Archive for January, 2013

Our Public Law team blog on a legal challenge to Barnet Council’s decision to outsource a wide range of services to outsourcing firm Capita. The judicial review is based on a number fo grounds, including an alleged breach of the public procurement regulations and an alleged breach of the Council’s fiduciary duty to tax payers.

As local authorities increasingly look to efficiences that can be made through shared sevrices and outsourcing, this hearing will be closely watched by both local authorities and suppliers of outsourcing services.

Brodies PublicLawBlog

Local authorities are increasingly expected to to find new and innovative ways of managing diminishing budgets and limited resources but the recent move by Barnet Council to outsource £320m worth of services has caused some to ask whether they have gone a step too far.

The Council has reportedly agreed to outsource services including the Council’s call centre, payroll, information technology and human resources to Capita over a 10 year period.  This has resulted in a backlash from some residents, one of whom (a disabled person who fears that the agreement could have an adverse impact on the support services she currently receives) has raised judicial review proceedings in the English High Court. 

The argument is that the contract is unlawful because the Council: (1) failed to comply with section 3(2) of the Local Government Act 1999 which places an obligation on local authorities to consult all stakeholders including residents…

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Christine O’Neill blogs on our PublicLaw blog about the Information Tribunal’s first hearing in Scotland, following Scottish Borders Council’s appeal against its monetary penalty under the Data Protection Act issued as a result of a data breach by a contractor working on behalf of the Council.

Brodies PublicLawBlog

Interesting story carried by the BBC today suggests that (I think for the first time) the Information Tribunal (more properly the First tier Tribunal – Information Rights) is going to sit in Scotland to hear an appeal from a decision of the UK Information Commissioner. As has been widely reported, Scottish Borders Council was fined £250,000 by the ICO in relation to the discovery of pensions records in a supermarket car park.

SBC is appealing against the level of the fine and, it appears, the Tribunal has determined that it should hold an oral hearing in March in Edinburgh or in the Borders. A rare chance to see the Tribunal at work north of the border.

Christine O'Neill

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Will the proposed EU directive on web accessibility lead to confusion and hinder innovation?

Following on from my blogpost last month on the European Commission’s draft directive on the accessibility of public sector websites, I have an article in the forthcoming edition of C&L Magazine, the journal for the Society of Computers and the Law.

Under the proposed directive, new EU-wide rules will be introduced setting out specific requirements in relation to the accessibility of certain websites operated by public sector organisations. In the article, I analyse the impact of the proposed directive on public authorities.

If implemented as it currently stands, the directive raises a number of concerns:

  • Firstly, organisations are presumed to comply with the new law if they achieve Level AA conformance with the W3C‘s Web Content Accessibility Guidelines 2.0 (WCAG). The problem with WCAG is that whilst they provide a good starting point for accessible design, they are only one part of the wider accessibility jigsaw. Indeed, legislating in a manner that requires compliance with a fixed set of technical guidelines is concerning, because WCAG (and therefore the law) will inevitably fail to keep up with evolving technologies for delivering online services (for example, mobile or rich media).
  • This approach could have been mitigated by allowing organisations to deviate from WCAG compliance, if they can justify why this is an appropriate thing to do (as the UK Equality Act provides), but the draft directive does not provide such flexibility.
  • Finally, and perhaps more concerningly, the directive does not explain how it is intended to interact with pre-existing national laws that apply to the accessibility of services provided over the web, where a breach is based on actual discrimination taking place. This creates the very real risk that a public authority could comply with the requirements of the directive, whilst simulateously being in breach of its obligations under the Equality Act (or vice versa).

Whilst the directive may help achieve the Commission’s primary stated aim of removing barriers in the market for the provision of web development services in the EU (by ensuring that public sector organisations are obliged to set standardised technical criteria for accessibility), the directive is a fairly blunt instrument. I remain unconvinced that the directive will have such a positive impact upon the accessibility of websites to users with disabilities.

