HomeInsightsNeed to Know – 2014.04.07

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Introduction

This week’s update includes the news of the delay in the start date for the Independent Press Standards Organisation and the Court of Appeal’s decision that it is not possible to exercise a common law possessory lien over a publishing database.  We also report on the Article 29 Data Protection Working Party’s Opinion on Personal Data Breach Notifications, plus the European Data Protection Supervisor’s 2013 Annual Report.  The City of London Police has called on advertising and brand sectors to help tackle cyber crime, whilst the Government has launched CERT-UK, the UK’s national Computer Emergency Response Team, to manage and prepare for national cyber security incidents.  Meanwhile, the European Parliament has adopted a Recommendation on media broadcasting strategy and Ofcom has published a Note to Broadcasters on election programming.

General

High Court considers whether no variation clause in distribution agreement prevented variation where the actions of the parties purported to amend the agreement.

Ofcom publishes 2014/15 Annual Plan confirming strategy and work programme for next financial year.

Technology

MEPs vote in favour of Commission’s “Connected Continent” legislative proposal.

City of London Police calls on advertising and brand sectors to help tackle cyber crime.

Government launches CERT-UK, the UK’s national Computer Emergency Response Team, to manage and prepare for national cyber security incidents.

PhonepayPlus publishes compliance update for Directory Enquiry services.

Data Protection

European Data Protection Supervisor publishes 2013 Annual Report.

Article 29 Data Protection Working Party publishes Opinion on Personal Data Breach Notification.

Broadcasting

European Parliament adopts Recommendation on media broadcasting strategy.

Ofcom publishes Note to Broadcasters on election programming.

Publishing

Start date for Independent Press Standards Organisation delayed.

Court of Appeal confirms not possible to exercise common law possessory lien over database.

Law Commission publishes second report on contempt of court.

Sport

FIFA opens tender for UK media rights to 2018 and 2022 FIFA World Cups.

Advertising

PhonepayPlus publishes Affiliate Marketing Discussion Paper.

ASA rejects complaint that placement of Tia Maria ad before Adele video on YouTube was irresponsible.

General

High Court considers whether no variation clause in distribution agreement prevented variation where the actions of the parties purported to amend the agreement.

An agreement to distribute a device for the treatment of cold sores contained an express written provision that “This Agreement shall not be modified in any way except by a subsequent written instrument signed by both parties.”

The rights holder (VDL) purported to exercise a right of termination under the agreement on the grounds that the distributor (LLC) had not paid it a sum due in 2008.  LLC contended however that the terms of the agreement had been varied in early 2009 so that the sum in question (£25,000) was not due and payable until US Food and Drug Administration (FDA) approval for the device had been obtained, which had not happened at the date of termination.

The judge, Stuart-Smith J, was satisfied that in principle a no variation clause could be overridden by the actions of the parties.  Factors to be taken into account included whether the clause was specifically negotiated or insisted on by one party, and the fact that the agreement included a written clause excluding any unwritten modification.  The court therefore had to look closely both at whether the parties subsequently reached an agreement that would, if enforced, vary the effect of the original contract and also at whether, in reaching that agreement, the parties intended to enter into legal relations so as to vary the terms of their original contractual obligations.  In assessing the question all relevant facts had to be given their due weight and the burden of proof rested on the person who had alleged that the original contractual obligations had changed, with the standard of proof being the balance of probabilities.

Stuart-Smith J conducted a thorough review of the correspondence between the parties to find that an offer was made by VDL to amend the payment proposal in January 2009 and this was accepted by LLC during a telephone call, or if not accepted during that conversation, by LLC continuing to expend money and resources seeking FDA approval.  The judge was therefore satisfied that the agreement had been varied without a written instrument signed by both parties, notwithstanding the provisions of the agreement (Virulite LLC v Virulite Distribution Ltd [2014] EWHC 366 (26 February 2014) – to read the judgment in full, click here).

Ofcom publishes 2014/15 Annual Plan confirming strategy and work programme for next financial year.

The Plan states that Ofcom will continue to monitor and promote new network deployment.  Ofcom says that superfast broadband is now available to around three quarters of UK households and is expected to reach 95% of premises by 2017.  Four national mobile operators are rolling out competing high-speed 4G services, with most expecting to reach 98% of the population by next year.

