HomeInsightsNeed to Know – 2015.03.02

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General

Court of Justice of European Union finds that artist’s resale royalty can be paid by either seller or buyer, according to contractual arrangements.

Technology

Ofcom confirms 1 July 2015 as the implementation date for the introduction of new rules governing certain non-geographic number ranges.

Ofcom publishes UK fixed-line broadband performance report.

Ofcom publishes consultation setting out proposals for authorising certain types of “white space” devices on a licensed basis.

Nominet announces new domain name endings for Wales: .cymru and .wales.

Data Protection

Section 56 Data Protection Act 1998 to come into force, making it a criminal offence to require an employee or job applicant to obtain their criminal record for their employer by way of a subject access request.

Government to crack down on nuisance calls and texts.

Information Commissioner’s Office welcomes change to law on nuisance calls and texts.

Broadcasting

Ofcom announces trials to help small radio stations join digital radio.

Publishing

Court of Appeal dismisses appeal that accusation of dishonourable conduct could not be defamatory.

Gambling & Betting

Casino Classic “Free casino bonus” ad misleading because offer was described in a manner contrary to the actual limitations imposed.

Advertising

Committee for Advertising Practice publishes reminder on what constitutes a “political ad” and when such ads fall within the remit of the Advertising Standards Authority.

General

Court of Justice of European Union finds that artist’s resale royalty can be paid by either seller or buyer, according to contractual arrangements.

The resale right is the right of the author of an original work of art to receive a royalty based on the sale price of any resale of the work subsequent to the first transfer or sale of the work.  The right applies to all re-sales involving art market professionals (i.e. salesrooms, art galleries and dealers in works of art) as sellers, buyers or intermediaries.

Christie’s France SNC, the French subsidiary of the multinational firm Christie’s, regularly holds auctions of works of art.  A resale royalty is payable in respect of some of those sales.  Christie’s France’s general terms and conditions state that, for certain lots, it will collect the resale royalty from the buyer for and on behalf of the seller.

The Syndicat National des Antiquaires argued that, by putting the onus of the resale royalty on the buyer, Christie’s France’s terms and conditions amounted to unfair competition.  Christie’s France argued that, although the 2001 Directive states that it is the seller who must bear the cost of the resale right, it does not preclude the parties from deciding between them which party should pay the royalty.  The French appeal court asked the CJEU whether the seller must always bear the cost of the royalty or whether it is possible to depart from that rule by agreement.

The CJEU held that Member States alone can determine which party should be liable for the royalty.  Although the 2001 Directive does indeed provide that the royalty is payable by the seller, it nonetheless allows for a derogation from that rule and leaves Member States at liberty to specify another party from those listed in the Directive who, either alone or together with the seller, can assume liability for payment of the royalty. 

Further, the CJEU said, the designated party can contractually agree with any other party, including the buyer, that that other party will bear, in whole or in part, the cost of the royalty, provided that such contractual arrangement does not affect the obligations that that party has towards the author of the work in question.

The CJEU noted that such derogation is in keeping with the Directive’s objective of not distorting competition in the art market, since the harmonisation purpose of the Directive is limited to those domestic provisions that have the most direct impact on the functioning of the internal market.  For the purpose of achieving that objective, domestic law must state which party is liable for payment of the royalty and set out the rules for establishing the amount payable.  However, such provision is not necessary as far as the question of who, definitively, will bear the cost of the royalty is concerned.

That said, however, the CJEU did not exclude the possibility that such derogation may to some extent have a distorting effect on the functioning of the internal market.  However, any such effect would be indirect since it arises as a result of contractual arrangements that are independent of the payment of the resale royalty to the author.  (Case C-41/14 Christie’s France SNC v Syndicat national des antiquaires 26 February 2015 (unreported) – to access the judgment in full, go to the curia search form, type in the case number and follow the link).

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Technology

Ofcom confirms 1 July 2015 as the implementation date for the introduction of new rules governing certain non-geographic number ranges.

In December 2013, Ofcom decided to change the regulation of Freephone (080 and 116) and revenue-sharing number ranges (084/087/09/118).  The changes were that:

  • freephone should be free to callers from all telephones (fixed or mobile); and
  • revenue-sharing ranges should be billed in an unbundled manner: the caller charge should be in two parts, a service charge which is the portion of the charge passed back to the party being called, and an access charge which is the charge set by the caller’s phone company.

