Archive for March, 2011

Seminar on TUPE and outsourcing

Our colleagues in Brodies’ top rated employment & pensions department are holding a seminar at our Edinburgh office next Tuesday on outsourcing and TUPE – from “Bathgate to Bangalore”. The seminar is free, and will give some practical advice on how to deal with some of the trickier people issues involved with outsourcing and offshoring.

If you are interested in attending, then you can sign up here. Note the seminar will also be repeated in Glasgow and at our new Aberdeen office.

Bodyformed for you

Do you remember the Bodyform theme tune?  Sure you do.  It involved a faux-Tina Turner booming “whooooah Bodyform, Bodyformed for you…”.  It was bizarrely catchy and went like this

The recent announcement that Bodyform is resurrecting its iconic theme tune with a “Release Your Whoah – be the next voice of Bodyform” competition reminded us that the last time Bodyform got a bit creative with its’ advertising it earned a complaint to the Advertising Standards Agency (“ASA”), the UK’s independent advertising regulator.

Last autumn the ASA was asked to consider 3 Bodyform adverts which Stella McCartney Limited (“SMC”) objected to.  A magazine advert stated “WIN* Stella McCartney underwear at bodyform.co.uk”.  The asterisk directed the reader to a footnote that stated “*This is not in association with Stella McCartney luxury underwear.  Terms and conditions apply – see website for details.”  An online version of the advert featured similar wording.  The third advert was in another magazine, but failed to include any wording highlighting that there was no formal connection between Bodyform and SMC.

SMC claimed that these adverts were denigratory and took unfair advantage of the SMC brand because they associated it with a product without permission.  SMC also argued  that the adverts were misleading and in breach of the British Code of Advertising, Sales Promotion and Direct Marketing because they implied that SMC endorse the Bodyform product.

The ASA held that referring to another manufacturer’s product as a prize, in the absence of disparaging claims, and describing the brand as a “luxury” item, was unlikely to be interpreted by readers as discrediting that brand.  The ASA also held that a reference to another brand alone would not be interpreted by readers as an endorsement, meaning that even the advert which failed to highlight that that there was no formal connection between Bodyform and SMC was acceptable.

Overall this is a pretty permissive adjudication.  A company isn’t likely to offer a product as a competition prize and then denigrate it.  And it strikes me as a bit of a stretch that in this sort of situation advertisers don’t necessarily have to make any effort to avoid an implication that there is no association with the competition prize brand. 

Had SMC raised an action for passing off and false endorsement, I doubt a court would have been so lenient.  Following the Eddy Irvine  case, it’s well established that if the actions of the defendant produce a false message which would be understood by the market to mean that his goods have been endorsed or recommended by the claimant, then the claimant can succeed in passing off, and be entitled to damages on the basis of the licence fee which would have been agreed by a notional willing endorser and endorsee.

Perhaps it is also reflective of the fact that the ASA is actually an advertising industry body and not (as many people believe) some goverment regulator backed by law. 

Good luck with your Bodyform competition entry!*

*Let’s hope it doesn’t break any rules regarding the regulation of sales promotions.

Cornish Pasty Protection

I was in Ashers bakery in Aviemore at the weekend when I noticed a sign that said “Our Cornish Pasties are now called Highland Pasties”.  “Why’s that?” I thought.

Well it seems that the EU has decided that “Cornish Pasty”  is a Protected Geographical Indication (PGI).

http://www.bbc.co.uk/news/uk-england-cornwall-12535751

So if it’s not made in Cornwall, to a traditional recipe, then it can’t be called a Cornish Pasty.

John has previously blogged about PGI and related issues here.

I will continue to selflessly check what other bakers are now calling their pasties.  My first field trip is planned for lunchtime today.

Read all about it – Apple’s landgrab in the app content market

Douglas recently joked that I have embraced the “iPayTooMuch” lifestyle, and it is true that I am a fan of easy to use software and hardware that “just works”.

However, in the interests of showing that I do not agree with everything coming out of Cupertino, I thought I would comment on the recent furore over Apple’s new “in-app subscription” requirements for iOS (iPhone/iPad etc) apps that allow the user to consume paid for content such as ebooks, music, newspapers and magazines.

What it’s all about?
For those of you who missed the press coverage of this a couple of weeks ago, Apple has attempted to use its control of the iOS ecosphere to grab a share of the revenue for content purchased for consumption in apps. Apples’s new policy requires that such apps must offer an in-app facility to allow content purchases using only the user’s iTunes account (in return for which, Apple takes a 30% cut).

Purchasing content by other means (through another website or whatever) is still permitted, but as those other means cannot be promoted in the app itself, and the in-app price (including Apple’s 30% cut) must be the same as the non-in-app price, it is hard to see why consumers would choose anything other than the “easy” in-app purchase route.