A far better approach would be to look at adopting the guidance contained in the British Standards Institute’s British standard on commissioning accessible websites.

You can read the article in full on the SCL website.

Martin Sloan

Better the devil you know? Proposed reform to Service Provision Changes and the application of TUPE

The Government has recently announced that it is proposing to make a number of changes to the scope of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”).

These proposals include the removal of references to service provision changes: outsourcing, ‘second generation’ outsourcing (i.e. the transfer of the outsourced services from one provider to another) or in-sourcing.

As it currently stands, TUPE will apply where a service provision change takes place which involves an organised grouping of individuals in Great Britain whose principal purpose is carrying out activities which are transferred to a new provider. The effect of this is, of course, that the outgoing and incoming parties in such a scenario have duties to inform and consult with the affected employees about the transfer, and the affected employees’ employment will automatically transfer to the new provider.

For many the benefit of the current system is certainty. Generally, parties involved in a service provision change will presume that TUPE will apply and are prepared to negotiate the contractual documentation on that basis – the parties know where they stand.

However, the UK Government was not under an obligation to develop TUPE law by expressly stating that TUPE would apply on a service provision change and many felt that this was a step too far – increasing costs on the parties in respect of situations which may previously have been outside the regulations’ scope. These concerns have led to the Government’s current proposals.

Should the service provision change references be removed from TUPE it must be remembered that many service provision changes will still be caught by TUPE anyway. The standard TUPE test is met where there is a transfer of an economic entity that retains its identity. However, parties will be left having to step back in time to look at older case law to assess whether TUPE applies to their situation

What now?
The Government’s consultation closes on 11 April 2013.

Should the Government decide to take the proposals forward any changes will not be implemented until October 2013. Even if the reference to service provision changes is removed at that time there is certainly no need to panic! The Government is aware that:

  • many contracts involving service provision changes are drafted on the basis that TUPE will apply on the cessation of the services (i.e. on ‘exit’), and therefore obligations and liabilities in respect of TUPE will have been heavily negotiated and factored into the deal commercials; and
  • outsourcing projects can be very large, complicated and a significant amount of time can pass between the initial planning stage and the implementation stage where the services actually transfer.

As a result, the Government recognises that there will need to be a transitional period prior to any change in the law becoming effective.

The Government is due to publish its response to the consultation in July and there will be much more clarity on what is going to happen at that time. Many hope for the status quo to continue and say it’s never too late for the Government to change its mind, but given the numerous changes the Government are making to employment law at the moment I would be surprised if the changes didn’t go ahead. However, it’s certainly a case of watch this space…

You can take part in the consultation by following this link.

Andrew McConnell

Andrew is an associate in Brodies’ Employment, Pensions and Benefits department, and regularly advises on the application of TUPE to outsourcing and services agreements. Andrew blogs on Brodies’ EmploymentBlog.

Kim Dotcom and Mega: Legal FAQs

You’re probably familiar with Kim Dotcom, the German-Finnish internet entrepreneur who currently resides in New Zealand, and is being pursued by the US Department of Justice regarding accusations of a “Megaupload” business empire built on rampant infringement of US copyright laws and the Digital Millennium Copyright Act. 

Much of what is currently being written about Mr Dotcom simply churns trite facts without actually offering much in the way of explanation.  I thought a blog which answered some of the main questions would be helpful.

How does the US have jurisdiction over Megaupload?
Why would Megaupload Limited, with its registered office in Hong Kong, be subject to US copyright laws and to the Digital Millennium Copyright Act?  The answer is that Megaupload deliberately carried out business in the US and with US residents.  The site leased more than 1,000 servers in North America (525 were at Carpathia Hosting, which received $13 million from Megaupload).   

Wired provides great analysis here, but the general principal is that individuals and companies can’t gain the benefits of doing business in a jurisdiction without complying with its laws and being subject to its enforcement efforts – assuming that the jurisdiction can gets its hands on you in “terrifying real life”. Which brings us to extradition!