The Plan states that one of the themes will be quality of service.  Ofcom says it is developing new targets for Openreach, which would mean faster line repairs and installations for broadband and telephone customers.  Ofcom says that it is also working with mobile operators to improve the information it makes available to consumers on quality of service, and will publish research on the average mobile broadband speeds received by 3G and 4G customers.

The Plan states that Ofcom has placed its annual priorities into the following categories:

  • Promote effective competition and informed choice: Ofcom will continue to focus on ensuring competition and investment in current and superfast broadband and promoting choice for consumers through clear information and efficient switching processes;
  • Secure optimal use of spectrum: this work will include encouraging spectrum sharing through new technology such as “white spaces”, and delivering spectrum for the Glasgow 2014 Commonwealth Games;
  • Promote opportunities to participate: Ofcom will seek to ensure the wide availability of communications services and to reduce barriers to their adoption and effective use by consumers.  As part of this, Ofcom says there will work to promote the provision of better mobile coverage and service information;
  • Protect consumers from harm: Ofcom says it will continue to manage the reform of non-geographic telephone numbers, which will bring about clearer phone charges for consumers and free 080 calls on mobile phones from summer 2015.  Ofcom will also work to protect consumers from harm in areas such as nuisance calls and unexpectedly high mobile bills;
  • Maintain audience confidence in broadcast content: Ofcom says it will work with industry and other regulators to develop a consistent approach to media standards regulation.  Ofcom will also support work to help keep children safe online.  This will include reports for the Government on parental controls and an assessment of protection measures put in place by ISPs; and
  • Contribute to and implement public policy defined by Parliament: as part of this, Ofcom says it will work to ensure that the European Commission’s “Connected Continent” proposals support the interests of UK consumers and citizens.

Finally, Ofcom is required by Parliament to carry out reviews of public service broadcasting.  In 2014/15, Ofcom will begin its third PSB review, which will consider challenges facing the industry and assess how the needs of citizens and consumers can best be delivered.  Ofcom expects to publish its conclusions by the summer of 2015.  For a link to Ofcom’s Annual Plan, click here.

Technology

MEPs vote in favour of Commission’s “Connected Continent” legislative proposal.

The “Connected Continent” telecoms Regulation was proposed by the Commission in September 2013.  It aims to create a truly single market for telecoms in the EU by ending roaming charges, guaranteeing an open internet for all by banning blocking, coordinating spectrum licensing for wireless broadband, giving internet and broadband customers more transparency in their contracts and making it easier for customers to switch providers.  MEPs have now approved the proposed legislation by 534 votes to 25, with 58 abstentions.

Under the proposed Regulation, internet access providers would still be able to offer specialised services of higher quality, such as video on demand and business-critical data-intensive “cloud” applications, provided that such services are not supplied to “the detriment of the availability or quality of internet access services” offered to other companies or service suppliers.

MEPs amended the Regulation by shortening the Commission’s list of “exceptional” cases in which internet access providers could still be entitled to block or slow down the internet.  MEPs say these practices should be permitted only to enforce a court order, preserve network security or prevent temporary network congestion.  If such traffic management measures are used, they must be “transparent, non-discriminatory and proportionate” and “not be maintained longer than necessary”.

Further, MEPs emphasised that internet access should be provided in accordance with the principle of “net neutrality”, which means that all internet traffic is treated equally, without discrimination, restriction or interference, independently of its sender, recipient, type, content, device, service or application.

MEPs also amended the text to ban “roaming” charges anywhere in the EU as of 15 December 2015.  If roaming services are abused, however, capped charges could be imposed.

EU Member States will now continue to review the Regulation and the Commission expects final agreement of the Regulation by the end of 2014.  To read the European Parliament’s press release in full, click here.

City of London Police calls on advertising and brand sectors to help tackle cyber crime.

The Police Intellectual Property Crime Unit (PIPCU) based in the City of London Police has called upon advertisers and brand holders to continue to support its work to tackle intellectual property crime following the launch of its Infringing Website List (IWL).  The IWL, the first of its kind to be developed, sets out to disrupt the advertising revenues on illegal websites globally.

The initiative forms part of the unit’s “Operation Creative”, designed to disrupt and prevent websites from providing unauthorised access to copyrighted content, in partnership with the creative and advertising industries.

The IWL is an online portal providing the digital advertising sector with an up-to-date list of copyright infringing sites, identified by the creative industries and evidenced and verified by the City of London Police unit, so that advertisers, agencies and other intermediaries can cease advert placement on these illegal websites.