The developer’s perspective
Brodies’ TIO Group client and producer of the Eucalyptus ebook reader app, Jamie Montgomerie, has written a really interesting blog on this that summarises (from a developer’s point of view) why this is a “bad thing”.

As Jamie points out, margins in this market are already tight, and there simply isn’t enough cash around to allow Apple to take a 30% cut. This is particularly the case where developers have given away an app (or sold it at a reduced price) and were depending on revenue from in-app sales.

Isn’t this just the same as buying music from iTunes?
You may say that this is no different to the purchase of music through iTunes, but there are two immediate differences that spring to mind:

  • firstly, this policy applies across the board to all types of content. Newspapers and magazines are distributed by numerous competing organisations. In contrast, the music industry is dominated by a small number of large players, each of whom will have negotiated their own deal for Apple for sales through iTunes (and I bet that Apple is not getting the full 30%).
  • secondly, the iPod has always been closely tied to the iTunes ecosystem, and purchasing music from iTunes predates the App Store. In contrast, to date the App Store has offered an open environment for purchasing and consuming other types of content from third parties. Indeed, music streaming apps like Spotify currently allow you to link through to the Spotify website to buy a song from Spotify. Under the new policy, Apple will expect a 30% cut of Spotify’s revenues from such sales. If that happens then Spotify will no longer be able to compete on price with Apple’s own iTunes, losing a valuable revenue stream.

Competition concerns
So what will happen?

It will partly depend on the response from developers (to develop or not develop for iOS?) and the response from consumers (as Jamie says, “I hope you like [Apple’s own ebook reader] iBooks“).

And that may be the issue here. The European Commisssion yesterday announced an investigation into the ebook market and the dominant position of publishers. This investigation appears to focus on the fact that ebooks are generally sold on an agency model (with the publisher setting the price, as opposed to the printed market where there is far more competition as retailers act as distributors and can choose their own price) and alleged cartel behaviour, but shows that the Commission is already taking a interest in the lack of competition in this market.

Given that Apple’s policy change effectively gives it a cut of all content sold for use on iOS apps (whether it is bought through iTunes or otherwise – eg from the Amazon/Kindle store), it may make it almost impossible for anyone to undercut [ie compete] with content sold by Apple through iTunes. If this happens then iTunes and the Apple apps are likely to become the predominant ebook/music/video players and content sources on iOS devices to the exclusion of innovative products and services that have (to date) been allowed to flourish. It sounds a bit like the Microsoft Internet Explorer/Windows Media Player battle all over again.

That might be little bit more Apple dominance than the Commission is prepared to swallow.

*Not sent from my iPad 2.

Information Commissioner offers guidance on civil monetary penalties

Last Thursday I attended the Holyrood Magazine’s Data Protection 2011 conference, and during the afternoon workshop entitled “new powers and penalties regime, protecting and sharing sensitive data”, the Information Commissioner Christopher Graham provided an interesting insight into how the Information Commissioner’s Office (“ICO”) calculates civil monetary penalties levied against data controllers which contravene the Data Protection Act (“DPA”).

As you may be aware, a penalty of up to £500,000 can now be levied by the ICO when one of the eight principles of the DPA have been seriously breached.  A penalty is only applicable if the ICO is convinced that the breach was deliberate or that the data controller knew, or ought to have known, of the contravention risk, and that the contravention would be likely to cause substantial damage or substantial distress and that the controller failed to take action to stop it.

The Information Commissioner indicated yesterday that the ICO enforcement team and the non-executive directors of the ICO assist him in calculating an appropriate penalty, and regard is paid not just to the circumstances of the contravention, but also the nature and size of the contravening organisation.

It was also stated that the ICO does not wish to cripple provision of public services by issuing huge penalties to councils, or to compound breaches of data security by putting private data controllers out of business. Rather, the intention of the penalties is to encourage responsible processing of personal data.

With that aim in mind, if an organisation asks the ICO for an audit, the organisation won’t get a civil monetary penalty if a shortcoming in good practice is discovered.  Instead, it will be provided with a plan to amend any shortcomings, and an agreed timetable within which to make the amendments.

In the event that an organisation is charged with a penalty for a contravention of the DPA, it will also be given advance warning, and asked to provide reasons as to why the penalty should be lowered.

The Commissioner acknowledged that there had been criticism of the decision to levy a “small” £60,000 fine against A4e Limited for not encrypting sensitive data on an laptop that was subsequently stolen.

However, he said that the fine was part of a calibration process in which the maximum £500,000 fine would be reserved for only the most serious contraventions. Although the Information Commissioner didn’t elaborate further, it sounds like that the plan is to reserve the £500,000 penalty in order to maximise the media coverage/adverse reputational impact of the contravention which eventually gives rise to the maximum penalty being applied.

Given that some parties feel that the £500,000 cap on the penalty is actually too low, keeping the maximum penalty under wraps in order to maximise its eventual impact may prove to be a very clever strategy.


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