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E-commerce developments and
use of social media
David Naylor
Partner


Robert Blamires
Senior Associate


8 March 2012
Introduction
1. Contracting and regulation
   ?   Distance Selling
   ?   Credit / debit card surcharges
   ?   Common European sales law
2. Social media
   ?   Content Ownership
   ?   Right to Use the Platform
   ?   Rights Granted to the Platform
   ?   Stealth Advertising
   ?   Employee Usage
Contracting and Regulation ¨C Distance Selling
? Revised EU Consumer Rights Directive
? Expected to be implemented by Oct 2013 and include:
   ? Harmonisation of rules across Europe (eg same cooling off period,
     standard template withdrawal form)
   ? Extension of cooling off period ¨C 7 working days to 14 days
   ? Reduction in period by which traders must refund on cancellation ¨C 30
     days to 14 days
   ? More extensive information requirements, particularly for payment
     and for digital content
   ? Ban on pre-ticked boxes and default settings if lead to additional
     charges
   ? New rules governing delivery times and the passing of risk in goods
   ?   Wider rights for consumers to withdraw

? Will necessitate a review of any B2C online platforms
Contracting and Regulation - Surcharges

? Ban on surcharges for debit and credit card
  transactions which exceed the actual costs of
  handling the payment
? To be implemented by the EU Consumer Rights
  Directive but, following OFT recommendations,
  UK government is implementing these changes
  early (expected by end 2012).
? Expected to cover most retail sectors
? Consultation expected shortly
Contracting and Regulation - Common European
 Sales Law
? European Commission plans to introduce ¡®optional¡¯ EU-
  wide contract code for cross-border contracts, due to
  fears that current differences across Member States
  impede cross-border trade
? Targeting B2C traders / SMEs
? Option of contracting under CESL
? To be considered by European
  Parliament and Council
Social Media - Key points

1. Content Ownership
2. Right to Use the Platform

3. Rights Granted to the
   Platform
4. Stealth Advertising
5. Employee Usage
Social Media ¨C (1) Content Ownership
Can you use your content in a social media campaign?
   ? Copyright Designs and Patents Act 1988
       11.First ownership of copyright
         The author of a work is the first owner of any copyright in it, subject to
         the following provisions.
         Where a literary, dramatic, musical or artistic work[, or a film,] is made
         by an employee in the course of his employment, his employer is the
         first owner of any copyright in the work subject to any agreement to the
         contrary.
       90.Assignment and licences
         1. Copyright is transmissable by assignment¡­
         4. A licence granted by a copyright owner is binding¡­
Social Media ¨C (1) Content Ownership

Can you use your content in a social media campaign?
Even when you have created content:
?It may include content (eg music) which may need to be
cleared / licensed
?If employees or customers etc will appear, you should get
releases and data protection consents




                                                   8
Social Media ¨C (2) Right to Use the Platform




                                       9
Social Media ¨C (3) Rights Granted to the Platform




                                          10
Social Media ¨C (3) Rights Granted to the Platform




                                          11
Social Media ¨C (4) Stealth Advertising
?   EC Unfair Commercial Practices Directive / UK Consumer Protection
    from Unfair Trading Regulations
?   Infringements for a trader (or anyone acting on his behalf) to:
     ?   falsely claim or create the impression that the trader is not acting for
         purposes relating to his business;
     ?   falsely represent himself as a consumer; or
     ?   use editorial content in the media to promote a product without disclosing in
         the content that the promotion has been paid for
?   For example:
     ?   a trader (or someone acting on his behalf) reviewing the trader¡¯s own
         products on a website / internet forum without disclosing that the reviewer is
         the trader himself / someone acting on his behalf
     ?   using fake blogs or ¡°flogs¡± (a trader creating a blog promoting its own
         products, under the guise of an ordinary consumer)
Social Media ¨C (4) Stealth Advertising
? OFT acted for first time under Consumer Protection
  from Unfair Trading Regulations in December 2010
? Investigated Handpicked Media, a commercial
  blogging network operator, suspected of publishing
  online content on blogs and microblogs (i.e. twitter)
  promoting their clients without making clear to
  consumers that promotions had been paid for
Social Media ¨C (4) Stealth Advertising
? OFT identified in Handpicked Media:
   ? misleading omissions
   ? other unfair commercial practices (eg paid-for editorial content
     without adequate disclosures)

