal by Prudential plc was whether, following receipt of a statutory notice from an inspector of taxes to produce documents in connection with its tax affairs, Prudential was entitled to refuse to comply on the ground that the documents were covered by legal advice privilege, in a case where the legal advice was given by accountants in relation to a tax avoidance scheme.  The more general question raised was whether legal advice privilege extends, or should be extended, so as to apply to legal advice given by someone other than a member of the legal profession, and, if so, how far legal advice privilege thereby extends, or should be extended.

The majority of their Lordships held that legal advice privilege should not be extended to communications in connection with advice given by professional people other than lawyers, even where that advice is legal advice which that professional person is qualified to give.  To do so, they found, would extend legal advice privilege beyond what are currently, and have for a long time been, understood to be its limits.  There are clear judicial statements of high authority stating that legal advice privilege only applies to communications in connection with advice given by members of the legal profession. 

Extending legal advice privilege to any case where legal advice is given by a person who is a member of a profession which ordinarily includes the giving of legal advice would be likely to lead to a clear and well understood principle becoming uncertain, the court said, because it is unclear which occupations would be members of a profession for this purpose.  There would be room for uncertainty, expenditure, and inconsistency, if the court had to decide whether a group constitutes a profession for the purposes of legal advice privilege.  It is also unclear how a court would decide whether a profession is one that ordinarily includes the giving of legal advice.  Where members of other professions give legal advice, it will often not represent the totality of the advice, so it may also be difficult to decide how to deal with documents that contain legal and non-legal advice.

Further, their Lordships found, the extension of legal advice privilege to cases where legal advice is given from professional people who are not qualified lawyers raises questions of policy which should be left to Parliament.  The consequences of extending legal advice privilege should be considered through the legislative process, with its wide powers of inquiry and consultation and its democratic accountability.  Parliament has on a number of occasions legislated in this field on the assumption that legal advice privilege only applies to advice given by lawyers. Therefore it would be inappropriate for the Supreme Court to extend the law.  (R v Special Commissioner of Income Tax and another [2013] UKSC 1 (23 January 2013) – to read the judgment in full, click here).

Music

PRS for Music reports that progress on creation of Global Repertoire Database has moved ahead strongly over past 12 months.

PRS for Music says that, with the completion of the Scoping Study and the commencement of the Requirements and Design Phase, creation of the GRD is progressing well and “2013 will mark some important milestones in the realisation of the project”.

PRS for Music explains that the scope of the GRD is “to provide, for the first time, a single, comprehensive and authoritative representation of the global ownership and control of musical works”.  PRS for Music believes that once deployed the GRD will save extensive costs, currently lost to duplication in data processing.

Delivery of the project is driven by the GRD Working Group, which consists of representatives from 14 organisations of creators, publishers, collective management societies, digital service providers and their trade associations. 

Andrew Jenkins, Chair of ICMP (International Confederation of Music Publishers) commented: “ICMP and its music publisher members around the world are committed to the development of the Global Repertoire Database which will benefit all those who have a stake in improved music licensing processes including creators, music publishers, collecting societies, music suppliers and fans of music everywhere.  Indeed, it is impossible to argue against the benefits of the GRD for the wider community and all of us involved are working together to deliver something that will be a game-changer for the industry”.

Robert Ashcroft, Chief Executive of PRS for Music, added: “The Global Repertoire Database is the building block for the future success of the legal online music market.  PRS for Music has supported the project from the outset and we are committed to making the initiative work for the benefit of rights holders and rights users globally”.

PRS for Music says that GRD will be set up as a legal entity during this next project phase, the business plan will be completed and the logical technology architecture for the system will be defined.  In mid-2013, the project will move into the technology build, with a first release of the database due in 2015.  To read the PRS for Music press release in full, click here.

Publishing

High Level Group on Media Freedom and Pluralism appointed by European Commissioner Neelie Kroes in October 2011 publishes final report.

The remit of the Group was to provide a set of recommendations for the respect, protection, support and promotion of pluralism and freedom of the media in Europe.

