Legal ppt final

DMA North Legal Update – 15th April 2013

Connect with the DMA…

• The #tag for this event is: #dmalegal

• LinkedIn: DMA: Direct Marketing Association (UK) Limited

• Twitter: @DMA_UK/ @DMANorth

• DMA Website: http://www.dma.org.uk

• Email: dma@dma.org.uk or events@dma.org.uk

• Phone: 020 7291 3300 or 0161 918 6780

Today’s agenda 9.00 – 09.30: Registration and Breakfast09.30 – 09.35: Welcome and Event Introduction- Suzanne Kay, Regional Manager, DMA North 09.35 – 10.05: Intellectual Property

- Rupert Bent, Legal Director, Pinsent Masons10.05 – 10.35: The Draft EU Data Protection Regulation•Key points in the draft Regulation•Update - Caroline Roberts, Director of Public Affairs, DMA

10.35 – 10.55: Coffee break10.55 – 11.25: How the new Regulation will affect business•Key areas of change•What you should be doing now to plan for the Regulation- James Milligan, DMA Solicitor 11.25 – 11.55: The future of Data Protection•Other key developments in data protection•Round upof other DMA lobbying activities- Caroline Roberts, Director of Public Affairs, DMA

- James Milligan, DMA Solicitor 11.30 – 12.00: Q&A and Close

Comparative Advertising, Price Comparisons and AdWords

Rupert Bent

15 April 2013

Legal topics

• Price comparisons & Comparative Advertising

• Google AdWords in advertising

Price Comparison Advertisements

What we are going to look at today

• Price comparisons

– The position under the old rules

– The rationale behind the change

– What the new rules say

– What the new rules mean for you

The position under the old rules

• Old CAP Code rules stated that when comparing prices with that of a competitor, comparisons were only allowed between:-

“identical or substantially equivalent” products

Price comparison example 1

£0.68 £0.68

£0.32 £0.68

£0.32 £0.45

The rationale for change

• Committee of Advertising Practice (CAP) and the Broadcast Committee of Advertising Practice (BCAP) are of the view that:-

– the old rules restricted certain price comparisons that would be of benefit to consumers; and

– the old rules went beyond the minimum requirements of the EU Comparative Advertising Directive (2006/114/EC).

• Industry committees are of the view that it would be useful for a consumer to know the price of an own brand label against that of a premium label

EU Comparative Advertising Directive

Article 4

Comparative advertising must:-

• not be misleading; • compare goods or services that meet the same needs or

intended purpose; and• objectively compare one or more verifiable feature

(e.g. the price).

EU Comparative Advertising Directive and CAP Code Rules

EU Comparative Advertising Directive

Old CAP Code requirement

Article 4Comparative advertising must:-•not be misleading; •compare goods or services that meet the same needs or intended purpose; and•objectively compare one or more verifiable feature (e.g. the price).

Additional Requirement

What the new rules allow

Comparative advertising

“must compare products meeting the same need or intended for the same purpose.” (Rule 3.34 CAP Code)

Price comparison example 1 revisited

£0.68 £0.68

£0.32 £0.68

£0.32 £0.45

Basis of the comparison must be clear

“Marketing communications that include a price comparison must make the basis of the comparison clear.” (Rule 3.39 CAP Code)

Price comparison: how much information?

£2.99£2.98

Price comparison: how much information – technical products

SAMSUNG

Price comparison: how much information – technical products

Advertisements: objective comparison

• They must objectively compare one or more material, relevant, verifiable and representative feature of those products, which may include price. (Rule 3.35 CAP Code)

What these rules changes might mean

• Headlines such as these:-

• “Sainsbury's reprimanded after Asda complaint” – retailweek.co.uk 23 May 2012

• “Tesco censured by watchdog over "misleading" Price Check ad” – retailweek.co.uk 16 November 2011

http://youtu.be/_uBo4esCZvE

The implications for you

• Consider that every day low price advertisements are currently in favour.

