HomeInsightsNeed to Know – 2013.04.29

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General

Nesta publishes The Creative Manifesto, a ten-point plan to bolster the creative economy.

European Commission consults on Preparing for a Fully Converged Audiovisual World: Growth, Creation and Values.

Council of European Union adopts Directive on Alternative Dispute Resolution (ADR) and Regulation on Online Dispute Resolution (ODR).

Enterprise and Regulatory Reform Bill receives Royal Assent.

Technology

Government survey shows that 87% of small businesses across all sectors experienced cyber attacks in the last year.

PhonepayPlus publishes consultation on Information Connection and Signposting Services.

Broadcasting

Department for Culture, Media and Sport publishes consultation on proposed changes to legal obligations of Ofcom.

ITV summoned to meeting with Ofcom following latest promotion/undue prominence breach of Broadcasting Code.

Ofcom finds no expectation of privacy in relation to “similar” mobile phone number featured in Eastenders that resulted in viewer receiving unwanted calls.

Publishing

European Commission consults on commitments offered by Penguin in relation to sale of e-books in European Economic Area.

Newspaper industry rejects Government’s proposals for press regulation and publishes its proposals for an alternative Royal Charter.

Press Complaints Commission upholds complaint against The Scottish Sun following complaint from Sir Chris Hoy’s family.

Defamation Bill 2013 to receive Royal Assent.

Crime and Courts Bill to receive Royal Assent.

Film & TV

Texas Chainsaw 3D film campaign breaches advertising rules relating to harm and offence, children and appropriate scheduling.

Gambling & Betting

William Hill ad that implied whole-market comparison with regard to best price claim when only seven bookmakers had been counted breaches rules on misleading advertising, substantiation and comparisons with identifiable competitors.

Gambling Commission publishes advice for society lotteries, local authority lotteries and external lottery managers on requirements relating to distribution of lottery proceeds.

Gambling Commission publishes document summarising its existing approach to supervision of remote and non-remote casinos under Money Laundering Regulations 2007.

Computer Games

Department for Culture, Media and Sport publishes revised draft legislation on cultural tests for creative sector tax reliefs.

Advertising

European Court of Human Rights says ban on paid political advertising in UK is justified.

General

Nesta publishes The Creative Manifesto, a ten-point plan to bolster the creative economy.

Nesta, the independent charity that works to increase the innovation capacity of the UK, has published the Manifesto in order “to identify what policymakers, educators, businesses and regulators need to do to ensure that the UK’s creative economy thrives in the coming decade”.  The Manifesto was co-authored by Professor Ian Hargreaves, Hasan Bakhshi and Juan Mateos-Garcia.

The ten proposals are:

  1. the Government should adopt Nesta’s proposals for new definitions of the creative industries and the wider creative economy.  “These are simple, robust and recognise the central role of digital technologies”, Nesta claims;
  2. policymakers should establish a “creative innovation system” framework within which strategic priorities can be addressed in a coherent and effective manner;
  3. the Government should make R&D tax relief more accessible to creative businesses and Technology Strategy Board programmes should be further broadened to address the needs of the creative economy; 
  4. local policymakers should observe Nesta’s seven–point guide for developing “creative clusters”;
  5. the Government should ensure that its generic business finance schemes do not discriminate against creative businesses, and that Regulations help the development of financial Internet platforms (such as crowdfunding sites);
  6. the Treasury and the DCMS should undertake a broad–based assessment of the value of public arts and cultural spending in the UK, drawing upon similar work on the natural environment and the cultural value project of the Arts and Humanities Research Council.  Funding decisions should be justified in the light of criteria that emerge from this work;
  7. funders should incentivise experimentation with digital technologies by arts and cultural organisations and allocate a sustained percentage of their resources to digital R&D, ensuring that the evidence arising from this work is openly shared;
  8. Ofcom should be given powers to gather information in all internet markets in order to maximise the chances of sound and timely judgments about the emergence of potentially abusive market power and other market concerns (an “early warning system”).  Ofcom’s remit should also be broadened to advise the Government on the actions needed to ensure the UK enjoys “a flourishing, open internet, balancing the interests of consumers and citizens and committed to supporting innovation and growth”.  These changes should be a central feature in any communications Bill planned for 2013/14;
  9. UK copyright rules and exceptions should be re–balanced along the lines proposed by the UK Government, and also at European level as part of the drive for a European digital single Market.  A new mechanism for enabling vastly increased and more efficient rights licensing transactions (through the proposed copyright Hub) should be further developed during 2013; and
  10. the school curriculum should bring together art, design, technology and computer science so that young people can enjoy greater opportunities to work creatively with technologies, both in and out of school.  Steps should also be taken to address the disparity between what UK creative businesses need from graduates and what universities are teaching them. 