Essentially, the Group says that the EU should have a bigger role in supporting media freedom and pluralism in the EU and beyond.  Further, it says, the recommendations in the Report should be understood as “an encouragement to develop the overall EU framework, ensuring that high quality media can continue to contribute to European democracy across the EU”.

Key recommendations include:

  • The EU should be considered competent to act to protect media freedom and pluralism at Member State level in order to guarantee the rights of free movement and to representative democracy.  There should be further harmonisation of EU legislation to avoid “distortions in the framework of cross-border media activities, especially in the online world”;
  • European and national competition authorities should take into account the specific value of media pluralism in the enforcement of competition rules.  In particular, the Group says, the dominant position held by some network access providers or internet information providers should not be allowed to restrict media freedom and pluralism.  Accordingly, national competition authorities need to carry out regular assessments of individual countries’ media environments and markets, highlighting potential threats to pluralism;
  • The EU should set up an agency with a monitoring role of national-level freedom and pluralism of the media.  The agency would issue regular reports about any risks to the freedom and pluralism of the media in any part of the EU.  Alternatively, the EU could establish an independent monitoring centre, which would be partially funded by the EU but would be fully independent in its activities;
  • Journalist and media organisations should adapt their codes of conduct and journalistic standards to the challenges posed by a rapidly changing media environment.  In particular, they should clearly address questions of source verification and fact checking, as well as transparently regulating their relationship with external sources of news;
  • Channels through which media are delivered to the end user should be entirely neutral in their handling of content.  In the case of digital networks, Net Neutrality and the end-to-end principle should be enshrined within EU law;
  • Quality journalism should be streamlined and Europe-wide awards should be made available for talented journalists;
  • Public funding should only be available for media organisations that publish a code of conduct easily accessible to the public.   Further, it should be given on the basis of non-discriminatory, objective and transparent criteria made known in advance to all the media;
  • Member States should intervene financially whenever there is a market failure leading to the under-provision of pluralism;
  • It should be mandatory for media organisations to make their codes of conduct and editorial lines publicly available;
  • All EU countries should have independent “media councils” that check that media organisations have published a code of conduct and have revealed ownership details, declarations of conflicts of interest, etc.  Media councils should have real enforcement powers, such as the imposition of fines, orders for printed or broadcast apologies, or removal of journalistic status.  The national media councils should follow a set of European-wide standards and be monitored by the Commission to ensure that they comply with European values;
  • A network of national audio-visual regulatory authorities should be created to help in sharing common good practices and set quality standards;
  • Any public ownership of the media should be subject to strict rules prohibiting governmental interference, guaranteeing internal pluralism and placed under the supervision of an independent body representing all stakeholders;
  • All EU countries should have enshrined in their legislation the principle of protection of journalistic sources, restrictions to this principle only being acceptable on the basis of a court order, compatible with the constitution of that country;
  • Member States should ensure that appropriate instruments are put in place for identifying those responsible for harming others through the media, including online.  Any internet user-data collection necessary for this purpose should be kept confidential and made available only by a court order;
  • Compulsory damages following court cases should include an apology and retraction of accusations printed with equal positioning and size of the original defamation, or presented in the same time slot in the case of radio or TV programmes.  Further, it should become accepted as responsible practice among news media to publish retractions and corrections of wrong and unverified information on the simple request of citizens providing justification to the contrary.  

For a link to the full report, click here.

European Newspaper Publishers’ Association expresses serious concerns about recommendations made by High Level Group on Media Freedom and Pluralism, saying they “amount to a serious backward step for press freedom in Europe”.

The High Level Group on Media Freedom and Pluralism, appointed by European Commissioner, Neelie Kroes, recently published its final report (see item above).

ENPA is critical of the recommendations made, particularly the call for Europe to have greater powers to oversee national press councils to ensure they “comply with European values”.