Will Dotcom be extradited?
Under New Zealand’s Extradition Act, any request for extradition from New Zealand must relate to an “extraditable offence” which is defined as an offence that:

  • Carries a maximum penalty of not less than one year’s imprisonment in the requesting country; and
  • Involves conduct that would be regarded as criminal had it occurred in New Zealand, and would have carried a similar penalty

Unfortunately for Kim Dotcom, breach of copyright is just as illegal in New Zealand as it is in the US. 

Part 3 of the Extradition Act also provides a mechanism by which the requirements to provide evidence establishing a prima facie case in support of the extradition request can be replaced by the simpler “record of the case” procedure. This mechanism is available to select countries, including the US.  (A guide to New Zealand extradition prepared by the New Zealand Ministry of Foreign Affairs and Trade can be read here.)

Nevertheless the US is struggling to extradite Dotcom and is also struggling to make its case against Megaupload and the “conspirators” (Dotcom and various associates).  Dotcom actually received an apology from the Prime Minister of New Zealand for illegal surveillance.  A helpful timeline of the various legal twists and turns can be read here.

What’s the new service that he’s offering?
Kim Dotcom has launched a new service, Mega, which he says is distinct from Megaupload, and which he also insists is legal.

Mega is offering all users 50GB of free cloud storage, making it a potentially compelling competitor to the likes of Dropbox (2GB free) and SkyDrive (7GB free) — if you’re not worried about the service getting shut down like its predecessor.

Mega offers client-side encryption, meaning that (arguably) even Mega doesn’t know what is on the files that clients upload.  The only way a client file can be decrypted is if the client makes both the encrypted file and also the private encryption key publicly available.  This would presumably breach acceptable use of Mega, and Mega also has in place a take down process similar to what other content sharing websites (such as YouTube) offer, and which is required under US law in order for the website operator to qualify for “safe harbor” protection from copyright infringement claims.

Of course, the predecessor site Megaupload had a take down process as well, so this leads us to the next obvious question.

Is Mega legal?
Dotcom still insists that Megaupload was legal, despite the US Department of Justice’s claims that Megaupload’s overall operating model was geared towards criminal intent, because:

  • the vast majority of users did not have any significant long term private storage capability;
  • continued storage was dependent upon regular downloads of files occurring;
  • files that were infrequently accessed were usually rapidly removed, whereas popular downloaded files were retained;
  • only a small portion of users paid for storage subscriptions, meaning that the business was dependent on advertising revenue, and displaying adverts to downloaders;
  • an incentive programme was adopted encouraging the upload of “popular” files in return for payments to successful uploaders; and
  • (potentially most damning of all) there was a comprehensive take down process in use for child pornography and terrorist propaganda, but this same take down process was not deployed to remove infringing content.

Initial impressions would suggest that Mega does not share these strategies.  Certainly Dotcom would have to be incredibly foolish to not apply the take down  process this time around.  In fact, it’s perhaps a credit to Dotcom’s slick advertising/media persona, and Mega’s attractive user interface, that initial bloggers thought Mega would “dismantle copyright forever”.

As Jonathan Bailey succinctly puts it (in by far the best analysis of Mega which I have read):

where Megaupload provided incentives and tools that encouraged users to upload (often illegal) files for mass download, Mega  does not and in fact has a structure and service that puts barriers up against mass downloading of files, legal or otherwise.

What is certain is that we can expect plenty of fun and games over the next few months. 

When Mega launched this week as “The Privacy Company” their claims of super-security were bound to come under the highest levels of scrutiny (some cloud providers definitely perform better than  others in the security stakes – see my colleague Leigh’s analysis).  Yesterday the story was that Mega’s encryption was substandard, today the story (which is emerging as I write) appears to be some form of encryption prize – Kim Dotcom himself has just Tweeted:

We welcome the ongoing #Mega security debate & will offer a cash prize encryption challenge soon. Let’s see what you got ;-)

Who knows what tomorrow will bring?