? OFT confirmed: online advertising is ¡®misleading¡¯ if
  advertiser does not disclose that promotional activity
  was paid for
? Handpicked Media signed undertakings to disclose
  all paid-for promotional comments
Social Media ¨C (4) Stealth Advertising
Social Media ¨C (4) Stealth Advertising
                         #spon ¨C is this enough?
Social Media ¨C (5) Employee Usage
? Potential legal liability includes:
   ? Defamation
   ? Loss of own confidential information / trade secrets
   ? Breach of third party confidential information / trade secrets
   ? IP infringement
   ? Breach of privacy
   ? Discrimination
   ? Harassment¡­etc
   ? Obscene publications
   ? Corruption
? Very real scope for reputational damage
Social Media ¨C (5) Employee Usage
Social Media ¨C (5) Employee Usage
Social Media ¨C (5) Employee Usage
Social Media ¨C (5) Employee Usage
Social Media ¨C (5) Employee Usage
Practical Tips ¨C Overview

?   Different approaches for different companies
?   Different approaches for different staff within companies
?   Inform and educate employees
?   Ensure compliance with platform operators¡¯ terms of use
?   Review corporate internet and technology use policies
?   Provide internal mechanisms for suggestions / complaints / whistle-
    blowing
?   Be prepared ¨C knee-jerk reactions rarely work
Social Media - Checklists
Checklists ¨C Social Media Campaigns

Before running a social media campaign:
? Do you have all necessary IP rights in content that will be
  uploaded?
? Are appropriate agreements in place with designers,
  developers, content providers and employees?
? Do you have consent or other lawful grounds for collecting
  / using any personal data?
? Have you reviewed the site¡¯s terms, and checked they are
  acceptable?
? Have you complied with advertising regulation / laws
  prohibiting stealth marketing etc?
Checklists ¨C Contracting with Social Media
Platforms
Be realistic: limited scope for negotiation for smaller
companies with major platforms

Checklist
?   Ensure you know which platform terms / other agreement(s) you are bound by
?   Ensure you are clear about the nature of the services provided
?   Check licensing provisions acceptable / understood by the business
?   Check you can comply with content and other warranties / acceptable use
    policies
?   Ensure payment criteria are clear and appropriate
?   Ensure you understand what rights you and the platform will have to access and
    use user data
?   Ensure term and termination provisions understood
?   Ensure liability provisions are understood
Checklists ¨C Contracting with Social Media
Platforms
Where you have more scope to negotiate
Checklist
?   Ensure relationship is properly defined
?   Ensure content ownership / licensing provisions precise and effective
?   Ensure success criteria are clear and measurable
?   Carefully review warranties and indemnities
?   Consider appropriate mechanisms for content moderation / take down
?   Ensure appropriate service levels
?   Consider whether there will be joint promotion arrangements
?   Ensure payment, term, termination, law / jurisdiction, and liability
    provisions are acceptable
Checklists ¨C Employee use of social media

Practical Tips - Key areas to cover in social media policy
?   Usage during work time and over company systems and devices
?   If / when company should / should not be identified or content should
    be identified as personal and not representing views of employer
?   If / when employee may comment on behalf of company
?   Reminder about obligations to maintain confidentiality / not divulge
    confidential / trade secret information
?   Reminder that comments may / will be treated as public
?   Prohibitions on illegal / harmful / inappropriate content / behaviour
?   Explanation of types of monitoring employer may undertake in relation
    to the use of social media by its employees
?   Warning that breach of policy might lead to disciplinary action, up to
    and including dismissal
David Naylor
Partner
david.naylor@ffw.com
020 7861 4150


