HomeInsightsNeed to Know – 2013.04.22

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General

Court of Appeal deals significant blow to those advocating general implied duty of good faith in contractual relations.

Department for Culture, Media and Sport publishes consultation on “Classifying and Measuring Creative Industries”.

Technology

Supreme Court makes reference to Court of Justice of European Union on whether browsing material on internet is infringement of copyright.

Coalition for a Digital Economy (COADEC) calls on technology businesses to sign letter to European Commissioner Neelie Kroes urging support for net neutrality.

Intellectual Property Office announces consultation on bringing in new “superfast” patent processing service capable of granting patents in 90 days.

Ofcom consults on proposals to simplify non-geographical telephone numbers.

Litigation

Law Commission publishes consultation on groundless threats.

Music

European General Court partially annuls Commission decision finding anti-competitive conduct on part of copyright collecting societies.

Intellectual Property Office publishes response to consultation on implementation of Directive extending term of copyright in sound recordings, performers’ rights in sound recordings and certain co-written works.

PRS for Music agrees new licensing deal with commercial radio.

Publishing

High Court awards £100,000 damages for defamation and aggravated damages of £20,000 for online publication to compensate for distress and harassment.

Government refines proposals for incentives as part of new system of independent self-regulation of press.

Computer Games

European Commission opens in-depth investigation into proposed UK video games tax relief.

Office of Fair Trading investigates free children’s web and app-based games.

Advertising

High Court says Transport for London’s decision not to allow advertisement reading “NOT GAY! EX-GAY, POST-GAY AND PROUD. GET OVER IT!” to be displayed on side of buses was not infringement of Article 10 rights.

ASA censures online dating site’s ad on Facebook for encouraging “grooming”.

General

Court of Appeal deals significant blow to those advocating general implied duty of good faith in contractual relations.

The case concerned a substantial contract dated 1 April 2008 for the provision of services for seven years to two NHS Trust hospitals by Medirest.  At first instance the court held that both parties to the contract were entitled to terminate by reason of the other party’s conduct.  On appeal the main issues were (i) the effect of an express obligation to “co-operate … in good faith” and (ii) whether there was an implied term that the Trust would not act in an arbitrary, irrational or capricious manner in assessing Medirest’s performance.

For these purposes the key terms of the agreement were as follows:

  • The Trust and the Contractor will co-operate with each other in good faith and will take all reasonable action as is necessary for the efficient transmission of information and instructions and to enable the Trust or, as the case may be, any Beneficiary to derive the full benefit of the Contract.
  • The Trust or any Beneficiary shall ascertain whether the Contractor’s provision of the Services meets the performance criteria as specified in the Service Level Specification or, if the criteria are not so specified, meets the standards of a professional provider of the Services.  Where such performance criteria or standards have not been met by the Contractor in the performance of the Services then the Trust shall be entitled to levy payment deductions against the monthly amount of the Contract Price payable to the Contractor in accordance with the terms of the Payment Mechanism. In addition, the Trust may by notice to the Contractor award Service Failure Points depending on the performance of the Services as measured in accordance with the Service Level Specification.” 

Under the payment mechanism the Trust was entitled to make deductions from the payments due to Medirest, depending on the severity of the performance failure (£5 (minor), £15 (medium) and £30 (major)).  If a performance failure was not rectified within a specified remedial period further deductions would apply for successive remedial periods until such time as the performance failure was rectified, meaning that sums could mount up swiftly, in addition to Service Failure Points.

Jackson LJ, giving the lead judgment in the Court of Appeal, said that there was no need for any implied term as the Trust was not exercising a discretion but rather exercising an absolute contractual right in accordance with the contract which contained precise rules as to how service failure points and deductions should be calculated, leaving no room for the exercise of any discretion.  Once the service failure points and deductions had been calculated under the contract (whether rightly or wrongly) the Trust’s discretion came down to a decision whether to exercise its rights to the fullest degree or not.  Accordingly, there could be no implied term requiring the Trust not to act in an arbitrary, irrational or capricious manner when assessing how it wanted to enforce the contract.  If the Trust deducted more than it was entitled to then it was in breach of the express provisions of the contract, not an implied term.

