The curious case of the newspaper exception in the Consumer Rights Directive

Any lawyer who works in the e-commerce space will no doubt have been busy over the past few weeks advising businesses on the new rules under the Consumer Rights Directive which applies, amongst other things, to all B2C contracts made at a “distance” (e.g. online or over the phone etc).

The new rules, amongst other things, amend consumers’ cancellation rights for distance contracts. In particular, provided certain conditions are satisfied, consumers will now have a 14 day period (it was previously 7 days), in order to change their mind, return the goods, and receive a refund.

Under Article 6(3) of the old Distance Selling Directive which the Consumer Rights Directive replaced (Reg 13(1)(e) of the old Distance Selling Regs in the UK), there was an exception from the consumer’s right to cancel “for the supply of newspaper, periodicals, or magazines”. This exception made obvious sense given that the value of these types of publications is limited in time (in the case of a newspaper – generally only one day). Therefore, it would be unreasonable for a consumer to be able to cancel and return such goods after a few days and get a refund etc.

However, under Article 16(j) of the Consumer Rights Directive (Reg 28(1)(f) of the Consumer Contracts Regs in the UK), the exception now applies to “the supply of a newspaper, periodical, or magazine with the exception of subscription contracts for the supply of such publications”.

A plain reading of the above seems to imply that (a) the cancellation/refund rights do not apply to the supply of a newspaper, periodical, or magazine, but (b) the cancellation rights do apply to the supply of a newspaper, periodical, or magazine if such supply is made pursuant to a subscription contract.

If the above is correct – this seems totally crazy to me because it means that a consumer who purchases a print newspaper as part of a subscription taken out online (or over the phone etc), can now cancel within the 14 day period, return potentially up to two weeks worth of old newspapers and receive a refund for them! What is the publisher supposed to do with two weeks worth of out of date newspapers?!

There is nothing on this point in the UK BIS Guidance, nor is there anything on this in the (very long) Commission Guidance.

I contacted someone at Trading Standards about this and here’s an extract of what I got back:

…my reading of the legislation is that a consumer has the right to cancel a distance or off-premises contract which is a subscription to a newspaper by virtue of Reg 29(b). The consumer may cancel the contract at any time within the cancellation period without incurring any liability except where the value of goods is diminished by consumer handling beyond what is necessary to establish the nature, characteristics and functioning of the goods [Regs 29(c) and 34(9)]. The meaning of this is elaborated in Reg 34(12) where it indicates that this would be equivalent to “beyond the sort of handling that may reasonably be allowed in a shop”. I take this to mean that in the event that the newspaper(s) received before cancellation are returned in pristine condition he could expect a refund but if he has read them through and done the Su Doku probably not…

Not much help from Trading Standards, so I decided to go to BIS. Here’s an extract from what I got back from someone at BIS:

…the regulations (which copy out the Consumer Rights Directive) do not specifically state that, in the case of cancellation of a subscription, a newspaper already delivered must be returned or that it cannot be returned. Although the regulations seek to ensure that where cancellation rights apply, the consumer’s liability is limited, and goods should be able to be returned with minimum penalty, at the same time, as you point out, one-off supply of publications are not subject to cancellation (because presumably the buyer can read and send back)… You will want to take your own view on what the courts might say in the light of the wording of the regulations but if you did settle on [the interpretation that the newspapers can be returned] then the rules around return of goods are likely to apply which means that the consumer (provided they have been told about the costs) would have to pay for the return of the publication and, if it looked used, there could be a deduction  for diminished value from any refund.

Not much help from BIS either. I tried to see if there was any discussion of this during the legislative process. There doesn’t seem to be much / anything of use (unless there’s something buried amongst the debates which I haven’t been able to find).

There’s a brief reference to the exception in a 2009 Committee of the Regions report, but nothing of any substance.

The exception was also briefly referred to in the list of proposed amendments published by the Committee on the Internal Market and Consumer Protection in October 2010. Buried deep in this 224 page document is one reference on page 158 to the exception being justified because:

Consumer [sic] should have a possibility to withdraw from the subscription contract. Full harmonization.

No other explanation was included. In particular there was no consideration of the bizarre practical implication of the reworded exception meaning that a consumer could in theory return almost 2 weeks of newspapers back to a publisher and receive a refund.