PIPCU says that disrupting advertising is a vital part of Operation Creative, as advertising is a key generator of criminal profits for websites providing access to infringing content.  A recent report by the Digital Citizens Alliance estimated that in 2013 piracy websites generated $227million from advertising.

Detective Chief Inspector Andy Fyfe, Head of PIPCU, said “If an advert from an established brand appears on an infringing website not only does it lend the site a look of legitimacy, but inadvertently the brand and advertiser are funding online crime.  Therefore the IWL also serves as a safety tool, ensuring the reputation of advertisers and brands are not discredited through association with illegal websites”.  To read PIPCU’s press release in full, click here.

Government launches CERT-UK, the UK’s national Computer Emergency Response Team, to manage and prepare for national cyber security incidents.

CERT-UK will take the lead in coordinating the management of national cyber security incidents and will act as the UK central contact point for international counterparts in this field.

CERT-UK will work closely with industry, government and academia to enhance UK cyber resilience.  This includes working with government departments and industry partners, sharing information with UK industry and academic computer emergency response teams and collaborating with national CERTs around the globe to enhance understanding of the cyber threat.

CERT-UK will build on existing arrangements for supporting the critical national infrastructure, and incorporate the Cyber Security Information Sharing Partnership (CISP), which was launched last year.

CERT-UK has four main responsibilities that flow from the UK Cyber Security Strategy:

  • national cyber security incident management;
  • support to critical national infrastructure companies to handle cyber security incidents;
  • promoting cyber security situational awareness across industry, academia and the public sector; and
  • providing the single international point of contact for co-ordination and collaboration with other national CERTs.

CERT-UK does not have responsibility for the national infrastructure but will work closely with those companies that run the critical national infrastructure.  CERT-UK will provide advice and guidance to help companies prepare and protect themselves, as well as expertise to help respond once an incident is reported.  To read the Government’s press release in full, click here.

PhonepayPlus publishes compliance update for Directory Enquiry services.

The compliance update is relevant to all providers of premium rate services that are defined as Directory Enquiry services and operate on the 118 number range.

PhonepayPlus has recently seen a growing number of complaints about Directory Enquiry services.  The latest involved the imposition of a fine of £80,000 against the 118 118 service, which ran adverts on London buses and on its website that did not comply with the PhonepayPlus Code of Practice.  Consumers said that they were not aware how much the service cost and a number of complainants had experienced “bill shock”.  

In light of the recent growth in complaints and investigations, coupled with the increased cost of Directory Enquiry services, PhonepayPlus has issued the update to remind Directory Enquiry providers of existing responsibilities and to set out how the Tribunal is likely to interpret the Code.

PhonepayPlus is therefore reminding 118 Directory Enquiries providers that under the regulations:

  • they should include pricing information wherever the directory enquiries service is promoted, including on websites and phone directories;
  • on websites, pricing information should be proximate to the directory enquiries service and in no circumstances should it be displayed “below the fold” so consumers have to scroll down the website to see the cost of the call;
  • they should make clear the difference between any non-premium rate services they operate and the Directory Enquiries service so consumers do not confuse the non-premium rate web service with a premium rate call to action;
  • if promotional material is displayed on a moving object such as a train or bus, or a billboard that is likely to be seen fleetingly from moving objects, providers should ensure the cost of the service as well as the number is in a font size that is clear even when seen quickly or from a distance; and
  • where consumers call a Directory Enquiries service they should be able to get through to an operator or automated facility for providing information to receive the number they are looking for and get the number, without any unreasonable delay.

For a link to the full update, click here.

Data Protection

European Data Protection Supervisor publishes 2013 Annual Report.

The EDPS presented his 2013 Annual Report to the Committee on Civil Liberties, Justice and Home Affairs at the European Parliament.  The Report states that the reform of EU rules on data protection will support the recovering, but still fragile, European economy.  The new rules should provide for clarity and consistency throughout Europe, as the same rules will apply to all firms who do business in the EU, regardless of where they are based, and citizens will be more confident of how their personal information is treated.

In 2013, the review of the EU legal framework for data protection continued to be at the top of the EDPS agenda and will remain a priority in 2014.  The Digital Agenda and the privacy risks of new technologies were also significant features of 2013.

The implementation of the Stockholm programme in the area of freedom, security and justice and issues in the internal market, such as financial sector reform, and in public health and consumer affairs, also had an impact on data protection.  The EDPS also increased his cooperation with other supervisory authorities, particularly with regard to large-scale IT systems.