As regards the express obligation to “co-operate … in good faith”, Jackson LJ held that the obligation was not a general one which qualified or reinforced all of the obligations on the parties in all situations where they interacted but rather was specifically focused upon the two purposes stated in the second half of that sentence, namely the efficient transmission of information and instructions and to enable the Trust or any beneficiary to derive the full benefit of the contract. 

The question therefore was whether the Trust was in breach of that limited obligation of good faith by awarding excessive service failure points or making excessive deductions from monthly payments.  Jackson LJ found that the Trust was not in breach of the good faith obligation in making the deductions; it was in breach of other provisions of the contract but it was not acting dishonestly (just mistakenly) and the deductions were not relevant to the stated purposes in that they had nothing to do with the transmission of information or instructions between the parties.  Nor were they relevant to the Trust or any beneficiary deriving the full benefit of the contract.  Further, and for the same reasons, while awarding excessive failure points was again in breach of express terms of the contract it was not a breach of the good faith obligation (Mid Essex Hospital Services NHS Trust v Compass Group UK and Ireland Ltd (t/a Medirest) [2013] EWCA Civ 200 (15 March 2013) – to read the judgment, in full click here).

Department for Culture, Media and Sport publishes consultation on “Classifying and Measuring Creative Industries”.

The purpose of the consultation is, the DCMS says, to update the DCMS “Creative Industries Classification”.  The DCMS says that it has been working with partners (NESTA, Creative Skillset and Creative and Cultural Skills) to review and update the classification used in the DCMS Creative Industries Economic Estimates (CIEE). 

The DCMS intends to use this review as an objective starting point to suggest which occupations and industries should be included in the updated DCMS classification.

The review uses the idea of “creative intensity” (the proportion of people doing creative jobs within each industry) to suggest which industries should be included.  If the proportion of people doing creative jobs in a particular industry is substantial, above a 30% threshold, the industries will be candidates for inclusion within the Creative Industries Classification.

The “creative intensity” approach focuses on industries where the creative activity happens.  The intention is, the DCMS says, “to produce a classification, which provides direct estimates of employment and the contribution to the economy, with no double counting, rather than attempting to capture all activity further down the value chain, for example, retail activities”.  The DCMS says that the classification generated in this way can be used as a starting point for indirect estimates that include wider economic effects along the supply chain.  For a link to the consultation documentation, click here.

Technology

Supreme Court makes reference to Court of Justice of European Union on whether browsing material on internet is infringement of copyright.

The appeal was made by Public Relations Consultants Association Ltd, a professional association of PR professionals, in response to the Court of Appeal’s decision that end users of an online commercial media monitoring service (provided by a company called Meltwater Holding BV), which monitors a wide range of websites including those of newspaper publishers and provides reports by email or online, need a licence from the Newspaper Licensing Agency to receive the service.  The PRCA appealed to the Supreme Court because the decision appeared to mean that simple internet browsing would constitute an infringement of copyright as every time a user accesses a website, a copy of the page is made on the user’s computer.

The Supreme Court noted that if a customer downloads a report containing copyright material posted by Meltwater on the internet he would be making a copy that would infringe the owner’s copyright unless he was licensed to do so.  The question here, however, was whether there was any infringement of copyright by simply viewing material on the website. 

Where a website is viewed by an end-user on his/her computer, without being downloaded, the technical processes involved require temporary copies to be made on screen and in the internet cache on the hard disk.  The function of the internet cache is a universal feature of current internet browsing technology without which the internet would not function properly.

Article 5.1 of the Copyright Directive (2001/29/EC) creates an exception for temporary copies that applies only to the reproduction right defined by Article 2.  Article 5.1 states: “Temporary acts of reproduction referred to in Article 2, which are transient or incidental [and] an integral and essential part of a technological process and whose sole purpose is to enable: (a) a transmission in a network between third parties by an intermediary, or (b) a lawful use  of a work or other subject-matter to be made, and which have no independent economic significance, shall be exempted from the reproduction right provided for in Article 2”.  The Supreme Court noted also that the Directive’s Recitals clearly stated that the exception should “include acts which enable browsing as well as acts of caching to take place”.

Analysing recent CJEU case law, including the Infopaq and Premier League cases, the Supreme Court said that the exception in Article 5.1 applies to copies made as an integral and necessary part of a technological process, in particular the digital processing of data.  For this purpose, the making of copies is a necessary part of the process if it enables it to function correctly and efficiently.  However, these copies must be temporary.  Further, the exception applies to copies made for the sole purpose of enabling other uses, including internet browsing.  The use must be lawful, but it would not be regarded as unlawful by reason only of the fact that it lacked authorisation of the copyright owner.  Finally, the making of the temporary copy must have no independent economic significance.