ENPA President, Ivar Rusdal, said: “It is regrettable that the High Level Group, after extensive work, misses its target completely.  The report opens with a good outline of the basic principles of press freedom and the role of free media in modern democracies.  But after that, the report demonstrates that this expert group really has too little confidence in these principles, particularly when it comes to their ability to overcome the forces acting against these freedoms.  The High Level Group proposes a Europe-wide system of political control of the media, reminding me of political systems that we have fought hard and paid a high price to abolish.  Independent newspaper publishers will never accept such EU control over the media”.

ENPA had met with the High Level Group and provided background information as part of the Group’s consultation exercise. While the final report includes some positive recommendations, ENPA says, such as the need for media literacy education in schools, “it fails to recognise the true value of media self-regulation”.

ENPA expressed hope that a “strong and unequivocal” response from the press sector will make the Commission and European Parliament look critically at the Group’s proposals, which if enacted would amount to “a serious backward step for press freedom in Europe”.  To read ENPA’s press release in full, click here.

Consortium of media companies send letter before claim to UK Government over plans to change copyright law in Enterprise and Regulatory Reform bill.

The consortium, which includes The Associated Press, Getty Images, Reuters, British Pathé and The Press Association have called on the UK Government to rethink its plans to reform UK copyright law as set out in the Enterprise & Regulatory Reform Bill.  The consortium has delivered a letter before claim to Business Secretary, Vince Cable, which is the first step in the process of initiating a Judicial Review.

The consortium is concerned about three proposals that it believes will damage the UK economy: a) the widening of the “exceptions to copyright”, which the consortium argues will remove many instances where creators can currently be paid for their work; b) the shortening of the term of copyright in some circumstances; and c) Extended Collective Licensing which, The Associated Press says, “allows for third party organisations to commercially exploit the copyrighted works of others without their prior consent”.  The consortium is concerned that reducing or removing rights holders’ ability to commercially license their content will have a direct impact on their ability to create it, leading to both economic and societal damage.  Further, the consortium believes that the economic growth arguments originally put forward to justify the Government’s proposals are without basis and has challenged the Government’s plans to introduce its proposed changes through secondary legislation, which is not subject to the full scrutiny of Parliament.

The consortium believes that any changes to the UK’s copyright framework should be industry-led.  It says that it fully supports the creation of the “Copyright Hub”, the industry-led initiative to create a digital registry of copyrighted works.

A spokesperson for the consortium said, “The UK’s content licensing sector is one of Britain’s great success stories, revered throughout the world and characterised by technical innovation and enterprise.  The sector contributes billions of pounds to the UK economy and the changes being introduced through the Enterprise & Regulatory Reform Bill have the potential to seriously disrupt a vibrant and growing industry sector.  We call on the Government to listen to businesses and to work with them in growing the UK’s digital economy”.  To read The Associated Press’ press release in full, click here.

Press Complaints Commission declines to uphold complaint of inaccuracy, breach of privacy and harassment.

Mr Lee Turnbull complained to the PCC that an article headlined “Council denies service manager jumped queue for 3 bedroom house”, published in the Hull Daily Mail on 22 May 2012, was inaccurate and intrusive in breach of Clauses 1 (Accuracy) and 3 (Privacy) of the Editors’ Code of Practice.  He also complained that the newspaper had breached Clause 4 (Harassment).

The article reported claims by unnamed sources connected to the Hull City Council housing department that the complainant, a customer services manager at the Council’s Neighbourhood and Families Department, had “jumped the queue” to secure council housing eight weeks after he had joined the list.  The complainant said that the allegations had been fully investigated by the Council and that it had informed the newspaper before publication that the allocation had been made in accordance with its policies and procedures.  He questioned the motivations of the newspaper’s source.  In his view, there was no reason to publish the story once the Council had confirmed the outcome of its investigation.

The complainant also objected to the publication of information about his professional role and approximate salary, and pictures of him and the street on which he lives.  He believed that this had potentially endangered him and his family, and said it had led members of the public to abuse him at work.  He also said the newspaper had harassed him by putting notes through his letterbox requesting his comment on the story.