Robert Blamires
Senior Associate
robert.blamires@ffw.com
020 7861 4136

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E commerce developments and use of social media

  • 1. E-commerce developments and use of social media David Naylor Partner Robert Blamires Senior Associate 8 March 2012
  • 2. Introduction 1. Contracting and regulation ? Distance Selling ? Credit / debit card surcharges ? Common European sales law 2. Social media ? Content Ownership ? Right to Use the Platform ? Rights Granted to the Platform ? Stealth Advertising ? Employee Usage
  • 3. Contracting and Regulation ¨C Distance Selling ? Revised EU Consumer Rights Directive ? Expected to be implemented by Oct 2013 and include: ? Harmonisation of rules across Europe (eg same cooling off period, standard template withdrawal form) ? Extension of cooling off period ¨C 7 working days to 14 days ? Reduction in period by which traders must refund on cancellation ¨C 30 days to 14 days ? More extensive information requirements, particularly for payment and for digital content ? Ban on pre-ticked boxes and default settings if lead to additional charges ? New rules governing delivery times and the passing of risk in goods ? Wider rights for consumers to withdraw ? Will necessitate a review of any B2C online platforms
  • 4. Contracting and Regulation - Surcharges ? Ban on surcharges for debit and credit card transactions which exceed the actual costs of handling the payment ? To be implemented by the EU Consumer Rights Directive but, following OFT recommendations, UK government is implementing these changes early (expected by end 2012). ? Expected to cover most retail sectors ? Consultation expected shortly
  • 5. Contracting and Regulation - Common European Sales Law ? European Commission plans to introduce ¡®optional¡¯ EU- wide contract code for cross-border contracts, due to fears that current differences across Member States impede cross-border trade ? Targeting B2C traders / SMEs ? Option of contracting under CESL ? To be considered by European Parliament and Council
  • 6. Social Media - Key points 1. Content Ownership 2. Right to Use the Platform 3. Rights Granted to the Platform 4. Stealth Advertising 5. Employee Usage
  • 7. Social Media ¨C (1) Content Ownership Can you use your content in a social media campaign? ? Copyright Designs and Patents Act 1988 11.First ownership of copyright The author of a work is the first owner of any copyright in it, subject to the following provisions. Where a literary, dramatic, musical or artistic work[, or a film,] is made by an employee in the course of his employment, his employer is the first owner of any copyright in the work subject to any agreement to the contrary. 90.Assignment and licences 1. Copyright is transmissable by assignment¡­ 4. A licence granted by a copyright owner is binding¡­
  • 8. Social Media ¨C (1) Content Ownership Can you use your content in a social media campaign? Even when you have created content: ?It may include content (eg music) which may need to be cleared / licensed ?If employees or customers etc will appear, you should get releases and data protection consents 8
  • 9. Social Media ¨C (2) Right to Use the Platform 9
  • 10. Social Media ¨C (3) Rights Granted to the Platform 10
  • 11. Social Media ¨C (3) Rights Granted to the Platform 11
  • 12. Social Media ¨C (4) Stealth Advertising ? EC Unfair Commercial Practices Directive / UK Consumer Protection from Unfair Trading Regulations ? Infringements for a trader (or anyone acting on his behalf) to: ? falsely claim or create the impression that the trader is not acting for purposes relating to his business; ? falsely represent himself as a consumer; or ? use editorial content in the media to promote a product without disclosing in the content that the promotion has been paid for ? For example: ? a trader (or someone acting on his behalf) reviewing the trader¡¯s own products on a website / internet forum without disclosing that the reviewer is the trader himself / someone acting on his behalf ? using fake blogs or ¡°flogs¡± (a trader creating a blog promoting its own products, under the guise of an ordinary consumer)
  • 13. Social Media ¨C (4) Stealth Advertising ? OFT acted for first time under Consumer Protection from Unfair Trading Regulations in December 2010 ? Investigated Handpicked Media, a commercial blogging network operator, suspected of publishing online content on blogs and microblogs (i.e. twitter) promoting their clients without making clear to consumers that promotions had been paid for