In the view of the Supreme Court, Article 5.1 applied to internet browsing, particularly because the copies made on screen and in the internet cache are temporary.  In other words, it could not be said that internet browsing constituted infringement.  “… if it is an infringement merely to view copyright material, without downloading or printing out, then those who browse the internet are likely unintentionally to incur civil liability, at least in principle, by merely coming upon a web-page containing copyright material in the course of browsing.  This seems an unacceptable result, which would make infringers of many millions of ordinary users of the internet across the EU…”, the court said.

Nevertheless, the court referred the question to the CJEU because the issue has a “transnational dimension” and the application of copyright law to internet use has important implications for millions of people.  (Public Relations Consultants Association Ltd v Newspaper Licensing Agency Ltd [2013] UKSC 18 (17 April 2013) – to read the judgment in full, click here).

Coalition for a Digital Economy (COADEC) calls on technology businesses to sign letter to European Commissioner Neelie Kroes urging support for net neutrality.

COADEC explains that the concept of net neutrality refers to the way in which ISPs may influence the traffic that flows through their services.  Operators can “shape” the extent of internet traffic, giving priority to one website over another, e.g. prioritising higher download speeds and/or providing higher quality to certain data packets.

At present there is no formal EU regulation governing whether ISPs must operate in accordance with net neutrality.  In the UK there is an “Open Internet Code of Practice”, which is a voluntary agreement between access operators.  Ten ISPs have signed the agreement, promising open and full access to the internet and clear marketing on subscription packages that includes full internet access.  However, COADEC says, it is not a long-term binding solution.

COADEC is concerned that Commissioner Kroes might be of the view that ISPs should be allowed to limit access and shape content.  According to COADEC, Ms Kroes “stated that this would be justified if consumer demand supported limited internet packages, which would differentiate on price and introduce cheaper options for the public”.

In COADEC’s view, “businesses should strongly oppose the notion of commercial discrimination over what sites are accessible to users”, as it would “inevitably damage start-ups, whether large or small, who must be allowed to operate on an equal footing in an open and neutral internet”.

COADEC is therefore sending a letter to Commissioner Kroes outlining the benefits of net neutrality and its importance to start-ups and is calling on digital businesses to sign up to it.  “With the signatures of CEOs from across the European digital community, we aim to demonstrate the technology industry’s considerable concerns at a potential policy outcome that could compromise the innovation and growth of the European digital economy”, it says.  To read COADEC’s press release in full and for more information on the letter, click here.

Intellectual Property Office announces consultation on bringing in new “superfast” patent processing service capable of granting patents in 90 days.

The Government has published a consultation on how the new service should work.  Currently it can take a number of years to gain patent protection.  This length of time is usually suitable for most patent applicants as it gives applicants time to make important commercial decisions and change their strategy in light of any decisions.  However the Intellectual Property Office recognises that this timescale may not suit everyone’s needs.

The consultation seeks views on:

  • the principles on which such a service could be based;
  • the conditions that would apply in order to use the superfast service;
  • the details of how such a service should work in practice, including fees; and
  • the usefulness of existing patent acceleration services.

The IPO already offers free acceleration services, which mean a patent can be granted in less than a year.  Whilst granting a patent in less than a year is very quick by international patent processing standards, the IPO recognises that sometimes there are circumstances where the applicant would find it useful to obtain a grant even more quickly. The consultation will run for 8 weeks and concludes on 12 June 2013.  To read the Government’s press release in full and for a link to the consultation documentation, click here.

Ofcom consults on proposals to simplify non-geographical telephone numbers.

Ofcom has announced its intention to implement major changes to how telephone numbers are charged, which, it says, will make the cost of calling businesses and services clearer for consumers.

The central measure is designed to tackle consumer confusion about how much it costs to call companies, public bodies and other organisations on numbers starting 08, 09 and 118.  Services provided on these non-geographic numbers include information, banking, directory enquiry and entertainment services.

Currently, unless using a BT landline, callers to these numbers cannot easily tell how much they will be charged.  Under rules which Ofcom has confirmed it expects to introduce, consumers will pay a single “access charge” to their phone company for all calls to these numbers, plus a “service charge” to the company or organisation they are calling.

