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Ads & Brands Law Digest: July 2019

01 July 2019

Welcome to the July 2019 issue of our monthly Ads & Brands Law Digest.

This month’s Digest includes examples of the Competition & Markets Authority and the Advertising Standards Authority taking pro-active steps in priority areas (fake online reviews and gambling advertising respectively). We also feature investigations by the UK and Irish data privacy regulators as they begin to grapple with the complex issue of GDPR compliance in the AdTech sector. Finally, we cover two recent cases from the courts, dealing with bad faith registration of famous marks and the application of passing off to the names of annual award ceremonies.

Advertising & Marketing

CMA launches programme of work to tackle fake and misleading online reviews

The Competition and Markets Authority says that it has found “troubling evidence that there is a thriving marketplace for fake and misleading online reviews”.  It discovered examples on both eBay and Facebook of people selling their services to write fake reviews, and of businesses seeking people to write fake reviews of their products on shopping and review sites.  Such practices are banned under the Consumer Protection from Unfair Trading Regulations (a potentially criminal offence, as well as being subject to civil enforcement by the CMA).  Both eBay and Facebook have acted to remove the particular examples when drawn to their attention, but the CMA has launched a broader programme of work to tackle the issue.  It has asked businesses to supply examples of being offered fake review services.

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ASA rules that the Ts & Cs of a price match offer contradicted the headline claim and were fundamentally unfair

The website for children’s toy retailer Kiddies Kingdom featured a box below product listings stating “See it cheaper? Price match it now + 15% difference.”  The ASA found that customers would rely upon this statement to buy from Kiddies Kingdom in the expectation that they would not end up paying more than they would elsewhere.  But the terms applicable to the offer (set out on a different page of the website) said that the price match would not apply “to items that result in Kiddies Kingdom making a loss to match.” Two complainants had attempted to redeem the offer but been refused based upon this condition. The ASA found this provision to render the offer both misleading and unfair – the result of the condition was contradictory to the headline offer, and there was no way for customers to tell in advance of purchase whether honouring the price promise would result in a loss for Kiddies Kingdom.

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ASA rules that the inclusion of two footballers aged under 25 in a tweeted team line-up that also promoted betting with William Hill was in breach of the Code

A match-day tweet from the Tottenham Hotspur twitter account featured an image of the team’s starting line-up which also included the William Hill logo, text stating “Latest odds from @WilliamHill” and a link to the William Hill website.  As the line-up included two players who were under 25 years of age, the ASA argued that the tweet amounted to an ad for William Hill in breach of the CAP Code Section 16 rules on gambling ads (which prohibit -except in specific circumstance - individuals who are, or seem to be under 25 years old, from “playing a significant role” in such ads).  It was argued in response that the under-25 year old players were not playing a “significant role” as they were not particularly featured as the focus of the tweet, but were simply included as part of a full team of older players. But the ASA disagreed, finding that the two younger players “played an equally significant role in the marketing communication”.

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Commercial & Consumer

EU Consumer Enforcement & Modernisation Directive to amend Unfair Commercial Practices Directive and introduce fines of 4% of turnover

As part of a review of consumer protection Directives the EU Commission has proposed changes to the Unfair Commercial Practices Directive (UCPD), which is the basis for the UK’s Consumer Protection from Unfair Trading Regulations (and also underlies many provisions of the CAP Code on advertising).  These changes are set to be approved in autumn 2019, and will include the introduction of a right to fine businesses up to 4% of their annual turnover for breaches of the UCPD, provisions tackling the misleading sale of different qualities of goods under common packaging in different parts of the EU, and new obligations on online traders to provide information to consumers such as: ranking criteria for search results; verifiability of product reviews; and whether prices have been subject to an automated personalisation process.

New items will be added to the list of practices that are considered to be automatically unfair, including: failure to disclose payments for achieving higher rankings in search results; reselling tickets where automated means have been used to circumvent limits on the number purchased; publishing product reviews without checking that they originate from genuine customers; and using false or misleading customer reviews. Once adopted, Member States will have up to 2 years to implement the changes into domestic law.  If Brexit proceeds it may be that the UK is not obliged to do so, but the Government may nevertheless choose to implement the changes in order to keep UK law in line with EU rules.

