European Commission launches Digital Agenda

Last week the European Commission launched its Digital Agenda. The stated aim of this is to “deliver sustainable economic and social benefits from a digital single market based on fast and ultra fast internet and interoperable applications.”

The Commission is looking to introduce new laws and policies at an EU level to remove the obstacles which are hindering a digital single market. Some of the key obstacles identified by the Commission include.

1. Fragmented digital markets

Europe is still a patchwork of national online markets and lacks a unified market. Consumers can buy CDs in every shop but are often unable to buy music from online platforms across the EU because rights are licensed on a national basis. This contrasts with the relatively simple business environment and distribution channels in other regions such as the US.

The Commission will simplify copyright clearance, management and cross-border licensing. It will propose a framework Directive on collective rights management by 2010.

2. Lack of interoperability

“We need effective interoperability between IT products and services to build a truly digital society.”

The Commission will, as part of its review of EU standardisation policy, propose legal measures on interoperability to reform the rules on implementation of information communication technology standards in Europe.

3. Rising cybercrime and risk of low trust in networks

“Europeans will not embrace technology they do not trust – the digital age is neither “big brother” nor “cyber wild west””.

To combat these problems the Commission will strengthen privacy laws and suggest the establishment of Computer Emergency Response Teams across Europe that co-operate with each other and respond to crime and network attacks.

4. Lack of investment in networks

Europe needs widely available, competitively-priced fast internet access to promote social inclusion and competitiveness in the EU and the Commission will introduce policies and laws to facilitate broadband investment.

5. Insufficient research and innovation efforts

According to the Commission, Europe continues to under-invest in information communication technology related research and development.

The Commission will leverage more private investment and ensure sufficient financial support for research infrastructures and innovation clusters. The Commission will also propose measures to make EU research funds more easily available to increase their attractiveness to SMEs and young researchers.

Comment

The Digital Agenda is to be welcomed and consumer will certainly benefit. Fragmented digital markets and a lack of interoperability are issues that continue to surface as we saw with the recent public dispute with Apple and Adobe. These are key issues that need to be addressed.

The concern is that the EU does not have a great track record in promoting an effective pan-European online market. There is an element of deja-vu concerning the Digital Agenda.  The Commission was making similar noises in 2000 at the height of the dotcom boom. This lead to whole raft of legislation including the E-commerce Directive, the E-money Directive and the Digital Signatures Directive which haven't really achieved their stated aims.  This legislation became (to a significant extent) redundant fairly quickly. Hopefully, the Commission will have learnt its lesson this time.

Posted by ebizlaw team on the 25-05-2010

Google wins keyword advertising case

The ECJ has finally ruled on three disputes arising from the sale and use of Google AdWords that have been referred to it by the French courts.  It ruled in Google’s favour, that the sale by Google of a trade mark as an AdWord did not constitute “trade mark use”.  The limit of Google’s obligation is that it has to take down an infringing use if it is notified of the use.

This is a drop in the ocean compared to the amount lost by high end fashion retailers who argue against a more pernicious feature of keyword advertising - the use of words such as ‘imitation’, ‘copies’ and ‘knock-offs’ in association with trade marks.  The French case against Google Louis Vuitton claims that it was not surprising that many of the sponsored links that used such words in conjunction with Louis Vuitton trade marks directed users to websites that offered counterfeit Louis Vuitton products.

Notwithstanding this, the ECJ held that Google's business of selling trade marks as AdWords is not use in the course of trade within the terms of Article 5 of Directive 89/104 and Article 9 of Regulation 40/94.  Google is simply allowing its clients to use signs which may be identical or similar to trade marks, without itself using the signs.  The fact that clients pay for the use of such signs and the fact that Google creates the technical conditions necessary for this does not change this fact. 

Comment

Some would argue that simply because Google have reduced the system of purchasing such signs to an automated process does not mean that it can wash its hands of what its customers get up to.  The Court is in effect saying that technology trumps rights.  A curious outcome given that Google could easily put in a filter to prevent third parties from purchasing a trade mark as an AdWord if it does not own the mark.

In practical terms this Judgment changes little - trade mark owners will have to continue to monitor use, and as the internet grows as a tool of e-commerce the money spent by brand owners in combating infringements will increase.  This will push up costs and ultimately the price of goods and services.   Also, sites that are misleading and are not picked up by the brand owner will not be pulled; this will cause confusion and mislead the consumer as to the true origin of the products or services it is purchasing.   Ultimately it is the consumer who will suffer.