Phone companies will inform their customers of their access charge when they sign up to a new service and it will appear on bills, while service providers will specify the charge for their service wherever they advertise or communicate it.  Consumers will therefore be able to understand the exact cost of making the call by adding the access and service charges together.

Ofcom also intends that calls to 080 (Freephone) numbers will be made free from all telephones.  At present some phone companies, particularly mobile providers, charge for calls to such numbers.

Ofcom has also published the draft legal instruments that are required to implement the changes.  In addition, there are some aspects of Ofcom’s evidence and analysis which stakeholders have not previously had the opportunity to comment upon and which are being presented for stakeholder review.  Ofcom is consulting on these remaining points and proposed legal instruments and expects to publish a statement confirming final decisions by the summer.  This will include confirmation of the date on which changes will be introduced.

The changes will affect all telecommunications operators and most businesses and consumers across the country.  Ofcom says that they represent “a fundamental restructuring of call charging” which will require reasonable time for operators to implement.  For that reason, Ofcom will be allowing 18 months from the conclusion of the review to the introduction of the changes.

The consultation closes on 28 May 2013.  For a link to the consultation documentation, click here.

Litigation

Law Commission publishes consultation on groundless threats.

The Law Commission says that “there are problems with the current law” as regards groundless threats in patent, trade mark and design right litigation, i.e. where a threat is made without a genuine intention to litigate, where there has been no infringement or where the right is invalid and the threat is said to be groundless (or unjustified).

Currently, the provisions do not distinguish well between the trade source of the infringement and others with a lesser connection, such as customers.  The Commission says that groundless threats of actions can also be used tactically to drive a wedge between legal advisers and their clients or to drive cases to court rather than encourage negotiations over settlement.

The Law Commission is consulting on two approaches to reform.  The first is to build on the reforms made to patent law in 2004 and to extend these to the other rights.  The Commission is also proposing that legal advisers should be protected from liability for groundless threats.

The second approach is to treat groundless threats as a form of unfair competition and to introduce a new and broader cause of action based on the Paris Convention.  For a link to the consultation documentation and for details as to how to respond, click here.

Music

European General Court partially annuls Commission decision finding anti-competitive conduct on part of copyright collecting societies.

The International Confederation of Societies of Authors and Composers (CISAC) is a non-profit non-governmental organisation which represents, in over a hundred countries, collecting societies managing copyright relating to, inter alia, musical works.

In 1936, CISAC drew up a model contract for reciprocal representation agreements between its members.  The contract serves as a non-binding model for reciprocal representation agreements concluded between its members for the purposes of conferring licences covering public performance rights of musical works.  Each collecting society agrees, reciprocally, to confer the rights over its repertoire to all of the other collecting societies for the purpose of their exploitation in the respective territories of those collecting societies.  Because of the network created by all of those reciprocal representation agreements, each collecting society can propose a worldwide portfolio of musical works to commercial users, but only for use in its own territory.

In 2000, RTL lodged a complaint with the Commission against a member of CISAC concerning its refusal to grant it a Community-wide licence for its music broadcasting activities.  In 2003, Music Choice Europe, which provides radio and television broadcasting services on the internet, lodged a second complaint against CISAC concerning its model contract.

By its decision of 16 July 2008, the Commission prohibited 24 European collecting societies from restricting competition, in particular by limiting their ability to offer their services to authors and commercial users outside their domestic territory.  The Commission decision, which concerned solely the exploitation of copyright via the internet, satellite and cable retransmission, did not call into question the very existence of reciprocal representation agreements.  It did, however, prohibit:

  • membership clauses: clauses in the model contract which restrict authors’ ability to affiliate freely to the collecting society of their choice;
  • exclusivity clauses: clauses in the model contract which have the effect of providing all collecting societies in the territory in which they are established with absolute territorial protection vis-à-vis other collecting societies as regards the grant of licences to commercial users; and
  • a concerted practice: this was found to exist between the collecting societies. Each collecting society limited, in the reciprocal representation agreements, the right to grant licences relating to its repertoire in the territory of another collecting society party to the agreement.

The Commission did not impose fines on the collecting societies but did require that they remove the clauses in question from the model contract and bring an end to the concerted practice.