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Data & Privacy

ICO 'Update report' on data privacy compliance in AdTech and Real-Time Bidding

In common with a number of other data privacy regulators around the EU, the UK’s Information Commissioner has received a number of complaints about the handling of personal data in the online advertising environment, and also has its own concerns about the extent to which the AdTech sector is complying with the requirements of GDPR and the Data Protection Act 2018.  This “Update report” is the first major pronouncement from the ICO in its investigation of programmatic advertising, and it has chosen to focus initially upon the “real time bidding (RTB)” element in the system.  The ICO makes clear that it still intends to do a good deal of further work in this area, but at the same time it wants to proceed in a “measured and iterative” way so that those operating in the sector have a chance to adapt their practices, while the ICO itself can respond accordingly to such adjustments.

Key conclusions in this initial report include the following: the adtech industry appears immature in its understanding of data protection requirements; there is a good deal of unlawful processing taking place, not just of special category data; operators often wrongly believe that they can rely upon “legitimate interests” to justify use of cookies or similar technology, when in fact consent is required; insufficient attention is also given to other requirements of data protection law, such as security, risk management, data minimisation, fairness of processing and controls on international transfers.  The ICO plans to continue to gather data, engage with the industry, cooperate with other data protection regulators, and probably to issue a further report in 2020.  In the meantime it wants to see practices begin to change, and expects data controllers in the adtech industry “to re-evaluate their approach to privacy notices, use of personal data, and the lawful bases [for processing that] they apply within the real-time bidding system.”

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Irish Data Protection Commission launches statutory inquiry into Google’s use of personal data in Ad Exchange processes

The Irish Data Protection Commission (IDPC) is in a particularly important position with regard to the types of data privacy/adtech issues discussed above, because many of the biggest players in the online advertising and e-commerce environment have their European headquarters in Ireland.  By way of example, the IDPC has recently – partly in response to submissions from privacy campaigners - opened an investigation into Google Ireland Ltd’s processing of personal data in the context of its online Ad Exchange system.  This is intended “to establish whether processing of personal data carried out at each stage of an advertising transaction is in compliance with the relevant provisions of the General Data Protection Regulation.”  The GDPR requirements as to transparency, data minimisation and data retention are mentioned in particular.

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Trade Marks, Passing Off & Domain Names

High Court offers guidance to the UK Intellectual Property Office on dealing with bad faith applications

The High Court has upheld a decision of the IPO hearing officer that an application to register the words “TRUMP TV” as a UK mark in classes relating to broadcasting/communication and entertainment/education should be rejected for having been made in bad faith.  The application had been opposed by the holding company in charge of administering marks previously owned by Donald Trump. The judge saw the case as an example of a global problem of attempts to register well-known marks by third parties who have no connections with such marks.  He took the opportunity to clarify certain principles that IPO hearing officers should take into account in future when assessing whether such applications were made in bad faith, for instance: “i) where an application is made for a well-known trade mark with which the appellant has no apparent connection, this requires explanation and justification by the applicant; [and] ii) other instances of such applications by the applicant…may be admissible as similar fact evidence and may refute the explanation and justification provided by the applicant;… [and] v) The Registrar may strike out proceedings brought for an ulterior and improper purpose as an abuse of process”.

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IP Enterprise Court finds awards ceremony organiser liable for passing off

The Claimants in this case had for many years run an event called the “Asian Achievers Awards”, and when the Defendants launched a new event called “British Asian Achievers Awards” the Claimants sued them in passing off.  The Defendants admitted that there was goodwill established in the Claimants’ event, but argued that there was no misrepresentation: the title of their event was purely descriptive, while differences in logos and in information supplied with mailings would ensure that the public were not confused.  The judge disagreed – there was evidence of actual confusion on the part of one party who knew the Claimants’ event well, and with the mere addition of the word “British” there was a risk that a substantial number of potential attendees or sponsors would be misled into thinking that the Defendants’ event was run by or connected with the Claimants.

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