Our Public Law team blog on a proposed extension to the number of bodies subject to the Freedom of Information (Scotland) Act 2002. Under the proposals, arm’s length bodies set up by local authorities to carry out certain functions will be within scope. IT and outsourcing vendors who currently provide services to these sorts of organisations (or are considering bidding for contract opportunities) may wish to bear this in mind when reviewing their contracts.

Brodies PublicLawBlog

The Scottish Government last week announced its intention to increase the number of bodies subject to the Freedom of Information (Scotland) Act 2002 (“FOISA”).   The Government wants to extend FOISA to arm’s length bodies established by local authorities that provide cultural, sports and leisure activities to the public.  It remains to be seen whether they will achieve their aim:  long-in-the-tooth FOI practitioners will know the history of attempts by previous administrations in Scotland to expand the scope of FOI.

Currently FOISA applies to the list of organisations at Schedule 1 (as amended from time to time by section 4).  The Scottish Ministers can also designate other bodies as a ‘Scottish public authority’ under section 5 of FOISA  if they are neither already on Schedule 1 nor capable of being added to Schedule 1 by the section 4 power.    Now that all sounds quite complicated, but in order to be designated a public authority the body must be exercising functions…

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Real time journey information systems – enabling innovation through data sharing and interoperability

Over the last few years, I’ve been involved in a number of projects involving the creation and use of transport and journey information in the transport sector. These include the procurement of real time passenger information (RTPI) (where real time journey information is made available to passengers online and through on-street display boards) and smart ticketing systems and the opening up of that data to third parties through an API.

When procuring a RTPI system, there are a number of issues to consider.

Firstly, who owns the data? RTPI systems are often procured by a local authority or regional transport partnership. The location data going in to the system may be collected by equipment owned by the local authority (or the contractor operating the system) and deployed on vehicles or by the bus company’s own fleet tracking system. It will then be processed by the RTPI system to provide the real time journey data. The contracts that are put in place between the various entities need to make clear who owns the data and what rights each of the other parties have to use it.

Secondly, it’s important that the RTPI system enables interoperability. This will allow data to be shared with other RTPI systems (for example, multi-modal or in neighbouring geographic areas) and other users (for example, mobile apps developers seeking to incorporate journey information in their products and services). This means that the system will need to include appropriate APIs that make the data available in a recognised industry standard format. As part of any support and maintenance arrangements, those interfaces should keep up with market developments on interoperability.

Re-use of public sector information regulations
Part of the reason for local authorities making available data through an API is a response to the Re-use of Public Sector Information Regulations, which implemented an EU directive on the re-use of public sector information directive (the PSI Directive) and the UK Government’s Open Data iniative.

The regulations are intended to open up access to information and datasets held by public authorities, so that publicly owned data can be reused for innovative purposes. The regulations provide rules on requests to reuse information held by public sector organisations. RTPI and journey data is a good example of data that can be reused and mashed up into other applications.

Notably, the regulations prohibit public authorities from acting in a discriminatory manner or from entering into exclusive arrangements in relation to the re-use of public sector information unless that arrangement is in the public interest. This means that local authorities should not be entering into exclusive arrangements in relation to the use of transport information that they hold.

The regulations also limit any charges that the public authority may levy on the use of the information. The authority may recover a “reasonable return on investment”, but cannot charge for the costs it has incurred if it has already charged the recipient under freedom of information or data protection laws.

The authority should also publish details of its charging structure and terms of use of the information.

Rather than develop bespoke interfaces and licence terms for each person seeking to utilise the data, the easiest way for local authorities to make available RTPI data is through a publicly available API, with a standard form licence setting out the terms of use.

Proposed reform
The European Commission is currently consulting on new legislation in this sector.