Most of the collecting societies concerned and CISAC brought an action before the General Court of the European Union against the Commission’s decision.

The General Court has annulled, for CISAC and for 20 of the collecting societies concerned, the Commission’s decision in respect of the finding of a concerted practice.  The General Court considered that the Commission had not provided sufficient evidence.  The Commission did not have documents proving the existence of a concerted practice between the collecting societies as regards the territorial scope of the mandates that they granted each other, the court said.  Further, there was no basis to render implausible the applicants’ explanation that the parallel conduct of the collecting societies at issue was not the result of a concerted practice, but rather of the need to fight effectively against the unauthorised use of musical works.

The General Court rejected the applications in so far as they sought the annulment of the Commission decision as regarded membership and exclusivity clauses.  (Case T-392/08 AEPI v Commission (unreported) – to read the judgment in full, go to the curia search form, type in the case number and follow the link).

Intellectual Property Office publishes response to consultation on implementation of Directive extending term of copyright in sound recordings, performers’ rights in sound recordings and certain co-written works.

The IPO ran a public consultation during the period 7 January 2013 to 4 March 2013 on the Government`s proposed approach to implementation of EU Directive 2011/77/EU extending the term of copyright in sound recordings, performers’ rights in sound recordings and certain co-written works. 

The consultation sought views on transposition of the Directive.  The IPO received 14 responses from the recorded music industry and their representatives, collecting societies, performers and their representatives and from other interested parties.  Given that the Directive affects only a small, specific area of copyright law, the IPO says that it deems the number of overall responses “satisfactory for a consultation of this scope”.  Responses were received from stakeholders representing a substantial proportion of those affected by the provisions of the Directive.  With negotiations already completed and the Directive agreed, only comments addressing UK transposition and the UK impact assessment were invited.

The responses received demonstrated general support for the Government`s approach to implementation of the Directive.  In taking forward the implementing Regulations the Government will consider the responses to the specific questions asked by the consultation.

The consultation raised a number of issues that will influence the final implementation of the Directive; proposals for taking forward these issues in the implementing legislation will require ministerial clearance.  It is the Government’s intention to lay The Copyright and Duration of Rights in Performances Regulations before Parliament on or before 18 July 2013 and enter into force on 1 November 2013 (the transposition deadline for the Directive, in line with the Coalition Government policy).  The IPO says that guidance on the Regulations will be available ahead of transposition.  For a link to the consultation responses, click here.

PRS for Music agrees new licensing deal with commercial radio.

The deal was agreed with RadioCentre, the industry body for commercial radio, and will apply to more than 300 licensed commercial radio stations in the UK.  It will run for a minimum of 5 years and replaces the previous agreement, which has been in place since 1993.

Under the new licence stations will continue to pay a percentage of net revenue and an annual lump sum payment and rights will be granted for radio broadcast, simulcast and catch-up listening.

PRS for Music Chief Executive Robert Ashcroft said: “Radio is a core part of our licensing operation.  The changing listener environment, digital music delivery and the growth of radio’s music services mean it’s very important that we continue to have appropriate licensing arrangements for our radio partners.  Therefore we are very pleased to have concluded a modernised contract with commercial radio, on behalf of all our members”.  To read PRS for Music’s press release in full, click here.

Publishing

High Court awards £100,000 damages for defamation and aggravated damages of £20,000 for online publication to compensate for distress and harassment.

The claimant’s wife was a beneficiary under substantial family trusts.  The defendants were her sister, also a beneficiary of the trusts, and her sister’s husband.  On 25 February 2011 the claimant applied, without notice, for an interim injunction to restrain the further publication of amongst other things allegations of financial impropriety.  The application followed a number of telephone calls and a letter from an individual, “X”, and various communications by another individual, “Y”.  On the claimant’s evidence, whoever X and Y were, these communications were made for and on behalf of the defendants.  They were also seriously defamatory and it appeared to be a case of blackmail.  An email from Y, for example, suggested that the claimant had misappropriated money from the trusts. 

Tugendhat J granted the injunction and ordered that all parties should be anonymised.  Further, on 3 March 2011, he continued both the injunction and the anonymity order.  However, the second defendant then published further allegations of serious financial and sexual misconduct on the internet in breach of the injunction.  The judge estimated that the number of people who might have read the online allegations was “probably in the hundreds and at most low thousands”.