The newspaper said that it had been approached by a “whistle-blower” who made allegations about bad practices within the Council’s housing department, giving the complainant’s case as an example.  Its source had raised concerns about the relatively brief time the complainant had been waiting; the nature of the housing he had been allocated, given his personal circumstances; and the fact that 51 other bids had been made for the property, including several with more “priority points”.  The newspaper said it had prominently published the Council’s denial of any impropriety, including in the headline.

The newspaper argued that there was a public interest in investigating the matter and in identifying the complainant as the subject of the allegations.  It denied any harassment: its journalist had made a legitimate approach for comment and, after visiting the complainant’s home three times and getting no answer, had simply posted a note under the door.

The PCC said that procedures by which council housing is allocated are complex and regularly attract confusion and concerns about unfairness.  An allegation that a public servant working for the Council had received preferential treatment was “unquestionably an appropriate matter for investigation by the newspaper”.

The PCC said that it sympathised with the complainant’s desire to avoid potentially embarrassing publicity and understood why, given that no wrongdoing had been established, he viewed the coverage as unnecessary.  It nonetheless considered that there was “a very substantial public interest” in ventilating the source’s detailed claims along with the Council’s response.  

The PCC noted that, while the complainant denied that the factors cited in the article supported a claim of impropriety, the accuracy of those details was not in serious dispute.  Readers would not have been misled about the nature of the allegations, or the fact they were disputed.  There was therefore no breach of Clause 1.  Furthermore, the decision to publish this material, thereby identifying the complainant, did not, in itself, raise a breach of Clause 3.

The photograph of the complainant had been taken, with his consent, for use with a previous story.  The PCC found that its republication in this context did not raise issues under Clause 3.  A second photograph showed several homes (including the complainant’s) on his street, which was named in the caption.  While the complainant had expressed general concerns about his security, in the absence of information about any specific threat the PCC did not consider that the publication of the photograph breached Clause 3.

Finally, information about the approximate salaries of the Council’s employees was published on its website, and the complainant did not appear to dispute that the newspaper was in a position to obtain information on this point through a FOI request.  The complainant’s role as a public servant was not a private matter, and it was in any event central to the story.  It was therefore reasonable, the PCC said, to note the complainant’s salary in the context of wider questions about the relative priorities assigned to those on the list.  This did not breach Clause 3.

As for Clause 4 (Harassment), seeking the complainant’s comment was an important step in verifying the accuracy of the story, the PCC said.  The communication of such a request as part of a legitimate investigation did not raise issues under the terms of Clause 4, in the absence of any request from the complainant for the newspaper to desist.  The complaint was not upheld.  To read the PCC adjudication on Mr Lee Turnball v Hull Daily Mail (18 January 2013) in full, click here.

Gambling & Betting

EU law precludes Greek company from having exclusive right to organise and operate games of chance in Greece.

In Greece, the organisation and operation of games of chance and betting forms are entrusted, until 2020, to the public limited company, OPAP (Organismos prognostikon agonon podosfairou AE) listed on the Athens Stock Exchange.  The Greek State approves the regulations governing OPAP’s activities and monitors the procedure applied in organising the games, whilst also being a minority shareholder (34%).  OPAP fixes the maximum amount of the bet and winnings per form (and not by player) and may use up to 10% of the advertising space in stadia and gymnasia free of charge.  It has also expanded its activities abroad, in particular in Cyprus.

Stanleybet, William Hill and Sportingbet brought proceedings before the Greek court against the Greek authorities’ rejection of their applications to be granted permission to provide sport betting services in Greece.  The Greek court made a reference to the Court of Justice of the European Union, asking whether EU law, particularly the principles of the fundamental freedoms (freedom of establishment and freedom to provide services), precluded national legislation from granting the exclusive right to operate games of chance to a single entity.  

The CJEU noted that national legislation that grants a monopoly to a single entity and prohibits providers established in other Member States from offering the same games of chance on Greek territory constitutes a restriction on the freedom to provide services and on the freedom of establishment.  It then examined whether such a restriction was permitted as a derogation on grounds of public policy, public security or public health, or whether it was justified by overriding reasons in the public interest.