In its 2011 opinion on the proposed Directive, the Committee on Legal Affairs briefly justified the amended exception as follows:

One of the objectives of the revision of the Consumer Acquis under civil law within the EU, the development and strengthening of consumer protection, also requires the critical analysis and reduction of the myriad of exceptions from the right of withdrawal… these exceptions are always cited in practice as an argument against a right of withdrawal of the consumer and are therefore to their disadvantage.

It’s true that the exceptions disadvantage consumers in as much as they are exceptions to the right of withdrawal. However, the whole point of having the exceptions is that, quoting directly from Recital 49 of the Consumer Rights Directive: “…a right of withdrawal could be inappropriate for example given the nature of particular goods or services“.

In addition to the above, there are of course pages and pages of European Parliamentary debates on the Directive. However, as far as I can see, whilst there are plenty of statements around the importance of maximising consumer protection, there are no considerations around the practical implications of narrowing the well established newspaper exception.

My view is that the amendment to the exception is probably a failure by the legislature (whilst attempting legitimately to increase consumer protection) to fully appreciate the actual practical implications that the addition of a few words to a statutory exception can have.

Advertisements

New book on Advertising Law!

Some may think the greatest book ever written is War and Peace, others may think it’s the Great Gatsby… However, they’re wrong because the greatest book of all time is clearly “International Advertising Law: A Practical Global Guide” which was published yesterday by Globe Law & Business.

I helped edit the book and write the UK chapter. The book contains chapters drafted by lawyers from over 30 countries (so there was a lot of editing to do). I haven’t written a blog post in a good few months as I’ve been very busy at work, so apologies that this one is really just a shameless plug.

As many readers of this blog will know, advertising law and regulation is found in a wide variety of sources and overlaps with a diverse range of other areas of law. This made the selection of a finite number of topics to cover in the book a difficult task. When we decided which topics to cover, we considered the questions that in-house advertising and marketing lawyers (and non-lawyers) are likely to encounter most frequently in their day-to-day work, but we also kept private practice lawyers in mind.

Each chapter is written by an expert in the relevant country and begins with an overview of the legal and regulatory regime for advertising in that country, before providing more detail on the following seven topics: (i) comparative advertising; (ii) online behavioural advertising; (iii) sales promotions; (iv) ambush marketing; (v) direct marketing; (vi) product placement; and (vii) certain industry-specific regulation (which includes consideration of the regulation of advertisements for gambling, alcohol, pharmaceuticals, financial products and services, food and tobacco).

More detail about the book can be found on the Globe Law site here. It’s also available on Amazon and all good bookshops (provided they sell legal text books).

Enjoy!

2014 Sporting events, social media and UGC

The three big ones this year are of course the Winter Olympics in Sochi (about to come to an end), the Commonwealth Games in Glasgow (23 July – 3 August) and of course the World Cup in Brazil (12 June – 13 July).

I went with some colleagues recently to give a training session to a news organisation about the various news and reporting restrictions and regulations associated with covering these sporting events – in particular the guidelines for “accredited persons” and the news access rules for the accredited media etc.

However, one interesting issue that came up was UGC – i.e. what happens when it’s consumers who are doing the “reporting” as opposed to the accredited media or other accredited persons (such as athletes or coaches etc). As part of my investigation into that point, I came across the ticket purchase T&Cs for each event.

 The ticket purchase T&Cs for Sochi are located here (“Terms and Conditions” link at the bottom). Rule 17.2 of the T&Cs states the following:

…Images, videos and sound recordings of the Games taken by a spectator cannot be used for any purpose other than for private, personal, archival, non-commercial purposes i.e the Spectator may not license, broadcast or publish video and/or sound recordings, including on social networking websites and the internet more generally, and may not exploit images, video and/or sound recordings for commercial purposes under any circumstances, whether on the internet or otherwise, or make them available to third parties.

Fair enough and not particularly surprising, members of the public aren’t allowed to sell photos, video or audio of the Games, and they’re not allowed to upload video or audio of the Games onto social media at all (although it would seem photos are fine).

The ticket purchase T&Cs for Glasgow are located here. They contain a similar restriction to Sochi, Rule 18.1 states the following:

Images, videos and audio recordings taken or made by you in Games venues… may not be used for any purpose other than for personal and non-commercial purposes. You may not sell, license, broadcast (including on social media sites), publish, or commercially exploit in any manner such images, videos or audio recordings, unless expressly authorised by us.