In assessing damages, Mr Justice Tugendhat said that the least sum necessary to compensate the claimant for the injury to his reputation and to mark the seriousness of the slanders and libels was an award of £100,000.  In addition, he said, the aggravating factors were “particularly grave”.  In order to compensate the claimant for the distress and harassment he had suffered as a result of the aggravating factors of blackmail and publication online after the injunction had been granted, the least sum necessary to compensate him was a further £20,000.  (ZAM v CFW [2013] EWHC 662 (QB) (26 March 2013) – to read the judgment in full, click here).

Government refines proposals for incentives as part of new system of independent self-regulation of press.

The Government’s recent proposals for press regulation, set out in its Royal Charter, have been refined to make sure that “micro-business” blogs are outside of the scheme.  The Government says that, following the initial debate in Parliament, it has refined the clauses “to make it absolutely clear that small blogs are outside of the scheme”.

The amendments, which have cross-party agreement, make clear that small blogs will not be classed as “relevant publishers”. 

Publications classed as a “relevant publisher” will be subject to incentives to join a press self-regulator.  The incentives relate to exemplary damages and the awarding of costs in civil legal cases.

The provisions in the Crime and Courts Bill clauses detail the four tests that must be met to be considered a “relevant publisher”, which are:

  • it publishes “news-related” material;
  • it publishes in the course of a business;
  • publications are written by different authors; and
  • publications are subject to editorial controls.

The amendments clarify the Government’s position on small blogs by further defining the exemption for blogs that are classed as “micro-businesses”, i.e. businesses with fewer than ten employees and an annual turnover below £2 million.  This is the definition used by the Department for Business, Innovation and Skills.

Despite not falling under the definition of “relevant publisher”, any publication that is exempt as a micro-business as a result of these amendments could still choose to join a regulator and receive the legal benefits otherwise only available to relevant publishers in the regulator, i.e protection from exemplary damages, and use of the arbitral arm in the regulator being taken into account by the court when awarding costs.

The amendments also list certain categories of publications that are exempt, even when the four tests are met.  These exemptions include special interest titles, scientific or academic journals, broadcasters and book publishers as well as a public body, charity or company that publishes news about their activities.  To read the Department for Culture, Media and Sport’s press release in full, click here.

Computer Games

European Commission opens in-depth investigation into proposed UK video games tax relief.

The objective of the proposed video games tax relief is, in the Commission’s view, “to provide an incentive to video games developers to produce games meeting certain cultural criteria”.  However, the Commission considers that there is no obvious market failure in this dynamic and growing sector and that such games are produced even without state aid.  Consequently, at this stage, the Commission doubts that the aid is necessary and says that the opening of an in-depth investigation “does not prejudge its outcome”.  It gives the UK and other interested parties the opportunity to comment.

The UK intends to introduce a 25% tax relief on a maximum of 80% of the production budget of a qualifying video game for expenditure on goods and services used or consumed in the UK.  However, based on the information available at this stage, the Commission doubts whether:

  • aid is necessary to stimulate the production of such video games;
  • limiting expenditure for the tax relief to goods or services “used or consumed” in the UK would not be discriminatory;
  • offering this type of aid would not fuel a subsidy race between Member States; and
  • the proposed cultural test ensures that the aid supports only games with cultural content without leading to undue distortions of competition.

Interested parties are invited to comment by 15 May 2013.  To read the Commission’s press release in full, click here.

Office of Fair Trading investigates free children’s web and app-based games.

The OFT has launched an investigation into whether children are being unfairly pressured or encouraged to pay for additional content in “free” web and app-based games, including upgraded membership or virtual currency such as coins, gems or fruit. Typically, players can access only portions of these games for free, with new levels or features, such as faster game play, costing money.

As part of the investigation, the OFT has written to companies offering free web or app-based games seeking information on in-game marketing to children.  The OFT is also asking for parents and consumer groups to contact it with information about potentially misleading or commercially aggressive practices they are aware of in relation to these games.

The OFT investigation is exploring whether these games are misleading, commercially aggressive or otherwise unfair.  In particular, the OFT is looking into whether these games include “direct exhortations” to children: i.e. a strong encouragement to make a purchase, or to do something that will necessitate making a purchase, or to persuade their parents or other adults to make a purchase for them.  This is unlawful under the Consumer Protection (from Unfair Trading) Regulations 2008.