The implications for you

• Where is the balance in providing information to make the “basis of the comparison clear”?

• Will competitors be more likely to make a complaint to the Advertising Standards Authority?

Google AdWords

Google AdWords – what are they?

• Google AdWords is Google's main advertising product

• Searches on Google using keywords appear as adverts next to the search results

• Businesses obtain a higher placing / prominence by bidding for AdWords

• Advertisers pay every time a users click on its sponsored link and get directed to their website

Google AdWords example 1

Search “flowers”

Trade marks on Google AdWords

Google and others v Louis Vuitton and others

(Google France Case)

• Louis Vuitton sued Google France for allowing advertisers to use their trade marks as Google AdWords

• Argued brand owners’ trade mark rights infringed by allowing to buy the Google AdWord “keywords” corresponding to registered trade marks

Google France Case

• Court held that Google’s use of its AdWords tool does not infringe brand owners’ trade mark rights

However...

• Google and other search engine providers must act quickly to remove advertisements which infringe third party trade marks as soon as they become aware of them

Is it Google’s Problem?

• Advertisers buying trade marks in AdWords may be liable for trade mark infringement

- The European Court of Justice

• Advertisers cannot arrange for Google to display advertisements whereby customers cannot easily establish who the goods or services in the advertisement originate from (the trade mark owner or the advertiser/third party)

Google AdWords example 2

Search “interflora”

Interflora v Marks & Spencer

• Interflora – the world’s largest flower delivery network

• Owns trade mark for INTERFLORA

• M&S – selling flowers online in direct competition

• Interflora and M&S argument began in 2008 when M&S bought the AdWords for Interflora’s trade mark

• Interflora suing for trade mark infringement

Interflora v Marks & Spencer – the test

• Trade mark owners entitled to prevent a competitor from bidding for Google AdWords identical to their mark where use liable to have an adverse effect on functions of the mark

• Also entitled to prevent competitor from advertising on the basis of keyword corresponding to the mark where unfair advantage of its distinctive character taken

Interflora v Marks & Spencer – the test

• Adverts cannot be prevented where AdWords based on trade mark but put forward alternative goods or services (but not imitations)

• Trade mark’s functions must not be adversely affected by such adverts

• ECJ referred the decision back to the UK courts – each case to be decided on its own merits

• UK courts to decide whether the function of the trade mark has been adversely affected

• Meanwhile, a recent decision has held that witness evidence obtained by Interflora in the form of surveys cannot be relied on

• The law is changing...

• To be determined at

the Court of Appeal within the

next few weeks

Google Policy

“If a trademark owner files a complaint with Google about the use of their trademark in AdWords ads, Google will investigate and may enforce certain restrictions on the use of that trademark in AdWords ads and as keywords”

- Google’s AdWords Trademark Policy

Google Policy

“Google will investigate and may restrict the use of a trademark within ad text. Ads using restricted trademarks in their ad text may not be allowed to run”

Google Policy

“Advertisers can use a trademarked term within ad text if they are authorised, meaning that the trademark owner sent Google the necessary form allowing an advertiser's particular account to use a certain term”

Google Policy

“There are some cases when the policy for ad text doesn't apply, for example, campaigns targeting the United

States, Canada, the United Kingdom or Ireland may use a trademark in ad text if the ad is in compliance with resellers (primarily dedicated to selling the goods or

services corresponding to a trademark term) and informational sites policy (the primary purpose of the ad's

landing page is to provide informative details about goods or services corresponding to the trademark term).”

Google’s EU and EFTA Policy?

Google’s EU and EFTA Policy

• Same rules apply - Google does not prevent trade marks from being used as keywords in the EU and EFTA, but...

• Google carries out only a “limited investigation” as to whether trade mark used with particular ad text is confusing as to the origin of the advertised goods and services

• Where keyword combined with ad text is confusing, ads will be disapproved so they cannot run

Questions?