It does not think that the PSI Directive has been effective in ensuring open access to transport data. Notably, the PSI Directive applies only to public sector bodies (so not private transport operators), and does not apply to information where the intellectual property rights are owned by a third party – for example, the bus or train company in question.

The Commission is therefore proposing that all transport operators are obliged to make available, fare, schedule and real time journey information in an industry standard format. The Commission proposes that the European standardisation bodies work together to develop related standards to ensure interoperability using a common standard.

This should help to open up access to transport data that is not currently being made available, and lead to new and innovative use of that data by third party developers.

What’s not clear from the proposed consultation is how the reforms will work in practice. In the UK, public transport is largely run by companies in the private sector. However, RTPI systems for buses tend to be operated by local authorities or regional transport partnerships, who then aggregate data from different operators. In order for the reforms to be effective the new laws will need to cover all parts of the chain.

There will be other concerns as well. In the UK, the bus industry is regulated by traffic commissioners, who have powers to fine operators for late running services. There is often a tension between bus companies and local authorities when making available real time journey information as that could be used to easily analyse the company’s performance without the need for commissioners to stand at bus stops with a watch, a timetable and a clipboard. It will be interesting to see whether the transport industry lobbies against this requirement.

In the meantime, any organisation considering procuring an RTPI or other transport data system should ensure that their technical specification addresses interoperability, the use of common (or mandated standards) and APIs to help ensure compliance with the Commission’s proposals.

The consultation closes on 12 March 2013.

Martin Sloan

Getting tangled in The Ivy

 A recent dispute concerning the use of the name “THE IVY” by a restaurant in Glasgow has served as a useful reminder of the value in carrying out trademark clearance searches before starting to trade.

Last year, the owners of “Glasgow’s Ivy Bar and Restaurant” received a letter threatening it with trade mark infringement from the owners of The Ivy, the famous restaurant in London, which is owned by Caprice Holdings.  The Glasgow restaurant was forced to change its name and according to The Herald the estimated costs and losses associated with this rebrand are around £30,000.  £20,000 of this is attributed to lost business and £10,000 was incurred in creating a new website, signage and other rebranding for the Glasgow restaurant. 

The law on trade mark infringement

In the UK, a registered trade mark is infringed if a person uses without the owner’s consent in the course of trade (i) an identical mark for identical goods/services and/or (ii) a similar or identical sign is used for similar or identical goods/services which results in actual or likely confusion amongst customers as to the origin of the goods/services and/or (iii) where use of a sign takes unfair advantage of, or is detrimental to, the distinctive character or the repute of a famous trade mark.

Caprice Holdings could have had claims against the owners of the Glasgow restaurant under all three heads.  UK case law states that descriptive or semi descriptive elements such as the words “Glasgow”, “Bar” and “Restaurant” are not considered to be part of the sign or real brand being used.  On that basis Caprice Holdings could have claimed trade mark infringement for identical sign/identical services being provided under the key brand name the “IVY”. Even if that was not the case and the trade marks were not found to be identical, the similarity of the respective trade marks and the fact that they are both are used to provide identical services means that there was a strong likelihood of confusion.  Any differences between the respective trade marks are not likely to be sufficient to distinguish Glasgow’s Ivy Bar and Restaurant from The Ivy.  In addition to those arguments, it is quite possible that Caprice Holdings would be able to show that THE IVY is a famous trade mark with a very well known reputation for restaurant and bar services and that by using “IVY” in “Glasgow’s Ivy Bar and Restaurant” they are seeking to ride on the coattails of the famous trade mark.  All such activities could have supported a claim of trade mark infringement.  In addition there could have been a claim of passing off to protect the unregistered trade mark/goodwill built up in THE IVY.  The existence of the trade mark registration however would have made the claim easier to establish.