As part of the investigation, the OFT will also consider whether the full cost of some of these games is made clear when they are downloaded or accessed, potentially leading to children and parents to make decisions they may not have made if prices were more transparently advertised at the start of the purchasing process.

‘The OFT says that it is not seeking to ban in-game purchases, but the games industry must ensure it is complying with the relevant regulations so that children are protected.  It says it is speaking to the industry and will take enforcement action if necessary.’

As part of its investigation, the OFT is asking for information from key players in the sector, including games developers and games hosting services, as well as consumer and parenting groups.  The information will be used to understand business practices used in this sector, to establish whether consumer protection regulations are being breached and if so what the consumer harm is.  The OFT expects to publish its next steps by October 2013.  Click here for information on how to contact the OFT and make comments.

Advertising

High Court says Transport for London’s decision not to allow advertisement reading “NOT GAY! EX-GAY, POST-GAY AND PROUD. GET OVER IT!” to be displayed on side of buses was not infringement of Article 10 rights.

The claim for judicial review of Transport for London’s decision was brought by Core Issues Trust, a registered charity whose objects are “the advancement of religion” and “the promotion of the Holy Scriptures”.  A particular object of the Trust was “to uphold the view that any sexual relationship outside marriage is inconsistent with the Biblical view of ‘one flesh’ relationships (Genesis 2.24), and the Divine pattern for family life, premised on marriage between one man and one woman”.

The advertisement that the Trust wished to display on the sides of London buses stated “NOT GAY!  EX-GAY, POST-GAY AND PROUD.  GET OVER IT!” and was intended to be a response to an ad by the campaign group, Stonewall, which had earlier appeared on the outside of TfL’s buses stating, “SOME PEOPLE ARE GAY.  GET OVER IT!” 

The court found that, although TfL’s decision-making process had been procedurally unfair, in breach of its own procedures, and had demonstrated a failure to consider the relevant issues, these factors were outweighed by countervailing factors against allowing the advertisement to run.

Essentially, the Trust’s right to freedom of expression under Article 10 was, in the court’s view, legitimately subject to the restrictions imposed by TfL since they were prescribed by law and necessary in a democratic society.  The fact that the ad was destined for London buses, which meant that Londoners and people visiting London who might be offended could not avoid it, and the fact that a far larger number of people were likely to be offended by it (or even be put at risk by it given that, as the judge said, “homophobia places gays at risk”) than that which would have supported it, led the court to the decision that TfL’s decision had been the correct one in law.  (Core Issues Trust v Transport for London [2013] EWHC 651 (Admin) (22 March 2013) – to read the judgment in full, click here.)

ASA censures online dating site’s ad on Facebook for encouraging “grooming”.

An ad that appeared on Facebook was headed, “Older Men Wanted”.  Text below read, “datematures.com.  Browse local singles who are looking to date Older Men Only at Date Matures!” Next to this text was a picture of a young woman wearing what appeared to be a school uniform: her head and upper torso in frame; what was visible of her shirt was unbuttoned and the tie was hanging loosely around her neck.

The complainant, who believed the intention of the ad was to portray the model as a school aged child, challenged whether the ad was offensive, harmful and irresponsible.

In the context of the other claims in the ad, “Older Men Wanted”, “datemature.com” and “Browse local singles who are looking to date Older Men Only at Date Matures!”, and the fact that the ad appeared on a social networking site, the ASA considered that the image of the young woman was irresponsible because it could be understood as an allusion to, and encouragement of, the so-called “grooming” of young children.  For these same reasons the ASA considered that the ad was likely to cause serious and widespread offence.

Under CAP Code rule 5.1, ads featuring children “must contain nothing that is likely to result in their physical, mental or moral harm” and under rule 5.1.1, “children must not be encouraged to enter strange places or talk to strangers”.  Although the ad appeared to be targeting “older men”, the ASA considered the implication that young children could also join the dating service, in order to meet older men, was a breach of these CAP Code rules.  The ad also breached rules 1.3 (Social responsibility) and 4.1 (Harm and offence).  Facebook said the ad was in violation of their Advertising Guidelines and had been disabled, as had any other ads using the same image.  They had also issued the advertiser with a warning.  To read ASA Adjudication on Mate1.com Inc (17 April 2013) click here.

 

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