Combining the experience, resources and international reachof McGrigors and Pinsent Masons

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members of the LLP, and of those non-members who are designated as partners, is displayed at the LLP’s registered office: 30 Crown Place, London EC2A 4ES, United Kingdom. We use ‘Pinsent Masons’ to refer to Pinsent Masons LLP and affiliated entities that practise under the name ‘Pinsent Masons’ or a name that incorporates those words. Reference to ‘Pinsent Masons’ is to Pinsent Masons LLP and/or one or more of those

affiliated entities as the context requires. © Pinsent Masons LLP 2013

For a full list of our locations around the globe please visit our websites:

www.pinsentmasons.com www.Out-Law.com

EU Draft Data Protection Regulation - key points

DMA North Leeds April 15th 2013

Caroline Roberts Director of Public Affairs Direct Marketing Association

IntroductionIntroduction

Why now?

What is being proposed and why is it important?

The EU decision-making process

Timing

DMA and FEDMA lobbying activity

Why now?Why now?1995 European Directive (implemented into UK by

1998 Data Protection Act) showing its age…

1) New technologies and more complex information networks

2) Lack of common European law and differences in national implementation

3) Consumer concern over privacy

4) Data protection now fundamental right under EU Charter of Fundamental Rights

Headline proposed changes

• Expanded definitions: “personal data” and “data subject”

• Explicit consent required• Right to be forgotten• Greater emphasis on accountability• Notification of data security breaches• More onerous sanctions for breach• Data processors directly covered

Consent

Consent: Current Position

Consent: Proposed Position

- Freely given, specific, informed indication of the data subject’s wishes

- Explicit consent required for sensitive personal data only

-Freely given, specific, informed and explicit indication of data subject’s wishes

-Given either by a statement or a clear affirmative action

- Data controller / data subject relationship to be taken into account

- Burden of proof on controller to demonstrate consent

Key points in the draft RegulationIP addresses and cookies

• Definition of personal data extended so could cover some IP addresses and cookies as “online identifiers”

• But IP addresses identify a device not an individual + some IPs are general

• Huge implications for digital marketers

• Web analytics & profiling made much more difficult, if not impossible

• Interaction with new cookie rules problematic

Key points in the draft RegulationThe right to be forgotten

• Right for individuals to request organisations to delete any information held on them

• Drafted with social media in mind – but goes beyond this

• Problem of information that has already been passed on to third parties

• Possibility of misleading consumers by raising unrealistic expectations

• Suppression files

• Changes to current text likely

Key points in the draft RegulationData Breach notification

• Any data security breach to be notified to ICO and the individuals concerned within 24 hours

• Report to cover:• nature of breach• number of data subjects• categories of data• proposed mitigation

• Not always obvious if there has been a breach or how extensive it is

• Problem of notification fatigue

• No threshold level specified

Key points in the draft Regulation Subject Access Requests(SARs)

• Data subjects to be able to request full information on data held on them free of any charge

• Currently can levy a £10 fee – doesn’t cover cost but deters time-wasters, frivolous or vexatious requests

• Costs organisations £50 million p.a. now to meet SARs

• Proposal that can provide data in electronic form if data subject agrees to this

• Particular problem for financial services with mis-selling issues and claims management firms

Key points in the draft RegulationCompliance obligations

• Data protection obligations now shared between agencies and clients, for example if holding client’s database

• Privacy by Design/Privacy by Default

• Appointment of DP officer (250+ employees)• 2 year appointment• Independent reporting to board• Information and training • Maintenance of documentation• Data protection impact reports

• International transfers of data outside EEA – law would apply to any processing of data or EU citizens

Proposed enhanced sanctions

• Up to €500k or 1% annual worldwide turnover intentional or negligent failure to respond to subject access requests in accordance with Regulation

• Up to €1m or 2% of annual worldwide turnover for other compliance failures

• Depends on:-• size of organisation involved

• nature and gravity of breach

• whether intentional or negligent

• technical and organisational measures

• previous breaches

• co-operation with ICO

Key Points in the draft RegulationDelegated Acts

• Many details to be implemented through additional delegated legislation – some 45 Delegated Acts mentioned.