The date set in Ofcom’s regulations for implementation of the new rules was 26 June 2015.  However, feedback from industry was that the changes would best be implemented on the first of a calendar month for billing and communications purposes, as well as for the benefit of consumers.  Ofcom has therefore decided to move the implementation date to 1 July 2015.  To read Ofcom’s decision in full, click here.

Ofcom publishes UK fixed-line broadband performance report.

Nearly one in three UK broadband connections (32%) are “up to” 30Mbit/s or above services.  This figure is up from 24% in November 2013 according to Ofcom’s latest broadband performance report.

Ofcom says that the growing take-up of superfast cable or fibre connections, delivering 30Mbit/s and above, has resulted in average UK broadband speeds increasing by a fifth in the six months to November 2014.

The average UK broadband speed is now 22.8Mbit/s, up from 18.7Mbit/s in May 2014, marking the largest absolute rise in broadband speeds Ofcom has recorded.  To read Ofcom’s press release and for a link to the report, click here.

Ofcom publishes consultation setting out proposals for authorising certain types of “white space” devices on a licensed basis.

“White spaces” are gaps in the radio spectrum in frequency bands which can be used to offer wireless applications.

While Ofcom expects most white space devices will operate on a licence-exempt basis in the future, many do not currently meet Ofcom’s requirements for licence exemption and require manual configuration by the user.

Ofcom is therefore considering whether these manually configured devices should be licensed on a transitional basis, while equipment is developed which meets Ofcom’s licence exemption regulations.  Ofcom says that it would propose to review whether authorisation is still required after around three years.

The consultation follows Ofcom’s recently published statement allowing white spaces devices that are able to operate automatically and without any manual configuration to operate in the UHF TV band on a licence-anexempt basis. 

The consultation closes on 10 April 2015.  To access the consultation documentation, click here.

Nominet announces new domain name endings for Wales: .cymru and .wales.

The new domains became available from St. David’s Day, Sunday 1 March 2015.

New research commissioned by Nominet shows that pride in being Welsh is strong, and two-thirds (65%) of adults in Wales identify themselves as mainly or partly Welsh, as opposed to simply British, and almost all of this group (97%) expressing pride in their heritage.  The new domain endings allow individuals and businesses to show their Welsh identity online.

The research shows significant interest in the new online home for Wales, with two-thirds (65%) of adults in the country saying they would want to highlight their Welsh connections through a dedicated .cymru or .wales domain name if they were launching a new personal or business website.  Previous research from Nominet found that 70% of consumers and 59% of businesses in Wales believe it should have its own domain space, bringing it into line with other countries across the world.

In a unique approach developed especially for these domains, both .cymru and .wales will be bilingual and allow the registration of names with the diacritic marks used in the Welsh language.  To read Nominet’s press release in full, click here.

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Data Protection

Section 56 Data Protection Act 1998 to come into force, making it a criminal offence to require an employee or job applicant to obtain their criminal record for their employer by way of a subject access request.

Section 56 of the DPA is the only section of the Act not yet in force.  The Data Protection Act 1998 (Commencement No. 4) Order 2015 will bring s 56 into force on 10 March 2015.

The practice of requiring a job applicant or an employee to obtain copies of their criminal records by way of a subject access request is known as “enforced subject access”.  Employers have used it in the past as a recruitment tool or as a condition of continued employment.  Section 56 of the DPA (“Prohibition of requirement as to production of certain records”) now makes enforced subject access a criminal offence, punishable by way of an unlimited fine.

The Information Commissioner’s Office’s guidance already advises against enforced subject access as a means of obtaining a person’s criminal record.  The correct way to obtain a person’s criminal record is, in fact, to use the Disclosure and Barring Service instead. 

Section 56 also makes it an offence to make the provision (for payment or not) of goods, facilities or services to another person conditional on that person (or a third party) providing a relevant record.  To read s 56 of the DPA in full, click here.

Government to crack down on nuisance calls and texts.

The law currently requires the Information Commissioner’s Office to prove that a company caused “substantial damage or substantial distress” by their conduct before any action can be taken.  

Following a six-week public consultation, as previously reported in N2K, the Government is now removing this legal threshold, giving the ICO the power to intervene in more cases.  