For a link to the Manifesto, click here.

European Commission consults on Preparing for a Fully Converged Audiovisual World: Growth, Creation and Values.

The Commission says that millions of Europeans now catch up with their favourite TV series on a smartphone, watch online content on their living room TV and put their own user-generated content online.  Further, the number of “connected TVs” in Europe is growing.  These changes are sweeping away traditional boundaries between consumers, broadcast media and the internet, the Commission says.  Accordingly, it has adopted a Green Paper inviting stakeholders and the wider public to share views on what this convergence of technology and content could mean for Europe’s economic growth and innovation, cultural diversity, and consumers (especially those that may need protection, such as children).

The issues covered by the Green Paper include:

  • The rules of the game – fostering the right conditions for dynamic EU businesses to deal with international competition (especially the US), given that competing players may be subject to different rules.
  • Protecting European valuesprotecting media freedom and user interests (e.g. protecting children and ensuring accessibility for users with disabilities).  Do people expect higher protection for TV programmes than for internet content and where is the line to be drawn?
  • Single market and standards – some devices do not work in the same way across Member States.  How can Europe promote the right technological environment?
  • Financing – how will convergence and changing consumer behaviour influence how films, TV shows and other content is financed?  How are different actors in the new value-chain contributing?
  • Openness and media pluralismshould pre-defined filtering mechanisms, for example in search engines, be subject to public intervention?  Are existing practices relating to premium content at wholesale level, such as major sport events and successful recently released films, affecting market access and sustainable business operations?  Are platforms sufficiently open?

The Commission says that the Green Paper does not presuppose any action, but in following up the Commission might explore regulatory and policy responses, including self-regulation.

European Commissioner Neelie Kroes said: Connected TV is the next big thing in the creative and digital worlds.  Convergence between sectors means people can enjoy a wider choice of great content – but it also creates disruptions and challenges.  We need a converged and EU-wide debate to help deal with these changes.  To help business flourish, nurture creativity and protect our values.

The consultation is open until the end of August 2013.  To read the Commission’s press release in full and for a link to the Green Paper, click here.

Council of European Union adopts Directive on Alternative Dispute Resolution (ADR) and Regulation on Online Dispute Resolution (ODR).

The Council says that the new system, which is part of the “Single Market Act” package, will provide for “simple, fast and low-cost out-of-court settlement procedures designed to resolve disputes between consumers and traders arising from the sales of goods and services”.  Further, it establishes a common framework for ADR in EU Member States by setting out common minimum quality principles in order to ensure that all ADR entities are impartial, transparent and efficient.  However, existing national ADR schemes should be able to continue to operate within the new framework, the Council says.

The ADR system will be supplemented by an ODR mechanism, which will provide a European online dispute resolution platform.  This will be an interactive website that will be free of charge in all languages of the EU.

The aim is that the results of any ADR proceedings will be available within a period of three months from the date of receipt of the complaint file.

The new Directive will apply to domestic and cross-border disputes submitted by consumers against traders in almost all areas of commercial activity across the EU, including online transactions.

Member states will have two years to incorporate the new provisions into their national legislation.  To read the Council’s press release in full and for links to the new legislation, click here.

Enterprise and Regulatory Reform Bill receives Royal Assent.