  • 14. Social Media ¨C (4) Stealth Advertising ? OFT identified in Handpicked Media: ? misleading omissions ? other unfair commercial practices (eg paid-for editorial content without adequate disclosures) ? OFT confirmed: online advertising is ¡®misleading¡¯ if advertiser does not disclose that promotional activity was paid for ? Handpicked Media signed undertakings to disclose all paid-for promotional comments
  • 15. Social Media ¨C (4) Stealth Advertising
  • 16. Social Media ¨C (4) Stealth Advertising #spon ¨C is this enough?
  • 17. Social Media ¨C (5) Employee Usage ? Potential legal liability includes: ? Defamation ? Loss of own confidential information / trade secrets ? Breach of third party confidential information / trade secrets ? IP infringement ? Breach of privacy ? Discrimination ? Harassment¡­etc ? Obscene publications ? Corruption ? Very real scope for reputational damage
  • 18. Social Media ¨C (5) Employee Usage
  • 19. Social Media ¨C (5) Employee Usage
  • 20. Social Media ¨C (5) Employee Usage
  • 21. Social Media ¨C (5) Employee Usage
  • 22. Social Media ¨C (5) Employee Usage Practical Tips ¨C Overview ? Different approaches for different companies ? Different approaches for different staff within companies ? Inform and educate employees ? Ensure compliance with platform operators¡¯ terms of use ? Review corporate internet and technology use policies ? Provide internal mechanisms for suggestions / complaints / whistle- blowing ? Be prepared ¨C knee-jerk reactions rarely work
  • 23. Social Media - Checklists
  • 24. Checklists ¨C Social Media Campaigns Before running a social media campaign: ? Do you have all necessary IP rights in content that will be uploaded? ? Are appropriate agreements in place with designers, developers, content providers and employees? ? Do you have consent or other lawful grounds for collecting / using any personal data? ? Have you reviewed the site¡¯s terms, and checked they are acceptable? ? Have you complied with advertising regulation / laws prohibiting stealth marketing etc?
  • 25. Checklists ¨C Contracting with Social Media Platforms Be realistic: limited scope for negotiation for smaller companies with major platforms Checklist ? Ensure you know which platform terms / other agreement(s) you are bound by ? Ensure you are clear about the nature of the services provided ? Check licensing provisions acceptable / understood by the business ? Check you can comply with content and other warranties / acceptable use policies ? Ensure payment criteria are clear and appropriate ? Ensure you understand what rights you and the platform will have to access and use user data ? Ensure term and termination provisions understood ? Ensure liability provisions are understood
  • 26. Checklists ¨C Contracting with Social Media Platforms Where you have more scope to negotiate Checklist ? Ensure relationship is properly defined ? Ensure content ownership / licensing provisions precise and effective ? Ensure success criteria are clear and measurable ? Carefully review warranties and indemnities ? Consider appropriate mechanisms for content moderation / take down ? Ensure appropriate service levels ? Consider whether there will be joint promotion arrangements ? Ensure payment, term, termination, law / jurisdiction, and liability provisions are acceptable
  • 27. Checklists ¨C Employee use of social media Practical Tips - Key areas to cover in social media policy ? Usage during work time and over company systems and devices ? If / when company should / should not be identified or content should be identified as personal and not representing views of employer ? If / when employee may comment on behalf of company ? Reminder about obligations to maintain confidentiality / not divulge confidential / trade secret information ? Reminder that comments may / will be treated as public ? Prohibitions on illegal / harmful / inappropriate content / behaviour ? Explanation of types of monitoring employer may undertake in relation to the use of social media by its employees ? Warning that breach of policy might lead to disciplinary action, up to and including dismissal
  • 28. David Naylor Partner david.naylor@ffw.com 020 7861 4150 Robert Blamires Senior Associate robert.blamires@ffw.com 020 7861 4136