The Privacy and Electronic Communications (EC Directive) (Amendment) Regulations 2015 will, with effect from 6 April 2015, amend s 55A(1) of the Data Protection Act 1998 (“Power of Commissioner to impose monetary penalty”) when it applies to the Electronic Communications (EC Directive) Regulations 2003.  The ICO can already fine companies guilty of making unsolicited calls and texts up to £500,000, but it will no longer need to prove “substantial damage or substantial distress”.

The Government has also confirmed that it will look at introducing measures to hold board level executives responsible for nuisance calls and texts.  This follows a report from the taskforce led by Which? in December 2014, which called for a review of the rules in order to act as a stronger deterrent to rogue companies.

Being pestered by unwanted marketing calls and texts can, the Government says, bring “real misery” for the people on the receiving end.  The change in the law will, the Government says, make it easier for the Information Commissioner to take “quick and firm action against companies who give so much grief to so many people”.  To read the Government’s press release in full, click here.  To read the new legislation, click here.

Information Commissioner’s Office welcomes change to law on nuisance calls and texts.

The ICO has welcomed the Government’s announcement that it will make it easier for the ICO to take action against companies making nuisance calls and sending spam texts (see item above).

Welcoming the changes, Information Commissioner Christopher Graham said: “The rules around marketing calls have been a licence for spammers and scammers, and people are sick of them.  This law change gives consumers the chance to fight back.  We still need people to report these calls to us, but now we can use those complaints to better target the companies behind this nuisance”.  To read the ICO’s press release in full, click here.

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Broadcasting

Ofcom announces trials to help small radio stations join digital radio.

Ofcom has confirmed plans for trials of a new technology that could provide small radio stations across the UK with an affordable way to broadcast on DAB digital radio.

Known as “small scale DAB”, the new approach is, Ofcom says, best suited for broadcasting to small geographic areas, ideal for community and local radio stations.  Small scale DAB is cheaper than current systems because it uses software freely available from opendigitalradio.org, rather than relying on expensive hardware equipment.

Ofcom is planning up to 10 UK trials that will help inform its work on identifying suitable frequencies for broadcasting smaller digital stations and help understand how these services could be licensed.

Ofcom is inviting applications to take part in the trials, which are expected to run for nine months.  The deadline for applications is 3pm on 7 April 2015.  To read Ofcom’s news release, click here.

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Publishing

Court of Appeal dismisses appeal that accusation of dishonourable conduct could not be defamatory.

Both the claimant, Richard Rufus, and the defendant, Paul Elliott, were former professional footballers and used to be friends and business colleagues.  Mr Rufus assisted in community work through the Charlton Athletic Community Trust and Mr Elliott was involved in various anti-racism initiatives in football, including the “Kick it Out” anti-racism in football campaign.

The two men fell out over a business venture and it was common ground that as a result, Mr Elliott had sent a private text message to Mr Rufus in which Mr Elliott had used an extremely offensive word, and that the use of that word was offensive and wrong.  On 18 February 2013, both men were then the subject of an “exclusive” article in The Sun newspaper, which made the text public.  The article was entitled: “N-word slur by CBE Ace, Anti-racism chief’s rant” and contained prominent photographs of both men.  The article said that Mr Elliott had sent Mr Rufus a text message about a business venture which had gone wrong, which said: “Ur a stupid man n*****…You dog, Ur history my friend”.  The article went on to say that Mr Elliott had insisted that the term was not offensive because of the nature of the conversation, and because it was between two black men.

On 23 February 2013, Mr Elliott published a press release on the “Kick it Out” website.  It was headed “Paul Elliott CBE resigns as Kick it out Trustee”.  It said: “Earlier this week, a former friend and business colleague, made public a (sic) SMS text message I sent him, in which I used a term which is widely known as being derogatory to my community.  I regret using it; it is inappropriate and not part of my everyday vocabulary.  As an advocate of high-standards of public behaviour and integrity in public life, I know the use of this word sends out mixed messages and contradicts my position as a Kick it Out trustee”.

Mr Rufus issued libel proceedings against Mr Elliott arguing that the words complained of meant, by way of innuendo, that Mr Rufus had “acted dishonourably”, had “betrayed” Mr Elliott, and had “deliberately harmed his reputation” by making public the private SMS text communication.