However, have a look at the equivalent rule in the FIFA ticket purchase T&Cs here. Rule 5.2 states the following (my emphasis added):

Ticket Holders may not record or transmit any sound, moving or still image or description of the Match (or any result, data or statistic of the Match) other than for private use. It is strictly forbidden to disseminate any sound, moving or still image, description, data, result or statistic of the Match, in whole or in part, for any sort of public access, irrespective of the transmission form, whether over the internet, radio, television, mobile phone, data accessory or any other current and/or future media (now known or hereinafter invented and/or devised)…

In addition to photos, video and audio, the restriction extends to any “description, data, result or statistic of the Match”… “for any sort of public access…” As far as I can see, this means that if a consumer posts a comment on Facebook or a Tweet saying: “We scored!”, he/she’ll be in breach of the ticket terms and conditions and, strictly speaking, under clause 3.3 of the T&Cs, FIFA have the right to eject him/her from the stadium!

Bonkers.

Second Screen Ad Campaigns – the new frontier for keyword litigation?

Last week I went to the incredibly cool Future TV Advertising Forum and, amongst other things, I saw a demonstration of some prototype systems for running synchronised second screen ad campaigns.

By the “second screen”, broadly speaking, I’m referring to a tablet which someone uses on his/her lap whilst sitting on the sofa watching TV (there’s an interesting debate about whether it’s the tablet or in fact the TV which is now the second screen, but that’s another story).

One particular product by Cisco and Innovid caught my eye. At a high level, it involves a system which picks out various keywords spoken during a programme played on TV which could then be used to trigger relevant and targeted ads to the user on his/her tablet. The system is so sophisticated it can even determine the “context” in which the word is being used to determine whether it’s a “positive” or “negative” mention of the word. For example, if someone on the TV was slagging off a brand, you wouldn’t want that to trigger an ad for that brand on the second screen, whereas if someone was watching a cookery programme, that would be a good opportunity to trigger ads for cooking utensils etc. There’s more detail about the Cisco / Innovid solution in this blog post here.

What is particularly interesting about the system from a legal perspective is that it provides the potential for brands to purchase their competitors’ trade marks as trigger keywords, which, if appearing in the broadcast audio stream could trigger an ad on the tablet.

Anyone who knows a bit about trade mark law will know that if there’s one area which has caused an absurd amount of litigation in Europe, it’s the purchasing of competitors’ keywords in order to trigger sponsored search ads on search engines (the most well known of course being Google’s Adwords service).

If you’re reading this blog you’ll probably know how keyword advertising works. If not, in summary, if you want to advertise a website on Google, you can choose certain keywords which are “related” to your business – see Google’s guide here for how it works. More than one advertiser can purchase the same keywords, so advertisers can bid for how high up the list of sponsored ads they want their link to appear.

The problem therefore arises where a third party trade mark is purchased as a keyword and the third party feels this leads to an unfair advantage being taken from its trade mark. It’s these issues which lead to cases such as Google v Louis Vuitton, L’Oreal v eBay, and most recently Interflora v Marks & Spencer, where the High Court held in May this year that the use by M&S of the keyword “INTERFLORA” to advertise its flower-delivery business on Google was an infringement of Interflora’s trade mark.

The outcome from Interflora appears to be that a trade mark owner will struggle to prevent others from using its trade mark in keyword advertising unless the use somehow causes detriment to the trade mark’s distinctive character or reputation, or makes it difficult to determine whether the advertised goods/services originate from the trade mark owner or a third party etc.

It will be really interesting to see whether the type of synchronised second screen ad campaigns described above could prove to be the next battleground for keyword litigation, taking it from the web, to the TV, to the tablet.

Getting over it: New meanings of privacy

On Thursday last week I spoke at the SCL Policy Forum during the “Social Data” session – my talk was about privacy, social media, young people, social norms, regulation and all that kind of thing. Below is a rough transcript of what I said (including links to references etc):

The reference in the title of this presentation to “Getting over it” comes from a now infamous quote by the then CEO of Sun Microsystems, Scott McNealy, who’s reported to have said in an interview in 1999: “You have zero privacy. Get over it!”. When McNealy said that, I was 19 years old. Mark Zuckerberg was only 15 years old and 5 years away from launching Facebook in 2004.

11 years after that McNealy interview, Mark Zuckerberg was interviewed himself in 2010 and he said the following:

People have really gotten comfortable not only sharing more information and different kinds, but more openly and with more people… that social norm is just something that has evolved over time.”

