Ads & Brands Law Digest: December 2020/January 2021

Brexit

Christmas Eve Trade and Cooperation Agreement reached between the UK and the EU

After many weeks and months of ups and downs in the Brexit trade negotiations, a trade and cooperation agreement was reached between the UK and the EU on Christmas Eve. There are chapters on goods, services, digital trade and the agreement also extends the transition period relating to personal data transfers by an initial four months. The agreement has applied provisionally since the end of the transition period at 11.00 pm (UK time) on 31 December 2020 as the European Parliament must ratify the agreement before it takes full effect. It has been ratified in the UK by the European Union (Future Relationship) Act 2020.

Among other things, the agreement seeks to facilitate digital trade, address unjustified barriers to trade enabled by electronic means and to ensure an open, secure and trustworthy online environment for businesses and consumers. It includes prohibitions on requirements for the localisation of data and the imposition of customs duties on electronic transmissions, as well as commitments to ensure that contracts may be concluded by electronic means and that electronic documents and electronic signatures should have legal effect.

For more information see here.

Impact of the UK-EU Trade Agreement upon IP

The agreement, although it contains a 24-page section confirming the general standards of intellectual property protection to be applied by both parties, really said very little of immediate importance for businesses to be concerned with. There have been some big changes in the IP field resulting from the end of the Brexit transition period on 31st December, but they all flow instead from the Withdrawal Agreement reached between the UK government and the EU at the end of 2019, which remains in force. These changes are analysed in detail in our Brexit - IP Overview and Brexit – Your IP Questions Answered (for Registered Trade Mark and Design Owners).

For more information, read more here.

Advertising and Marketing 

UK government launches consultation on HFSS promotions

On 28 December 2020, the UK government quietly issued another consultation around the promotion of foods high in fat, sugar or salt. The consultation proposes extending the ban on promotions online from April 2022.

This would mean that website operators would not be permitted to promote HFSS products in certain locations online, including on an entry page, while a consumer is searching for or browsing products other than HFSS foods, on a pop-up or similar page, or a checkout page.

The consultation asks if a fine of £2500 would be appropriate and closes on 22 February 2021.

For more information see here.

CAP issues guidance on age-restricted ads

CAP has issued guidance on targeting age-restricted ads appropriately online. The CAP Code contains media placement restrictions for ads for, eg, HFSS foods, gambling, alcohol and e-cigarettes.

The guidance is for marketers using online media, especially for programmatic ads, paid-for ads and organic content appearing on social media and video-sharing platforms. It should also be used by affiliates and influencers and may be helpful in other areas too, such as advertising video games.

The guidance aims to help marketers demonstrate that they have taken appropriate steps to avoid targeting ads to the wrong age groups, and calls for marketers to embed the requirements in their compliance processes. It provides guidance on specific scenarios such as media for children and young people, targeting paid-for and programmatic ads, and limiting exposure to organic marketing communications.

For more information, see here.

ASA upholds complaint about negative reviews being removed from website

The ASA has upheld a complaint that negative reviews were removed from a website. The website owner claimed they only removed reviews that did not meet their moderation policy.

However, the ASA understood that the complainant’s review had been removed despite being relevant; and despite the fact that it did not include false claims or foul language.

It told the website owners to ensure that genuine product reviews were not removed from their advertising unless it was for reasons consistent with a reasonable moderation policy.

For more information, see here.

CAP and BCAP update rules on alcohol

The CAP and BCAP Codes have been updated with minor amendments to the Alcohol rules. These amendments clarify the language used to describe the ABV thresholds at which drinks are subject to the alcohol rules and what strength a ‘low alcohol’ drink is considered to be.

Some text from the ‘definitions’ preface to the Alcohol section has been moved into CAP rule 18.9 (BCAP rule 19.10) to aid clarity of understanding.

For more information, see here.

Regulatory

CMA continues to take a tough stance on the 'loyalty penalty'

The Competition and Markets Authority has published an update on its work to prevent the “loyalty penalty” that many consumers still face if they do not shop around in five key sectors, namely mobile, broadband, cash savings, home insurance and mortgages. The CMA set out a package of reforms some time ago and is now also focusing on anti-virus software products and online gaming subscriptions.

The CMA highlights that the pandemic continues to have significant adverse effects both for consumers and businesses, not least as the five markets reviewed provide essential services, that are in many ways now even more critical to people’s lives. Many consumers are facing extra financial pressures so the CMA is even more concerned.

For more information, see here.

European Commission issues proposals for Digital Markets and Digital Services Acts

The European Commission has issued proposals for a Digital Markets Act and a Digital Services Act.

Broadly speaking, the measures are designed to (1) better protect the rights of users of digital services, and (2) create a more competitive online environment in digital markets. A closer look reveals that both laws draw heavily on principles of fairness, transparency and accountability that will be familiar to those with experience of European data protection law. These principles are coupled with a focus on giving greater control to the user (not just over the use of their data, but also over a far wider remit of online engagement such as content and content moderation).

The proposed legislation will affect current online advertising practices. The DSA in particular contains comprehensive rules about online advertising, including targeting advertising, whilst the DMA specifically lists advertising services in its definition of a ‘core platform service’ (providers of core platform services have the potential to qualify as ‘gatekeepers’ under the DMA).

For more information, see here.

European Commission to revise vertical agreements block exemption Regulation 330/2010 and verticals guidelines

The Vertical Agreements Block Exemption Regulation 330/2010 (VBER) expires on 31 May 2022. The market has changed significantly since the adoption of the VBER and the Guidelines in 2010, especially because of the growth of online sales and of new market players like online platforms. This has resulted in some changes in distribution models, for example, more direct sales by suppliers and more use of selective distribution systems. In addition, new types of vertical restrictions, for example those on sales through online marketplaces and restrictions on online advertising, as well as retail parity clauses, have become more common.

The European Commission is therefore consulting on the Regulation's replacement. The consultation ends on 26 March 2020.

For more information, see here.

Intellectual Property

Copyright works – do you need to look out for “hidden” joint authors when acquiring rights?

The IP & Enterprise Court has recently confirmed that an opera singer – Ms K - who contributed important and specific ideas regarding the overall concept, plot and characterisation of a film screenplay, was entitled to be treated as joint author of the resulting screenplay even though her partner at the time - a professional writer, Mr M – contributed the lion’s share of the content and was the one who “held the pen” in terms of typing up the various drafts. Mr M had subsequently claimed full ownership of the screenplay, and the film companies had dealt with him as such in producing the film (Florence Foster Jenkins starring Meryl Streep and Hugh Grant). But the Court has now judged Ms K to be 20% owner of joint copyright in the screenplay: the film companies will have to pay this share to her of any future royalties, while Ms K will be seeking compensation from Mr M for her fair share of the royalties already paid.

There has been some concern that this ruling could “open the floodgates” for claims by other contributors to creative copyright works (past or future) where they have made a contribution to the creative process that has gone unrecognised. The judge in the case rejected this notion, saying that he was merely making a judgment about the specific facts rather than establishing a new copyright principle. It is must be said, however, that this case has clarified for the first time that the joint ownership of a copyright work can be in unequal shares (such as 80:20), and this in itself might serve to encourage more unacknowledged contributors to stake a claim in future. Businesses should thus consider how best to manage this risk – in the judge’s words, by “dealing with [creatives] with a good reputation, by making appropriate enquiries, by taking appropriate warranties and indemnities, and by acting responsibly if a problem arises.”

For more information, read more here.