Mr Elliott applied to the High Court to have Mr Rufus’s claim struck out on the ground that the words complained of were incapable of bearing a meaning defamatory of Mr Rufus.  Dingemans J rejected the application, finding that, in the context of The Sun article, right-thinking members of society might well infer from the words complained of that Mr Elliott was saying that Mr Rufus had acted disloyally to his former friend by making public his private text message.  The words were therefore capable of bearing a defamatory meaning by way of inference.  “I do not consider that this is the most serious of libels, but the words are capable of being defamatory”, Dingemans J said.  Mr Elliott appealed.

The Court of Appeal dismissed the appeal, finding that Dingemans J had correctly directed himself to the right principles of law, recognising that the case turned on the particular words used in their context and how right-thinking members of society might regard them.  It was possible, the Court of Appeal said, that those who read the press release thought both that Mr Elliott should not have said what he did, but the worse of Mr Rufus for having made what was essentially a private row public, given the circumstances.  It was equally possible that such people could infer from what was said that Mr Rufus owed Mr Elliott some residual loyalty, having regard to their past friendship and, by going public, had acted in a way that was both disloyal and wrong. 

The Court of Appeal rejected Mr Elliott’s argument that, because Mr Rufus owed no obligation to Mr Elliott to keep the text private under the law of confidence or privacy, it could not be defamatory of him to say that he had made the text public, whatever the factual context might otherwise be; in other words, that Mr Rufus’s conduct had been lawful.  In the Court of Appeal’s view, it was true that to allege that someone had acted unlawfully would normally (save for trivial examples or those that do not pass the threshold of seriousness) defame him or her, but it was not the law that merely because conduct was lawful, it could not be defamatory of someone to say that they had engaged in it.  (Paul Elliott v Richard Rufus [2015] EWCA Civ 121 (20 February 2015) – to read the judgment in full, click here).

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Gambling & Betting

Casino Classic “Free casino bonus” ad misleading because offer was described in a manner contrary to the actual limitations imposed.

An email promotion for the online betting website www.casinoclassic.co.uk was headed: “Play Casino with a £500 FREE Casino Bonus £500 FREE No Deposit Required”.  Text in the body of the ad stated: “We are offering you £500 – absolutely FREE! Play any game with £500 totally free and whatever you win in your first 60 minutes is yours to keep! No risk and no tricksClick Here to Claim Now! [link]”.  Small print at the bottom of the ad stated: “For new players only Terms & conditions may apply”.

The ASA found that the wording of the ad belied the significant conditions attached to the promotion, such as the requirement to place a certain number of bets, to make a certain amount of winnings and to make a deposit in order to claim limited winnings.  The ASA noted that the ad did not include any applicable terms of the offer or include a link that directed consumers to an easily accessible source where such terms were detailed.  It also noted that the link “Click here to claim now” in the ad directed consumers to a landing page, which did not include any of the offer terms and conditions, and therefore it was possible that consumers would be able to sign up to the offer without being aware of such terms.

The ASA concluded that the ad breached CAP Code rules 3.1 and 3.3 (Misleading Advertising), 3.7 (Substantiation), 3.9 (Qualification), 3.32 (Free) and 8.17 (Significant Conditions for Promotions).  To read the ASA Adjudication on Apollo Entertainment Ltd (25 February 2015), click here.

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Advertising

Committee for Advertising Practice publishes reminder on what constitutes a “political ad” and when such ads fall within the remit of the Advertising Standards Authority.

Towards the end of the 1990s political advertising was still subject to some Advertising Code rules, for example those relating to offence.  However, following the 1997 General Election, CAP made a decision to exclude political advertising from the ASA’s remit because of several factors that risked bringing advertising regulation in general into disrepute.

In the main, the exemption of political ads from the Code (from any source, not just established political parties) was down to freedom of speech considerations; namely that it is inappropriate for a body like the ASA to intervene in the democratic process.  Accordingly, the Code was changed in 1999 to state the following:

7.1 Claims in marketing communications, whenever published or distributed, whose principal function is to influence voters in a local, regional, national or international election or referendum are exempt from the Code.

7.2 Marketing communications by central or local government, as distinct from those concerning party policy, are subject to the Code”.

In light of rule 7.1 above, marketing communications intended to influence voters in a general election, for example, fall outside the scope of the Code.  It should be noted, CAP says, that whilst it could be argued that all marketing communications from political parties are intended to influence voters, the Code is intended to exempt certain types of advertisements, rather than certain types of advertiser.

Advertisements by local or central government, however, that are not intended to influence voters in an election, are subject to the Code, for example a local government ad promoting local Council services.  To read the CAP reminder, click here.

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