The Government says that the Act aims to support long-term growth through a range of measures including:

  • making sure there is a link between directors’ pay and long-term company performance by giving shareholders of UK quoted companies binding votes on directors’ pay.  Shareholders will now have the power to hold companies to account and companies will need to listen to what they say;
  • establishing a new Competition and Markets Authority, bringing together the competition functions of the Office of Fair Trading and the Competition Commission.  This will be the UK’s lead competition authority with wide ranging powers to tackle anti-competitive behaviour;
  • modernising the UK’s copyright regime to promote innovation in the design industry, encouraging investment in new products while strengthening copyright protections.  Creating a level playing field for collecting societies and the thousands of small businesses and organisations who deal with them by strengthening the existing regulatory regime.  Orphan works will be licensed for use and there will be a system for extended collective licensing of copyright works;
  • creating a power to give consumers the right to view and download the data that businesses hold on them in an electronic format;
  • simplifying regulation through reduced inspection burdens; repealing unnecessary laws and time-limiting new laws so that there are only ever relevant and necessary laws in place, and extending the Primary Authority Scheme to provide consistent regulatory advice to thousands more small firms.

The Act also contains provisions on the amendment of Royal Charters in an attempt to minimise political interference in new proposals for self-regulation of the press:

“Where a body is established by Royal Charter after 1 March 2013 with functions relating to the carrying on of an industry, no recommendation may be made to Her Majesty in Council to amend the body’s Charter or dissolve the body unless any requirements included in the Charter on the date it is granted for Parliament to approve the amendment or dissolution have been met”.

In other words, any relevant Royal Charter approved after 1 March 2013 cannot be amended unless Parliament has approved any changes.  In the case of the Royal Charter on press self-regulation, this requires a majority of two-thirds of those who vote in each of both Houses.  To read the Government’s press release in full, click here.

Technology

Government survey shows that 87% of small businesses across all sectors experienced cyber attacks in the last year.

The survey, 2013 Information Security Breaches Survey, shows that the number of small businesses that have experienced loss of confidential information through cyber attacks is up by more than 10% from a year ago.  Further, it shows that it costs small businesses up to 6% of their turnover even though, according to the Government, they could protect themselves for far less.

The Technology Strategy Board has now extended its Innovation Vouchers scheme to allow small and medium enterprises to bid for up to £5,000 from a £500,000 pot to improve their cyber security by bringing in outside expertise.  The Department for Business Innovation and Skills is also publishing guidance to help small businesses put cyber security higher up the agenda and make it part of their normal business risk management procedures.

The survey also showed that:

  • large organisations are also still at high risk with 93% reporting breaches in the past year;
  • the average cost of the worst security breach for small organisations was £35,000 to £65,000 and for large organisations was between £450,000 and £850,000. 
  • the median number of breaches suffered was 113 for a large organisation (up from 71 a year ago) and 17 for a small business (up from 11 a year ago), meaning that affected companies experienced roughly 50% more breaches than on average a year ago;
  • several individual breaches cost more than £1 million;
  • 78% of large organisations were attacked by an unauthorised outsider (up from 73% a year ago) and 63% of small businesses (up from 41% a year ago);
  • 81% of respondents reported that their senior management place a high or very high priority on security.  However, many businesses leaders have not been able to translate expenditure into effective security defences;
  • 84% of large businesses report staff-related cyber breaches (the highest figure ever recorded) and 57% of small businesses (up from 48% a year ago); and
  • 12% of the worst security breaches were partly caused by senior management giving insufficient priority to security.

To read the BIS press release in full and for a link to further information on the TSB’s Innovation Vouchers scheme, click here.

PhonepayPlus publishes consultation on Information Connection and Signposting Services.

PhonepayPlus has published a further public consultation on a proposed prior permission regime for Information, Connection and/or Signposting Services (ICSS).  An initial consultation on ICSS closed on 27 September 2012. 

ICSS are premium rate services that are usually promoted prominently on search engines or sometimes on classified ads websites and can be defined as follows:

Premium rate services, excluding full national directory enquiry services, that provide connection to specific organisations, businesses and/or services located or provided in the UK; and/or which provide information, advice, and/or assistance relating to such specific organisations, businesses and/or services”.

The initial consultation was prompted by a significant number of complaints about these services, including from public service and commercial organisations.

On the basis of responses to the initial consultation, including responses from ICSS providers, PhonepayPlus says that it considered it necessary to commission independent research to gain further quantitative and qualitative evidence relating to the user and public perception of ICSS and to understand the consumer experience of these services.  PhonepayPlus has reviewed and considered this evidence in relation to the proposed regulation of ICSS and is issuing this consultation following that review.