That quote of his has also become quite famous and led to a flurry of media attention about Facebook’s attitude to privacy. In that same interview, Mark Zuckerberg went on to say:

We [Facebook] view it as our role in the system to constantly be innovating and updating what our system is to reflect what the current social norms are”.

It’s this last sentence of his that I think is particularly interesting because it raises various questions about whether it’s social media which drives the development of social norms relating to privacy, or whether the opposite’s the case, and it’s social norms which drive the direction of social media. In reality, we see a symbiotic relationship whereby they influence and are influenced by each other as well as various other factors which I’ll come onto.

By “social norms”, I’m talking about group-held beliefs or societal conventions which specify how individuals should behave in a given context. As a result they create certain expectations regarding that behaviour. Those expectations become significant from a policy or a regulatory perspective when they get used as the basis for legal tests. A relevant one in this case being the “reasonable expectation of privacy” which the English courts have used as a test in the various Article 8 cases around the “misuse of private information”.

Privacy, however, is a nebulous concept. It’s very difficult to pin down an accepted definition. In the late 19th century, the US lawyers Warren and Brandeis came up with their often quoted description of privacy as the “right to be let alone”. In Europe, Article 8 of the ECHR talks about privacy in terms of a right to respect for private and family life, home and correspondence.

So there are various aspects to privacy and they’re protected in different ways. There’s privacy relating to your property, relating to you physically, relating to your communications, and finally there’s “informational” privacy regarding information which relates to you. In this case I’m broadly focusing on informational privacy and its relationship with social media. Of course one of the ways that relationship is regulated is through data protection law which, as we all know, provides rights to data subjects and imposes obligations on data controllers in the context of the automated processing of personal data.

So what’s so special about social media? One of the things people use social media for is to fulfil the same role as a physical social space. So in the same way as people use a cafe to meet up, socialise and communicate, social media acts as an online social space where users socialise and interact. However, whilst these online social spaces may be used for the same purpose as physical social spaces, there are various fundamental differences which affect certain social norms relating to privacy and create certain risks. These are well documented so I won’t go into much detail.

For example, we all know that when you say something in a physical social space, your words remain only in the memory of the person you spoke to. In online social spaces your words stay there. That continuity becomes problematic from a privacy perspective if you say something you might regret later. Particularly if it’s discovered by, say, a university you’re applying to or an employer you’re interviewing with.

That risk is exacerbated by the fact that anything you say can be so easily copied, altered and re-published on a global scale. The potential exposure increases further because online social spaces allow us to be indexed and easily found.

There’s also the issue of audiences. In physical spaces, you can generally see who’s within earshot and so who can hear what you’re saying. In online social spaces, the potential audience for your communications is invisible and potentially vast, and includes the proprietor of the online social space who’s business model is likely to be predicated on you sharing information publicly.

Whilst users of social media may attempt to control this audience with, for example, a selected “friend list” on Facebook, this can create what’s been referred to as the illusion of intimacy” because the notion of “friends” in an online social space may differ significantly from friendship in a physical social space.

Differing social pressures can also lead to an audience in an online social space taking a different form to that of a physical social space. For example, there aren’t yet well established social conventions regarding the acceptability of rejecting or accepting friend requests on Facebook – so the pressure a user may feel to accept a friend request could lead to a broader audience and the sharing of information with people who aren’t in fact your friends.

A key issue here is that in physical social spaces there are various well established physical social conventions people use as a tool to indicate the degree of privacy or publicity they expect to apply to a particular communication. The volume or tone of my voice for example, or my facial expression, or my body language. The difference with an online social space is that none of these physical social conventions are possible and as a result, in the absence of substitute tools to indicate the user’s intention, communications can end up being more “public” than the user wants or expects.

One of the things the regulatory regime seems to have been trying to do, with varying degrees of success, is place an obligation on the proprietor of an online social space to build functionality which provides equivalent tools to users as a substitute for those missing physical social conventions.

However, there’s an inherent tension in the ease with which that can be done for various reasons. Not only because the service provider’s business model is likely to prefer the public sharing of information, but also because, firstly it puts the onus on the consumer to learn, understand and use those tools, and secondly physical social conventions are nuanced and complex and the effectiveness with which they can be simulated online in a natural way is very difficult.