• Details will not be clear until Regulation is passed• These areas of secondary legislation will include:

• powers to specify further procedures• technical standards for Privacy by Design/Default• specification of lawful processing condition• additional responsibilities for national data

protection authorities; etc. • European Commission taking significant powers to itself

away from the national authorities - raises serious issues of subsidiarity and accountability

• National governments and Data Protection Authorities are concerned

Draft Regulation - DMA View

• DMA welcomes the Commission’s aim to reduce red tape and simplify bureaucracy – but proposals do not achieve that: overly strict, bureaucratic and unworkable

• Needs to be a fair balance between privacy and legitimate business interests

• Current proposals will stifle innovation, add considerably to business costs and place unnecessary obstacles to e-commerce jobs growth

• Will be particularly harmful to SMEs – MoJ says demonstrating compliance will cost £10m p.a.

• Hard to say how Commission’s estimate of 2.3 billion euro saving to businesses was calculated

Impact on direct marketingImpact on direct marketing

•Potential opt-in for all communication channels – the end of dm as we know it?

•Potential ban of profiling – less targeted and more generic communication?

•Potential ban on list trading and lead generation

•New information requirements and rights of the data subject, e.g Right to be Forgotten

•Increased costs - £76,000 per business to comply + possible £47 billion of lost sales in UK

FEDERATION OF EUROPEAN DIRECT AND INTERACTIVE MARKETING

Codecision

Proposes Legislation

Adoption

Into National Law

The process of EU decision-makingThe process of EU decision-making

Current position – European Parliament

• Civil Liberties Committee (LIBE) taking lead – Rapporteur: Jan Philipp Albrecht MEP (German Green)

• His report published 9th January – in parts even tougher than Commission proposals

• 4 other Committees giving Opinions – 3000+ amendments tabled

• Vote to be taken in LIBE end of May

Timing in the EU institutionsTiming in the EU institutions

•Commission proposal for a Regulation in January 2012

• Parliamentary lead committee draft report: 9 Jan 2013

•Deadline for tabling amendments: 27 Feb 2013

• Vote in leading committee: 29/30 May 2013

•Trilogue with Council: Autumn 2013

•Expected plenary vote (1st reading): End 2013

•Takes effect: 2 years after adoption – 2016?

Current position Current position – Council– Council of Ministersof Ministers

• Council of Ministers Working Group (DAPIX) meeting monthly

• Initial indications that UK Government (and others) taking helpful and business-friendly stance

• Many object to delegated acts; find it too prescriptive and would prefer a more principles- based approach

• UK pushing for a directive, rather than a regulation – as is Germany

Current position Current position - Commission- Commission

• 4th Dec 2012 – Commissioner Viviane Reding spoke in European Parliament

• Said Commission willing to look at: • More risk-based approach with focus on

type of data being processed

• Less prescription – although no detail

• Some exemptions for SMEs?

• Overall principles must be same for both public and private sectors

• Delegated and implementing acts –self-regulation perhaps for some?

Ministry of JusticeMinistry of Justice

• Disagrees with Commission’s 2.3bn Euro savings – burdens imposed will far outweigh net benefits: in UK cost @ £100-360 million

• Many unintended consequences, esp for SMEs • Changes to consent, profiling & definition of personal

data particularly costly to industry • Likely knock-on effects for growth in technological sector

and internet economy• Regulatory Impact Assessment quotes DMA’s figures &

examples• Impact on behavioural advertising• Creates unrealistic expectations for consumers – R2BF

proposal is “unworkable”

Key lobbying messages • Data is essential for economic growth

• UK has leading role in EU digital economy• SMEs particularly affected

• Transparent and responsible use of data is a vital business practice

• In industry’s interests to handle data with care• Self-regulation has valid role to play• Regulation will not stop bad players

• The proposed regulation is bad for consumers• Would damage users’ online experience • Danger of tick-box culture & unrealistic expectations