In the new consultation, PhonepayPlus proposes a prior permissions regime to ensure that such services can only operate if PhonepayPlus is satisfied that they meet the conditions and enhanced obligations specified in the prior permissions regime.

PhonepayPlus says it is particularly eager to receive feedback to the proposals from providers of ICSS, those businesses and organisations that ICSS associate themselves with, and consumer groups.  The 6-week consultation closes on 5 June 2013.  For a link to the consultation documentation, click here.

Broadcasting

Department for Culture, Media and Sport publishes consultation on proposed changes to legal obligations of Ofcom.

The consultation proposes making seven changes to Ofcom’s statutory duties and functions that will “save money and increase efficiency for both the regulator and industry”, the Government says,.

The proposed changes include:

  • removing an obligation on Ofcom to review the Public Service Broadcasting landscape every five years and instead allow the Culture Secretary to request a review when it is needed; and
  • allowing Ofcom to assess how the various Channel 3 licensees may work together when necessary, rather than annually.  The regulator would no longer have to review a change of control of a Channel 3 or 5 licence and instead do it only if warranted.

The Government says that it “is committed to removing unnecessary burdens on business”.  Broadcasters will no longer have to produce annual statements of programme policy under these proposals.  The Government says that “These statements are weak regulatory levers, and the relevant information is collected through other means”.

The consultation also suggests Ofcom should have more flexibility to change its governance structures, enabling it to adapt as circumstances change, with the Secretary of State’s approval, and be as efficient as possible.

Further, under the proposals, the regulator would no longer have a duty to promote training and equality.  This work is done by other bodies and no other sectoral regulator is required to do this.

Finally, the proposed changes would allow Ofcom to charge for filing applications for satellite orbits with the International Telecommunications Union.  This would bring Ofcom into line with regulators in other countries, ending the unintended taxpayer subsidy for companies based anywhere in the world that choose to make applications through Ofcom. 

The consultation closes on 25 June 2013.  To read the DCMS press release in full and for a link to the consultation documentation, click here.

ITV summoned to meeting with Ofcom following latest promotion/undue prominence breach of Broadcasting Code.

During an episode of The Alan Titchmarsh Show, Patsy Kensit gave an interview, the first three minutes and seven seconds of which focused on her weight.  Patsy Kensit made several references to Weight Watchers including, “it’s an amazing diet” and “the weight comes off and it stays off”.

A viewer was concerned that during the interview Patsy Kensit endorsed Weight Watchers.

ITV said that the discussion was very much centred on the guest’s personal experience, and the expectations on celebrities to lose weight.  It also said that during the interview the presenter made a point of saying “we won’t talk about diet the whole time” when moving the interview on to other areas of Patsy Kensit’s life, such as her recent work and career.

Ofcom said that not only was the fact that Patsy Kensit is a Weight Watchers “Weight Loss Ambassador” not made clear in the interview, but the interview gave the impression that she was making a spontaneous reference to Weight Watchers.  Ofcom also noted that Alan Titchmarsh did not challenge Patsy Kensit’s claims about the efficacy of Weight Watchers or suggest alternative methods of losing weight. 

Ofcom considered that because most of the five minute interview focused on the guest’s weight history and new method of weight management and because the overall effect was to promote and endorse Weight Watchers as an effective method of weight loss, the references to Weight Watchers were promotional and unduly prominent, in breach of Rules 9.4 and 9.5 of the Code.

In the light of other recent breaches of this nature (Amanda Holden promoting a firm of solicitors on ITV’s This Morning and Dannii Minogue promoting A2 milk on ITV’s Lorraine) Ofcom is requesting that the broadcaster attends a meeting to discuss its compliance in this area.  To read Ofcom’s adjudication on The Alan Titchmarsh Show published in issue 228 of the Broadcast Bulletin (22 April 2013), click here.

Ofcom finds no expectation of privacy in relation to “similar” mobile phone number featured in Eastenders that resulted in viewer receiving unwanted calls.

During an episode of EastEnders, a close-up shot of a mobile telephone number belonging to a character in the programme was shown on screen for approximately two seconds.  The programme was subsequently repeated on a number of occasions. 