Posted by ebizlaw team on the 23-03-2010

Google joins cloud revolution as Government consults on £500,000 maximum fine for data breaches

Google recently publicised its new computer operating system, Chrome OS, which it hopes could revolutionise computing. Rather than storing files and documents on the computer’s hard drive, Chrome OS relies on data stored in the “Cloud”. This means that files are accessible on demand from anywhere in the World assuming that you have an Internet connection. That is in fact quite a big assumption as even in this technology advanced country we do not have a comprehensive high speed internet infrastructure and there is lack of WiFi hotspots outside of major towns and cites. 

Despite this, cloud computing is the future as so much of life is now online; friends, music, film and pictures. Not only that but there are also significant benefits for business – reduced capital outlay for hardware and software and flexibility in the pricing model with “pay as you go” tariffs available. And besides, if Google see this as the future, you would be a brave person to bet against them.

But, with the news that Information Commissioner (the UK data protection regulator) could get the power to levy fines of up to £500,000 for serious breaches, data security will be an increasingly important factor in the move to cloud computing services. There is an increasing news flow about data security breaches, in both the public and private sectors and this is where the attention of the regulators is focussed. The FSA have in a particular levied six figure fines for data security breaches.

Under data protection laws, if a business engages a cloud service provider to look after their data, they will remain responsible for the security of the data and must ensure that the service provider gives “sufficient guarantees in respect of technical and organisational security measures”. Any breach of security by the provider, could lead to the business being fined by the regulator. It is generally the “owner” of the data that remains responsible. To manage this risk, businesses need to put in place appropriate contract terms not only to protect itself but also as a requirement to comply with data protection legislation.

Posted by ebizlaw team on the 24-11-2009

Getty Images shows the way forward for content owners?

The advance of technology and the digital age has been a pain in the proverbial for content owners. The ease with which material can be copied and distributed has undermined the business model of many content owners. Commenting on file sharing, the Creative Coalition Campaign - a partnership between trade unions representing people working in the creative industries has recently said that "our creative sector produces world-class content, bringing joy to countless people across the UK and the world, but this can't be sustained if illegal file-sharing persists."

There is a risk that if content owners are not able to make money from producing content, there will be a disincentive to produce the content in the first place. With the expectation that everything available on the web should be free, it is problematic to charge directly for content, whether that is news or music. Some parts of the music industry have embraced this by taking the opportunity to reach a wider audience (by allowing their music to be more freely available on the web), to generate more revenue from live gigs, sponsorship, advertising and merchandising. Despite this model working for some, there is a strong movement towards charging for content (see Rupert Murdoch's recent comments) and vigorously enforcing rights (see the recent debate on cutting off persistent files sharers).

Getty Images, a photographic agency, is an example of the latter part of this shift, as it is seeking to enforce its rights against those who use its images without authority. Often, the task of identifying infringers is outsourced to a third party who is incentivised, and may use heavy handed tactics, to extract a payment. The success of this strategy was highlighted last week when the court ordered a removals business to pay Getty Images nearly £2,000 (plus Getty Images' legal costs) for using a copyright protected photograph on its website without the permission of Getty Images. This is despite the fact that the website owner took the offending photo down on being contacted by Getty Images. Some website owners think that this is sufficient to appease the rights owner, but there is no guarantee that this will be the case. Content owners will often have a claim for compensation, even if they choose not to pursue legal action. But when a third party enforcement agency is involved, there is a clear incentive to seek to extract a payment and the content owner is well within its rights to do this. Even where the image is not generating any revenue itself, the content owner can claim compensation on a "lost licence fee" basis (i.e. the licence fee it would have earned, if the image had been properly licensed in the first place). Alternatively, where the website is making money from the unlawful content, then an "account of profits" can be claimed. Such enforcement can potentially be quite lucrative and open up a new revenue stream for the content owner. Also, once a content owner gets a reputation in the market place for enforcing its rights vigorously, then businesses will think twice about not being properly licensed.

For businesses, becoming involved in legal action can be expensive in terms of legal fees, management time and compensation payments so action should be taken to minimize this risk. Potential risk areas include where images and other works protected by copyright such as software are provided by a third party agency or developer. In that situation, businesses need to ensure that there is a licence in place to use the image and software and that the licence reflects the actual use. In the event that someone challenges the right to use certain work, then you need to be able to point to the licence, or at least pass on the costs of any action to the third party at fault under the contract that you have with the third party. The other main risk area is employees who assume that just because content is on the web, anyone is free to use it how they wish. This is almost always not the case and businesses need to ensure that their employees understand this. Referencing a search engine, such as google images, as a source is a dead giveaway of a lack of knowledge about image licensing.
 