• Need a proportionate data regime that recognises that not all data is the same

• Personal data, sensitive data, anonymous/pseudonymous data • Different levels of protection required

Lobbying activity – in BrusselsLobbying activity – in Brussels

• Meetings in Brussels with key individuals in Council, Commission & Parliament, e.g. Council Working Group; key MEPs & advisers; party groups

• DMA working with FEDMA & other alliances – for collective lobbying of Council and Parliament & lobbying directly where there is no national DMA

• FEDMA position papers on priorities for industry + draft amendments to text

• Data Industry Platform & Industry Coalition on Data Protection - collective lobbying

Lobbying activity – in UKLobbying activity – in UK

• Contact with key UK MEPs

• Leading UK Data Industry Group response to the proposed legislation & participating in CBI lobbying

• Research on consumer attitudes to privacy and on economic value of the dm industry

• Lobby UK political leaders to influence their MEPs in EU Parliament

• Providing DMA members with toolkit for lobbying MEPs

DMA lobbying toolkit

Contact

Caroline Roberts

Director of Public Affairs

Direct Marketing Association

caroline.roberts@dma.org.uk

020 7291 3346

Coffee break…

The next session starts at 10.55am

DMA North Legal Update

How the new Regulation will affect businesses

Monday 15 April 2013

James Milligan

DMA Solicitor

Introduction

• What it could mean for you• Key proposals – what you should be doing

now to prepare • Summary

What could it mean for you?

Telemarketing

• Move from opt-out to opt-in

• No cold calling to prospective customers

• No profiling or segmentation without individual consumer's consent

Data industry

• Most current activities will become heavily restricted

• Data will become impractical and expensive both to source and keep up-to-date

• Legacy data might be required to comply with new regulation, prospect lists could be decimated

• List broking severely restricted

Online marketing

• Analytics impossible as no tracking of IP addresses

• Profiling is very limited without the explicit consent of the consumer

• Tailored online experiences will require explicit consent

• Ads can no longer be targeted to individuals

• Data can no longer be used to target future marketing activity

• Debate over whether legacy data will have to comply with the new rules

Direct mail

• Move from opt-out to opt-in: explicit consent needed to send any message to any recipient, with the exception of existing customers

• Existing databases may not be usable under regulation: could decimate prospect lists

• Demographic information will have to be wiped

Email marketing

• No tracking data allowed without explicit consent, making effectiveness extremely difficult and unreliable to measure

• Profiling and segmentation will become difficult and patchy

• Tailored content will be hard to target and harder still to measure

Introduction of opt-in/explicit consent

• Review language used at point of data collection to ensure that consent is explicit /opt-in

• Consent – freely given, specific informed and explicit

• Do people understand what they are agreeing to? – nation of liars

• Think about how you will update legacy databases

• Children – consent wording for under 13’s if offering them an information society service

Definition of personal data

• Think about how you will deal with extension to Include location data, IP addresses, cookies, online identifiers

• Pseudonymous/annonymous data – will you be able to take advantage of exceptions?

Individual Rights and Remedies

• New Regulation may lead to increased public awareness of rights e.g., right to request information ( Data Subject Access Requests, Right to be forgotten)

• Plan ahead for increase in queries from clients/public

• Training for client/customer service teams

• Amend wording on privacy policies/data collection notices to take account of new rules on profiling.

Data security breach notification

• Introduce breach notification detection procedures

• Think about how you will notify data protection authorities and affected individuals within whatever timescale is agreed

• Develop/review your data breach response plan

Compliance obligations

• Review amount of data being processed, erasure policies and data retention policies

• Requirement to demonstrate compliance will mean more documentation in respect of policies and procedures

• Contact centres, mailing houses, email/SMS broadcasters will also be subject to these new obligations, especially in respect of data security

• Review staff training in data protection.• Appointment of a data protection officer?• Risk- based approach to compliance and data

protection impact assessments

Enhanced sanctions/fines

• Watch out if you get it wrong!