Miss Karen Richardson complained to Ofcom that it was her mobile telephone number that was shown and, as a result, that her privacy was unwarrantably infringed in the programme as broadcast.  She said that she had received a number of scary and intimidating calls and that she had been forced to change the number that she had had for over five years.

The BBC pointed out that the mobile number broadcast in the programme was similar, but not identical, to that belonging to Miss Richardson.  It said that the EastEnders production team customised the mobile handsets used in the programme so that numbers were not displayed along with messages.  It also said that where customisation was not possible a system was in place to ensure that only “cleared” numbers owned by the production team were used.

While noting the unfortunate experience of Miss Richardson in this case, Ofcom considered that the particular circumstances that gave rise to the calls she received could not reasonably have been foreseen by the broadcaster.  Given that the programme did not, in fact, disclose Miss Richardson’s mobile telephone number, Ofcom considered that she did not have a legitimate expectation of privacy in relation to the programme as broadcast and, as such, it was not necessary to consider whether any infringement into Miss Richardson’s privacy was warranted.  To read Ofcom’s adjudication on a Complaint by Miss Karen Richardson published in Issue 228 of the Broadcast Bulletin (22 April 2013), click here.

Publishing

European Commission consults on commitments offered by Penguin in relation to sale of e-books in European Economic Area.

The proposed commitments offered by Penguin aim to alleviate the Commission’s concerns that Penguin may have engaged in an anti-competitive concerted practice affecting the sale of e-books in the EEA.  They are substantially the same as those proposed by Simon & Schuster, Harper Collins, Hachette and Holtzbrinck and made legally binding by the Commission in December 2012.  If the market test confirms that Penguin’s commitments are suitable to address the Commission’s competition concerns, the Commission says that it may make them legally binding on Penguin.

The Commission considers at this stage that Penguin, together with the above four publishers and Apple, may have breached EU antitrust rules that prohibit cartels and restrictive practices by jointly switching the sale of e-books from a wholesale model to agency contracts containing the same key terms (in particular an unusual “Most Favoured Nation” clause for retail prices).  The agency model allows more control by publishers over retail prices.  The Commission has concerns that this switch may have been the result of collusion between competing publishers, with the help of Apple, and may have been aimed at raising retail prices of e-books in the EEA or preventing the emergence of lower prices.

In the proposed commitments, Penguin offers to terminate existing agency agreements and refrain from adopting price MFN clauses for five years.  In the event of Penguin entering into new agency agreements, retailers would be free to set the retail price of e-books during a two-year period, provided the aggregate value of price discounts granted by retailers does not exceed the total annual amount of the commissions that the retailer receives from the publisher.

Comments are invited up until 18 May 2013.  To read the Commission’s press release in full, click here.

Newspaper industry rejects Government’s proposals for press regulation and publishes its proposals for an alternative Royal Charter.

The Newspaper Society has released a statement saying that the Government’s scheme “has no support within the press.  A number of its recommendations are unworkable and it gives politicians an unacceptable degree of interference in the regulation of the press”. 

Under the industry proposal the new regulator would have the power to impose fines of up to £1 million for systematic wrongdoing.  The new regulator would also have “genuine independence from the industry and from politicians with all the bodies making up the new regulator having a majority of independent members appointed openly and transparently”.  However, the industry would have its own direct representative on the Recognition Panel and amendment to the industry Charter would not require Parliamentary approval but would be approved by unanimous resolutions by the Recognition Panel, the regulator and the newspaper trade associations.

The alternative proposals have the backing of the bulk of the industry, including all the big newspaper groups.  Given this cohesive response by the newspaper industry, it will be interesting to see how the Government responds, and how quickly, given that the Government was anticipating having the Charter agreed in the next Privy Council meeting on 15 May.  To read the Newspaper Society statement in full, click here.  If you would like any further information, please contact Caroline Kean or Amali de Silva.

Press Complaints Commission upholds complaint against The Scottish Sun following complaint from Sir Chris Hoy’s family.

The PCC upheld the complaint against The Scottish Sun after it decided to publish photographs of grieving family members at the funeral of Sir Chris Hoy’s uncle, despite mourners having made clear that the photographer’s presence was unwelcome.