The court also observed that legislation on games of chance was one of the areas in which there were significant moral, religious and cultural differences between Member States and that, in the absence of harmonisation, it was for each Member State to determine what was required in order to ensure that the interests in question were protected.  Therefore, as already established by case law, restricting the supply of games of chance and combating criminality linked to those games may justify restrictions on fundamental freedoms.

The Court emphasised, however, that restrictive measures imposed by Member States must satisfy the conditions of proportionality and non-discrimination, whilst actually ensuring attainment of the objectives sought in a consistent and systematic manner.  It was therefore for the national court to ensure that national legislation genuinely met the target of reducing opportunities for gambling and combating criminality.

The court suggested that the national court should, as far as reducing opportunities for gambling was concerned take account of the legislative framework governing OPAP and the manner in which it operates in practice, such as the fact that OPAP enjoys certain rights and privileges for advertising, or the fact that the maximum bet is fixed per form (and not per player).  As for combating criminality, the national court should verify the effectiveness of government control, bearing in mind that a measure as restrictive as a monopoly should be subject to strict control, yet the Greek state’s supervision of OPAP, a listed public limited company, appeared to be merely superficial.

The court held that EU law does indeed preclude national legislation from granting exclusive rights for providing games of chance to a single entity, unless it is genuinely reducing opportunities for gambling, and limits activities in the  industry in a consistent and systematic manner or strictly controls expansion of the sector solely in so far as is necessary to combat criminality.

The court further stated that, because of the primacy of directly-applicable EU law, national legislation which includes restrictions that are incompatible with the freedom of establishment and the freedom to provide services cannot continue to apply during a transitional period.  Consequently, during that period, national authorities may not refrain from considering applications.

The court said that Greece had two possible courses of action:

  1. if it finds that the liberalisation of the market for games of chance is incompatible with the level of consumer protection and the preservation of order in society, Greece may instead reform the monopoly and make it subject to strict and effective controls by the public authorities;
  2. if, on the other hand, Greece opts to liberalise the market, it must observe the principles of equal treatment and of non-discrimination on grounds of nationality, as well as the obligation of transparency.  The introduction of an administrative permit scheme, for instance, must be based on objective, non-discriminatory criteria, so that national authorities’ discretion is not used arbitrarily.

(Joined Cases C-186/11 and C-209/11 Stanleybet International Ltd, William Hill Organization Ltd, William Hill Plc and Sportingbet plc v Ypourgos Oikonomias kai Oikonomikon, Ypourgos Politismou – to access the judgment in full, go to the curia search form, type in the case number and follow the link).  

Gambling Commission calls on industry to self-regulate social gaming to avoid legislation.

In a speech to industry experts, Gambling Commission Chairman, Philip Graf, highlighted the Commission’s continuing work in assessing the potential risks of social gambling.  Mr Graf outlined how the Commission’s approach could be shaped by effective self-regulation.

Mr Graf said: “We have no desire to widen our regulatory scope unless necessary, but we must continue to assess the nature and size of these risks”.

Mr Graf explained that the risks broadly fall into two categories, whether young people or other vulnerable people might develop problem gambling characteristics from social gambling and whether there is any possibility of consumers being duped by rigged games or unscrupulous or incompetent operators.

The Commission announced last year that it was seeking to better understand whether there were aspects of social gambling that posed risks to the public and, if there were, whether adequate protections were already in place.  The Commission says that work is already underway with the commissioning of a review of existing knowledge and trends and a formal request for advice to the Responsible Gambling Strategy Board (RGSB).  Last month the RGSB brought together research experts and practitioners to discuss the issues in an event held by the Commission.

Mr Graf concluded by saying: “A lot depends on whether those who provide gambling-like social games consider the potential risks to players and implement the necessary responsible gambling consumer protection measures.  I would suggest it is in their interests to self-regulate if they want their business model to be sustainable”.  To read the Commission’s press release in full, click here.

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