Before I look at some of these issues further, I want to look at it from a user perspective. It’s particularly interesting when you look at younger social media users. That’s because through the use of social media, I’d suggest that young people understand and value their privacy in a different way to when their parents were young (and social media didn’t exist). There’s evidence of this when you look at young people’s motivations for using social media.

A recurrent theme in relation to privacy is “control”. Some interesting studies conducted by the US Researcher danah boyd [sic] have found that whilst adults think of their “home” as private, it’s a different experience for young people who live at home because they don’t exercise the same control over their personal space as their parents do. Young people may not feel they can control who comes into their house or their room for example. As a result online social spaces, where the young person feels he/she has more control, can feel more “private” than their home. So the increased sharing of information online by young people doesn’t necessarily indicate a disinterest in privacy but rather a search for privacy elsewhere.

A particularly well known piece of ongoing research into young people’s use of social media and their attitudes towards privacy is the research by the Pew and Berkman Centers at Harvard University. In May this year, they published a report in which they found that whilst young people are certainly sharing more personal information on their profiles than in the past, they’re still mindful of their privacy.

Interestingly, the focus groups in that study showed that many of the teens had waning enthusiasm for Facebook because they disliked the increasing adult presence and the excessive sharing by other users but they keep using it because it’s such an important part of their social life – so again it’s not that they don’t care about their privacy, it’s that they feel they need to stay on Facebook in order not to miss out, so the perceived social cost of not being on Facebook outweighs their desire for privacy.

Using Facebook as an example, 60% of teens in the study kept their profiles private. What they refer to as “friend curation” was also an important part of the interviewed teens’ perceived privacy management. For example 74% of them had deleted people from their network or friends list.

A particularly interesting aspect of the study was that it showed that many teen social media users acknowledged that their communications on social media were public and as a result exchanged coded messages that only certain of their friends would understand as a way of creating a different sort of privacy.

It’s easy to keep the focus on Facebook because of its dominance and talks about social media often group all the different services together under the heading “social media”. However it’s important to take other sites and services into consideration and the different meanings that privacy has in relation to them because of their perception, functionality and models.

For example, in the Harvard study (referred to above), while those teens with Facebook profiles most often choose private settings, Twitter users, by contrast, were much more likely to have a public account. The fact that people use Twitter to broadcast their tweets to as many followers as possible means that different expectations relating to privacy may arise compared to, say, updates on Facebook which users may anticipate only sharing with their “friends”.

Different social media services provide people with the opportunity to present different personas or to share different aspects of their identities. What someone chooses to share on Facebook, may be different to what they share on Twitter and different still to what they share on LinkedIn. There’s also the issue of different devices and how social media usage varies on PCs, tablets and of course mobiles – but that’s a whole other talk in itself.

So whilst we have all these different conventions evolving on social media, what role can, should or does regulation play in all of this? I said earlier that one of the things the regulatory regime seems to have been trying to do is place an obligation on service providers to build functionality as a substitute for certain missing physical social conventions. I think the Irish Data Protection Commissioner’s audit of Facebook at the end of 2011 was a good example of this. As part of that audit Facebook’s privacy settings and functionality were examined in great detail and various recommendations were made.

However, as I also said earlier, physical social conventions are nuanced and complex and aside from the fact that a service provider’s business model will prefer the public sharing of information, it’s a massive challenge for an online service to try to emulate the sophistication and nuances of our physical social conventions in a way that consumers will understand and be inclined to use.

As a result, a tension’s created whereby Facebook’s privacy settings got increasingly more complex as they were pressurised to provide more options to users to mirror the granularity with which people understand the privacy of their communications in the physical world. Of course, the more complex the privacy settings get, the more the object’s defeated because the less users understand their options – so the privacy settings then have to become simpler. But of course, when you start to simplify the privacy settings, you then lose the sophisticated and granular way in which people attach different levels of privacy to each of their communications depending on the audience and the context etc.

I think that technology can make progress in resolving that tension, whereby the increasing sophistication of technology allows all the complexities and nuances of physical social conventions to be more naturally and intuitively mapped to social media. However, I think that leads to some important questions that I’d like to leave you with.

Firstly, what should the goal of regulating social media be? Do we actually need regulation to oblige service providers to try to map offline social conventions to the online world or should we just accept that they are fundamentally different?

Also, in this context, who should we actually be trying to regulate? Is it the platform or the users? If it’s the users, do we actually need more regulation? What’s the risk here? Perhaps there may already be sufficient protection from existing laws such as defamation, confidentiality or intellectual property?