The Hoy family said that publication of a photograph showing the deceased’s widow being comforted after the service was grossly intrusive in breach of Clause 5 (Intrusion into grief or shock) of the Editors’ Code of Practice.  The family was also concerned about references in the article to the eulogy, which demonstrated that a reporter had attended the service, and about the presence in the church grounds of a photographer during the service.

The newspaper apologised for the distress caused to the Hoy family, but said that the attendance of Sir Chris at the funeral had made it newsworthy.  It said that it had sent a freelance reporter and a photographer to cover the occasion respectfully, and at a distance.  It said the photographer had left the church grounds after he was approached by a mourner; the photographs in question had been taken from the street.  When later asked by another person who had attended the service to leave the family alone, he left the area.  The newspaper offered to write a letter of apology to the family and removed the photograph from the online article as a means of trying to resolve the complaint.

The PCC ruled that the two approaches made by mourners regarding the photographer’s presence were a clear indication that the family was unlikely to welcome the publication of the photographs.  In light of this, the decision by the newspaper to publish the image of Sir Chris’ aunt being comforted after the service “represented a clear failure to handle publication sensitively”, in breach of Clause 5 of the Code.  It said that the presence of a well-known individual at the funeral “did not in any way lessen the newspaper’s obligation under Clause 5”, and ruled that the newspaper ought to have recognised that the family’s wishes should be respected at such a difficult time.  To read PCC Adjudication on Mrs Rosemary MacLeod v The Scottish Sun (23 April 2013), click here.

Defamation Bill 2013 to receive Royal Assent.

The Defamation Bill completed its final stage of “ping-pong” in the House of Commons on 24 April 2013. 

The final round of amendments arose from the provisions inserted by the House of Lords In February 2013 restricting the ability of corporations to sue for libel.  This was rejected by the House of Commons, but the Government then introduced a compromise in the House of Lords on 24 April, which reads: “harm to the reputation of a body that trades for profit is not “serious harm” unless it has caused or is likely to cause the body serious financial loss”.

The Act will come into force on “such day as the Secretary of State may appoint”.  For more information on the provisions of the Act, click here.

Crime and Courts Bill to receive Royal Assent.

The Crime and Courts Bill bounced back to the House of Lords for consideration of Commons’ changes or “ping pong” on 23 April 2013.

Members of the Lords discussed concerns about the potential impact of the new system of press regulation on small-scale blogs.  They agreed to make changes to the definition of a “relevant publisher”, to make clear that “microbusiness” blogs and news aggregators are excluded from the incentive-based scheme, particularly in relation to exemplary damages and the awarding of costs in civil legal cases.

All Commons amendments were agreed to without a vote.  The Crime and Courts Bill is now awaiting royal assent.  For more information on the provisions of the Act, click here.

Film & TV

Texas Chainsaw 3D film campaign breaches advertising rules relating to harm and offence, children and appropriate scheduling.

Eleven TV ads, a radio ad, a poster and an internet display ad for the film Texas Chainsaw 3D showed scenes ranging from the merely distasteful to the implication of extreme violence.  By way of example, an “ex-kids” restriction ad featured a clip showing a man pulling a mask over his face, followed by on-screen text that stated “IT’S HAPPENING AGAIN”.  Footage showed a bloodied chainsaw being taken from a shelf, followed by a metal sliding door slamming shut.  Text on a bloodied background stated “TEXAS CHAINSAW 3D”.

An ad with a post-9pm restriction showed a man with a chainsaw walking through a field towards a building; a woman with her arms tied up above her, shown from behind, with a chainsaw being held against her shoulder; and then a clip of her from the front, gagged with gaffer tap and screaming.

The ASA considered that those ads that neither showed nor suggested interpersonal violence but which nevertheless created a threatening atmosphere were inappropriate for broadcast during the day when young children might be watching, and therefore should have been given a post-7.30pm timing restriction. 

The ASA considered that those ads that implied extreme violence and torture were likely to distress older children and should therefore have been subject to a post-11pm restriction. 

The radio ad was not in breach because a “soft” version of the ad with only very brief and muffled sounds of chainsaws and screaming was aired during the day.  This was, in the ASA’s opinion, unlikely to cause distress.  The poster ad and the internet display ad also escaped censure.  Although displayed in an untargeted outdoor medium and across all pages of Odeon’s website respectively, because they did not include any images of interpersonal violence and did not depict the chainsaw being used as a weapon, the ASA concluded that they were unlikely to cause serious or widespread offence, or harm to children.  To read ASA Adjudication on Lions Gate UK Ltd, (24 April 2013), click here.