In the supervision of EU institutions and bodies, when processing personal data, the EDPS interacted with more data protection officers in more institutions and bodies in 2013 than ever before.  In addition, a number of EDPS surveys revealed that most EU institutions and bodies, including many agencies, have made good progress in complying with the data protection Regulation, although there are still some which should increase their efforts.

The main challenge for the EDPS in 2013 was that the organisation’s activities continued to grow both in scale and scope while budget restraints due to the financial crisis were still in place.  Nevertheless, the Report states, the EDPS has developed into a mature organisation, able to address the many challenges of a data protection authority in a highly dynamic environment.  For a link to the full Report, click here.

Article 29 Data Protection Working Party publishes Opinion on Personal Data Breach Notification.

In the Opinion, the Article 29 Working Party provides guidance to all data controllers to help them to decide whether to notify data subjects in case of a personal data breach.  Although the Opinion considers the existing obligations of providers of electronic communications under the e-Privacy Directive (2002/58/EC), it also provides examples from various sectors in the context of the proposed draft data protection Regulation and presents good practices for all controllers.

While notification to the relevant authority is required for all data breaches under the 2002 Directive, the Opinion analyses personal data breaches requiring notification to data subjects.  It also sets out actions that controllers should take when implementing their systems to avoid personal data breaches, including measures that would exempt the controller from having to notify data subjects.  For a link to the full Opinion, click here.

Broadcasting

European Parliament adopts Recommendation on media broadcasting strategy.

The new Recommendation is aimed at promoting freedom of expression, media pluralism and strengthening democracy and human rights within its foreign policy.

The Recommendation encourages European media broadcasting internationally to ensure accurate and objective news coverage and reflect the diversity of opinions and contexts in the EU while maintaining their editorial independence.

The Recommendation recognises that broadcasting for democratisation and the promotion of human rights in third countries does not explicitly fall within the remit of EU media policy, but suggests exploring ways in which the EU Member States can coordinate media actions and strategies.

It also calls on media outlets that currently receive EU funding to be more transparent and publish an overview of their revenues.

Sir Graham Watson (ALDE, UK), who drew up the Recommendation, said: “Foreign policy is often thought of in terms of armies and diplomacy.  But we should not underestimate the influence and reach of news broadcasting, especially in emerging democracies.  Broadcasters across Europe can play an important role in promoting democracy, human rights, freedom of expression and media pluralism.  In doing so, they must maintain full journalistic independence and provide accurate and objective news coverage”.  To read the European Parliament’s press release in full, click here.

Ofcom publishes Note to Broadcasters on election programming.

On 22 May 2014, European Parliamentary elections will be held in the UK.  In addition, local and mayoral elections will be held in a number of English local authority areas, and local elections will be held in Northern Ireland.

Ofcom reminds all broadcasters that “great care” needs to be taken when broadcasting election related programming.  In particular, broadcasters should ensure that they comply with Section Five (Due Impartiality) and Section Six (Elections and Referendums) of the Broadcasting Code, as well as the prohibition of political advertising contained in s 321 of the Communications Act 2003.

Ofcom says it will consider any breach arising from election related programming to be potentially serious, and will consider taking regulatory action, as appropriate, in such cases, including considering the imposition of a statutory sanction.  To read the Note to Broadcasters as published in Issue 251 of Ofcom’s Broadcast Bulletin, click here.

Publishing

Start date for Independent Press Standards Organisation delayed.

In a press notice, Sir Hayden Phillips, Chairman of the Independent Panel selecting the Chair and Board Members for the new Independent Press Standards Organisation, said that the Panel is on track to appoint the Chair of IPSO by the beginning of May following the receipt of “a large number of high quality applications”.  Once appointed, the Chair will join the Appointments Panel to select the rest of the Board, with a view to having IPSO up and running in early June, Sir Hayden said. 

Sir Hayden recognised that this was later than the start date originally envisaged, which was 1 May, but said that due to the large number of applications, “we now feel it sensible to allow ourselves more timeSir Hayden concluded: “While it is important for IPSO to be operational as soon as possible, our view is that what matters most is to get the process right for these important roles”.  To read the press notice in full, click here.

Court of Appeal confirms not possible to exercise common law possessory lien over database.