Posted by ebizlaw team on the 14-09-2009

Privacy v web: are our privacy laws fit for purpose?

With the news this week that the Canadian privacy commissioner has reported that Facebook is breaching Canadian law by holding on to users' personal information indefinitely, the issue of privacy versus the rise of social media sites is again brought to the fore.

Even with Facebook’s stated commitment to privacy and vast resources, it seems unable to operate within the boundaries of privacy rules. Whilst this could be by design to a certain extent, there does seem to be an inherent conflict between the privacy rules we have today and the way in which individuals wish to use the web.

Take for example the ability of users to upload information about their friends or contacts (who are not members of the social media platform), the platform is unlikely to be able to contact these friends or contacts so cannot comply with its obligations under privacy laws. Even if the platform could contact friends or contacts to invite them to join the platform and consent to the use of their data, to do so could be a breach of the ePrivacy Directive on sending unsolicited electronic messages for direct marketing purposes. A rock and a hard place springs to mind. This is just one example of the difficulties faced by businesses in complying with privacy laws.

This issue has been recognised by the rather strangely named “Article 29 Working Party” which is an influential group of the EU Data Protection Commissioners which publishes opinions on privacy issues to assist with compliance with EU law. In June, the Working Party offered some guidance to social media platforms. Key tips include:

* Default settings should be privacy friendly;

* Users should be given adequate warnings about the privacy risks;

* Users should be advised that pictures or information about other individuals should only be uploaded with the individual’s consent;

* The homepage should contain a link to a privacy complaints process;

* Abandoned accounts should be deleted after a defined period of time.

Whilst this is helpful, there are still major issues that need to addressed. The area of data retention was also highlighted as an issue with the Working Party recommending that social media platforms should not retain deleted data unless they have a specific reason to do this. This is the issue faced by Facebook in Canada. The problem is that it is difficult for platforms to delete all data about a user available on the site. Account information is fairly straightforward but there could be personal information on other users’ profile pages, for example, which could be problematic to delete.

So what is the solution? Well the interim solution seems to be that certain regulators (the UK Information Commissioner is included in this) take a pragmatic and more risk / harm based approach to interpreting data protection laws. Rather than focusing on technical breaches of data protection laws, the focus is on the harm to individuals. This is fine for the time being and allows organisations and their advisers to develop more risk based compliance strategies. However, this does create a degree of uncertainty and devalues privacy rules. Sooner rather than later we need to consider whether our privacy laws are indeed fit for purpose. They were of course developed in the early 1990s at a time when Mark Zuckerberg was colouring in picture books rather than creating Facebook so a review is almost certainly needed.

Posted by ebizlaw team on the 21-07-2009

Will ISPs be forced to police the Internet?

In the perennial debate between rights holders and ISPs and consumers, ISPs have rejected calls from nine bodies representing the creative industries who have asked the Government to force ISPs to disconnect users who repeatedly file share material unlawfully.

Followers of this debate, will remember that last year the UK's largest ISPs, BT, Virgin, Orange, Tiscali, BSkyB and Carphone Warehouse signed up to a government backed scheme to send letters to customers who were caught illegally sharing music. This initiative was designed to appease the BPI who were wanting a 'three-strikes and your out' rule whereby persistent file-sharers would have their internet connection cut off. At that time, ISPs were willing to implement the letter sending scheme but stopped short of disconnecting users.

Twelve months ago illegal file sharing was a bigger issue for ISPs in terms of the bandwidth costs and ISPs no doubt welcomed the opportunity to reduce these costs by targeting file sharers. There is now even less incentive for ISPs to tackle this issue from a costs perspective with the increasing popularity of “legal” on demand video services such as the BBC iPlayer which represents a huge increase in the cost of bandwidth. The bandwidth cost of file sharers does not look quite so problematic in comparison! But suggesting that this is the reason ISPs are not co-operating ignores a number of important issues.

It is fair to say that the Internet is considered an important (if not, vital) utility. No one would suggest cutting off your electricity supply if a consumer was using this for an illegal purpose. The penalty of disconnecting users is therefore wholly disproportionate to the crime. The content providers have rights and remedies to pursue individuals and businesses that engage in persistent file sharing. The recent imprisonment of The Pirate Bay operators and the large fine levied highlights that these remedies can be effective and make the most seasoned of file sharers think twice about engaging in illegal activity.

Content owners have adequate rights to protect their interests and s