Gambling & Betting

William Hill ad that implied whole-market comparison with regard to best price claim when only seven bookmakers had been counted breaches rules on misleading advertising, substantiation and comparisons with identifiable competitors.

A press ad in the Racing Post was headlined “WHO’S BEEN THE BEST PRICE ON THE FAVOURITES SO FAR THIS SEASON?”  Below, the ad showed four boxes, each containing a big William Hill-branded football shirt and three smaller shirts branded with the names of other bookmakers.  Each shirt had a number representing the number of matches in which that company had offered the best price.  The first box was titled “BEST PRICE PREMIER LEAGUE” and text in the shirts stated “WILLIAM HILL 102; CORAL 27; BET365 0; BETFAIR 0”.

In response to a complaint that challenged whether the comparisons between the bookmakers in the ad were misleading and could be substantiated, William Hill said that the numbers in the shirts had been drawn from a wider comparison between seven bookmakers and that links within the web page referenced in the ad took the reader to the raw data being used to compile that information.  It added that whilst there would always be other gambling companies both on and offline who would offer gambling opportunities, it had taken the major operators from within the industry based on market share and net gambling revenue.

The ASA noted that William Hill had conducted a comparison between seven bookmakers only and not the whole market or just the named bookmakers as implied by the ad.  The ASA also noted that the raw data was missing seven matches from the season.  Although William Hill had argued that the comparison included all the top bookmakers, the ASA noted that the comparison omitted SkyBet, despite its ranking above other bookmakers that had been included, in terms of net gaming revenue.  It also considered that the presence of the named bookmakers on the shirts in each league would be interpreted as those who had ranked after William Hill in that comparison. 

Because the ASA considered that the data did not show that William Hill had offered the best prices on the favourites during the season when compared with the whole market, it concluded that the ad was misleading and breached CAP Code rules 3.1, 3.3 (Misleading advertising), 3.7 (Substantiation) and 3.33 (Comparisons with Identifiable Competitors).  To read ASA Adjudication on WHG Trading & WHG (International) Ltd (24 April 2013) in full, click here.

Gambling Commission publishes advice for society lotteries, local authority lotteries and external lottery managers on requirements relating to distribution of lottery proceeds.

The purpose of the note is to provide advice to the promoters of society and local authority lotteries and others about the requirements of the Gambling Act 2005 relating to the distribution of lottery proceeds collected by non-commercial societies, local authorities and External Lottery Managers (ELMs) making the arrangements for lotteries on their behalf.

The aim is to help societies, local authorities and ELMs in understanding the requirements and the Commission’s approach in respect of compliance with the Act’s requirements.

The note also contains some advice supplementary to the requirements of the Act, relevant regulations and the Licence Conditions and Codes of Practice.  Operators must also ensure they meet those requirements.  To read the advice note, click here.

Gambling Commission publishes document summarising its existing approach to supervision of remote and non-remote casinos under Money Laundering Regulations 2007.

All gambling operators have a responsibility to keep financial crime out of gambling.  Non-remote and remote casinos have additional responsibilities under the Money Laundering Regulations 2007.  Further, the Gambling Commission has a duty as a supervisory authority to ensure that adequate controls are in place to prevent casinos from being used for money laundering or terrorist financing.

The Commission uses a risk-based approach to combating money laundering and terrorist financing and advocates the adoption of this approach by gambling operators.  The recently published document summarises the Commission’s approach in order to help gambling operators adopt the same approach.  To read the document, click here.

Computer Games

Department for Culture, Media and Sport publishes revised draft legislation on cultural tests for creative sector tax reliefs.

The updated draft of the Cultural Test (Programmes and Video Games) Regulations 2013 relates to Parts 15A and 15B of the Corporation Tax Act 2009 and will introduce points-based “cultural tests” for television programmes (dramas, documentaries and animation) and video games. The tests determine whether a programme or video game may be certified as “British” by the Secretary of State for Culture, Media and Sport.  Certification as a British programme or video game is a condition of eligibility for the European Commission’s state aid approval and tax relief under the Act.