Reversing a High Court ruling that a data manager was entitled to withhold the data until the publisher had paid all outstanding fees relating to the provision of database services, the Court of Appeal has confirmed that it is not possible to exercise a common law possessory lien over a database pending payment because information stored electronically does not constitute property that can be possessed.  The court concluded that a database was a chose in action, not a chose in possession or chattel.  Traditionally, common law liens only apply to the latter; for example, a lien can be exercised over a car by a garage until the service charge is paid.  As the database was intangible in nature, rather than “goods” that could be possessed, the court held that the data manager had no right under common law to withhold access to the database pending payment of fees.  (Your Response Ltd v Datateam Business Media Ltd [2014] EWCA Civ 281 (14 March 2014) – to read the judgment in full, click here).

Law Commission publishes second report on contempt of court.

The Law Commission says that the recommendations it makes in the report would:

  • ensure that court reporting postponement orders are all posted on a single publicly accessible website (a similar website currently operates in Scotland);
  • include a further restricted service where, for a charge, registered users could find out the detail of the reporting restriction and could sign up for automated email alerts of new orders; and
  • greatly reduce the risk of contempt for publishers (from large media organisations to individual bloggers) and enable them to comply with the court’s restrictions or report proceedings to the public with confidence.

For a link to the report, click here.

Sport

FIFA opens tender for UK media rights to 2018 and 2022 FIFA World Cups.

FIFA has opened an invitation to tender for media rights in the UK for the 2018 and 2022 FIFA World Cups.  These rights cover TV, IPTV, internet, mobile and radio transmissions for FIFA’s flagship competition, which will be held in Russia in 2018 and Qatar in 2022.

Niclas Ericson, Director of FIFA’s TV Division said: “This tender is designed to help FIFA identify and select the media entity in the territory that is able to operationally secure the transmission commitments required by FIFA, as well as achieve FIFA’s overall objectives of reaching the widest possible audience and financial targets for our broader mission in football”.

Media companies can request the invitation to tender documentation from the following email address: europe-media-tender@fifa.org.  The request needs to state the names and titles of those who will interact with FIFA in the procedure.  Following a question and answer period lasting from 4 to 25 April 2014, submissions to FIFA must be received by 17.00 CET on 28 April 2014, whereupon negotiations with preferred bidders will open on 29 April.  To read FIFA’s press release in full, click here.

Advertising

PhonepayPlus publishes Affiliate Marketing Discussion Paper.

The Discussion Paper intends to help PhonepayPlus and the industry support each other to ensure consumers are protected and compliant members of the industry can operate with confidence.  The Paper sets out the regulator’s current approach to regulation, discusses what good practice may look like, suggests further sources of information and details actions it is taking with industry to help ensure affiliate marketing can be used compliantly.

While this is not a formal consultation, PhonepayPlus says that it would welcome responses from in and outside the industry to the discussion document.  The Paper poses a number of questions relating to the current and future use of affiliate marketing, but PhonepayPlus would also welcome comments beyond the scope of these.  The deadline for responses is 26 May 2014.  To access the Paper, click here.

ASA rejects complaint that placement of Tia Maria ad before Adele video on YouTube was irresponsible.

A voice-over of a video ad, which appeared before a music video featuring Adele on YouTube, showed a drink being prepared.  The voice-over stated “Mix the ice with the intriguing darkness of Tia Maria.  A hint of rum, cola, and a splash of lime for the final twist … when the sun goes down, Tia Maria.”  The final shot showed a bottle of Tia Maria and the finished drink.  On-screen text stated “Enjoy Tia Maria Responsibly … for the facts drinkaware.co.uk … WHEN THE SUN GOES DOWN”.

Responding to a complaint that a significant number of the audience for the music video were likely to be under 18 years of age, the advertiser, Illva Saronno SpA stated that the only chance a minor would see the ad was if they were viewing with an adult, or if they were using their log-in details.  YouTube said that it only served alcohol ads to users who were logged in and over 18 and that it did not consider that the video before which the ad appeared was particularly likely to appeal to children.

The ASA noted that the ad would only have been seen by YouTube users who were registered as aged 18 or over and were logged into their accounts and therefore considered that the advertisers had taken reasonable steps to prevent those who were under 18 from viewing the ad.  As such, the ad was not in breach of CAP Code rules 1.3 (Social responsibility) and 18.15 (Alcohol).  To read ASA Adjudication on Illva Saronno SpA (2 April 2014) in full, click here.

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