• Increase focus on compliance – board level issue

• Review internal policies and procedures

Scope of the Draft regulation

• Main establishment/ one- stop shop provisions

• Think about which country’s national data protection authority will be lead regulator

• Possibility of changing country where head office is located

• Review arrangements for transfers of data outside EEA (27 Member States of EU + Iceland ,Liechtenstein, Norway)

• Global group – application to EU citizens’ personal data.

Summary

• Start preparing now• Transparency and consumer trust and

confidence • Review policies and procedures• Talk to your clients/suppliers in the data

chain• Talk to the DMA

Contact

James Milligan

Solicitor

james.milligan@dma.org.uk

legaladvice@dma.org.uk

020 7291 3347

020 7291 3360 – Legal and Compliance Helpline

DMA North Leeds – Monday, 15th April 2013

Data Protection round-up and other key issues

Caroline Roberts Director of Public Affairs

James Milligan Solicitor

Information Commissioner’s Office

• March 2013 – ICO fines company £90,000 for making nuisance calls

• February 2013 – ICO fines Nursing & Midwifery Council £150,000 for breaching data protection rules

• January 2013 - ICO fines Sony £250,000 for breaching data protection rules

Excuses – they just don’t wash…

• “I won’t get caught by the ICO”

• “The ICO never does anything even if people do get caught”

• “Getting caught won’t affect my business”

Really?

Excuses – they just don’t wash…

Really?

Excuses 101

Really?

• ICO Strategy Plan 2013-16

• New website• Modernise ICO notification system• Simplify guidance • Policy challenges• Strategic review

Information Commissioner’s Office

• Notice about collection of behaviour on website if using OBA

• Notice about collection of behaviour around each online advertisement delivered using OBA

• Not create interest segments for targeting OBA to children under 12

• Explicit consent for OBA at Internet Service Provider (ISP) level

• Exemptions• Enforcement

New CAP rules for online behavioural advertising (OBA)

Financial Services

• Re-architecture of financial services regulatory environment - replacement of FSA by Financial Conduct Authority and Prudential Regulatory Authority from 1 April 2013

• Greater focus on consumer protection and how services and products are marketed and sold

• New power to ban products and services• New power to ban misleading financial promotions

• Consumer credit• OFT Payday Lending Report • Consultation on move of consumer credit regulation

to Financial Conduct Authority from OFT

Financial Services

• Mortgage Market Review • Simple Financial Products Sergeant Review .

Other issues on legislative agenda

• Consumer Protection • Consumer Rights Bill• Implementation of the EU Consumer Rights Directive • EU Commission review of Unfair Commercial Practices

Directive

• Electoral register• Electoral Registration & Administration Bill –

introduction of individual electoral registration and system opened up for digital application.

• Edited version of register will be kept but issue on opt-outs.

• Postal• Policy of “reversions” of mail not meeting product

specification – Royal Mail have announced that they will not charge reversions in respect of envelope sealing issues until 1 April 2013 following DMA lobbying activity

• Employment • TUPE – Government consultation on changes

Other legislative issues

• Environment • Unaddressed mail preference service - awaiting

DEFRA input• Telemarketing

• Claims management, nuisance calls – DMA has formed Working Party with regulators, mobile network operators, consumers.

• Contact Centres guidance on vulnerable consumers

• Marketing to children• Government “stock-taking” progress after Bailey

Report• Alcohol strategy

• Minimum pricing; plain packaging

Any Questions?

james.milligan@dma.org.uk caroline.roberts@dma.org.uk

020 7291 3347 020 7291 3346

DMA members can contact DMA Legal Department for free advice:

by email: legaladvice@dma.org.uk

or call: 020 7291 3360

Thank you…

Presentations will be emailed to you Monday

A final thank you to all of today’s speakers:

Rupert Brent, Pinsent Masons

Caroline Roberts, DMA

James Milligan, DMA

Please return your completed evaluation forms and badges to the registration desk we look forward to

seeing you again!

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