A previous draft of these Regulations was published alongside the draft Finance Bill 2013 on 11 December 2012.  Amendments have now been made following consultation.

The Government says that it has published the draft Regulations before the legislation becomes law so that applicants seeking tax relief for a British programme can assess their eligibility and consider submitting a draft cultural test application to the British Film Institute.  For a link to the draft Regulations, click here.

Advertising

European Court of Human Rights says ban on paid political advertising in UK is justified.

The applicant was Animal Defenders International (ADI) whose objects include protecting animals from suffering.  In 2005 ADI began a campaign entitled “My Mate’s a Primate”, directed against the keeping and exhibition of primates in zoos and circuses and their use in television advertising.  As part of the campaign, ADI wished to broadcast a TV ad with images of a girl in chains in an animal cage followed by a chimpanzee in the same position.  It submitted the advert to the Broadcast Advertising Clearance Centre (BACC) for review.  BACC refused to clear the ad, drawing attention to the political nature of ADI’s objectives.  It said that the ad was prohibited under s 321(2) of the Communications Act 2003.

BACC’s decision was upheld by the High Court in December 2006 and by the House of Lords in March 2008.  

Relying on Article 10, ADI complained to the European Court of Human Rights that it had been unjustifiably denied the opportunity to advertise on television or radio.

The court noted that it had to decide whether the ban imposed by the legislature went too far in restricting the right to participate in public debate.  To do so, it had to balance ADI’s right to impart information and ideas of general interest that the public is entitled to receive with the authorities’ desire to protect the democratic debate and process from distortion by powerful financial groups with advantageous access to influential media.

There were three main considerations: i) the process by which the ban had been adopted and any review by the judicial authorities; ii) the impact of the ban and any steps that might have been taken to moderate its effect; and iii) how other countries, particularly those where the Convention applies, deal with such matters.

The court noted that the complex regulatory regime governing political broadcasting in the UK had been subjected to exacting and pertinent reviews and validated by both parliamentary and judicial bodies.  There was an extensive pre-legislative review of the ban, which was enacted with cross-party support without any dissenting vote.  The proportionality of the ban was also examined in detail in the High Court and the House of Lords.  At all stages the compatibility of the measure with the Convention was considered and relevant Convention case law analysed.

The Court rejected ADI’s arguments, which took issue with the rationale underlying the legislation, finding that:

  • the broadcast media is influential, its impact immediate and powerful.  There was no evidence that the development of the internet and social media in recent years had shifted this influence to the extent that the need for a ban specifically on broadcast media should be undermined;
  • advertisers, well aware of the advantages of broadcast advertising, continued to be prepared to pay large sums of money for such advertisements, which went far beyond the reach of organisations such as ADI who wished to participate in the public debate;
  • the ban was relaxed in a controlled fashion for political parties, which are the bodies most centrally part of the democratic process, by providing them with free party political, party election and referendum campaign broadcasts;
  • allowing a less restrictive prohibition could give rise to abuse and arbitrariness, such as wealthy bodies with agendas being fronted by social advocacy groups created for that precise purpose.  Given the complex regulatory background, this form of control could lead to uncertainty, litigation, expense and delay.

As to the impact of the ban, the court noted that the ban only applied to advertising and ADI had access to alternative media, both broadcast (radio and television discussion programmes of a political nature or adverts on radio and television on non-political matters) and non-broadcast (print media, the internet and social media, demonstrations, posters and flyers).

Finally, the court found that, while there may be a trend away from broad prohibitions, there was no European consensus on how to regulate paid political advertising in broadcasting.  A substantial variety of means are employed by the Contracting States to regulate political advertising, reflecting the wide differences in historical development, cultural diversity, political thought and democratic vision.  That lack of consensus meant that the UK Government had more room for manoeuvre when deciding on such matters as restricting public interest debate.

Therefore the Court considered that convincing reasons had been given for the ban on political advertising in the UK and that it had not amounted to a disproportionate interference with ADI’s right to freedom of expression.  Accordingly, there had been no violation of Article 10.  (Animal Defenders International v the United Kingdom (application no 48876/08) – to read the judgment in full, click here).

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