Prevention is better than cure

This dispute serves as a useful reminder that prevention is better than a cure when it comes to trade mark infringement.  Businesses should carry out appropriate clearance searches before selecting and using a brand or trading name and it could save them having to carry out a time consuming and costly rebrand further down the line.  Although not always fully comprehensive a quick check of the free online trade marks database should have revealed that Caprice Holdings Limited owns a community trade mark (number E6057517) for THE IVY  which is registered in the UK for amongst other things, restaurant, bar and catering services.  Even a simple Google search for “IVY” brings up the London restaurant as the first search result and it is likely that anyone operating in the restaurant scene would be aware of the famous reputation of The Ivy.

If you have any concerns about a business or trading name that you or your company is using or plans to use and you wish advice on this please contact one of our IP team.  One of the options we can discuss with you is our IP Audit Toolkit which can help to identify your intellectual assets and develop strategies to use them.

Mark Cruickshank

Amazon AutoRip – sell your CD collection and get a free digital music library?

At a time when digital rights owners are trying to use the courts to restrict the application of the first sale/exhaustion doctrine to digital rights, Amazon’s announcement today about its new AutoRip service might cause some surprise.

As part of its launch of AutoRip, which gives customers that purchase a CD from Amazon a free MP3 version that can be streamed or downloaded from Amazon’s Cloud Player, Amazon has said that any CD that a customer has bought from Amazon since 1998 will automatically be made available to that customer in MP3 format. At no additional cost.

Why is this interesting? Well the customer may sold that CD on many years ago. Indeed, he may have bought the CD as a present for someone else. Yet even though the customer has transferred on his ownership of the physical CD (and, therefore, the accompanying licence to listen to the music on that CD), Amazon appears to be giving that customer a digital copy for free (it has no way of knowing otherwise). Over a 15 year period, that could add up to a considerable amount.

Resale and exhaustion of rights
Under the principle of exhaustion (or “first sale doctrine” in the US), once a manufacturer has sold something, he cannot control onwards sale or transfer by the purchaser. This has led to lots of litigation trying to restrict the application of this principle to downloaded software and music. Digital copies do not suffer degradation, therefore a second hand digital copy is no different to a “new” purchase. If a bouyant resale market is established, this is likely impact on the sales of “new” copies of media.

However, it stands to reason, that once you’ve sold something on, you no longer have any rights to use it. Indeed, in a European Court of Justice ruling last year, the court stated that in order for a licensee to legitimately resell a software licence the original copy had to be removed from the computer in question. In other words, the licensee had to cease using it.

Applying that principle to AutoRip, once an Amazon customer has sold a CD he has purchased from Amazon, he no longer has a right to listen to it (or to have a ripped copy on his computer under the US fair use doctrine). AutoRip essentially brings those rights back to life.

If/when the courts ever confirm that restrictions on reselling digital media content are unlawful (as the European courts have done in relation to downloaded software), that raises the possiblity that consumers could separately sell their physical and digital copies. Again, its difficult to see how rights holders could police this seperate divestment of rights.

Is this just smart marketing?
I think AutoRip is a clever marketing step by Amazon.

When negotiating licences for AutoRip and the Cloud Player with the major record labels, the cost of enabling AutoRip to be applied to historic purchases is likely to have been pretty low to Amazon. Yes, some people will have sold their old CDs, but many people will have not. And those that did will likely have kept a(n illegal) digital copy before they did so (and therefore could “cleanse” their digital copy using iTunes Match). I doubt that the the record labels view this as losing them any revenue (unless resales of digital media are eventually permitted).

But from Amazon’s point of view it gives long time customers a ready made cloud music library for free (remember, there’s no annual fee for content acquired through AutoRip). What better way to build a customer base for your cloud based music service and boost your future sales of physical CDs at the same time? It may also allow Amazon to charge a greater premium for CDs over the cost of digital only sales.

Whether this makes a dent on Apple/iTunes’s dominance remains to be seen. But once again it shows a another shift away from a music industry driven by enforcing intellectual property rights through siloed rights allocation, to one where a wider commercial view is taken to music distribution.

Martin Sloan

Does your social media competition follow the rules?

A “witty” epigram (which I dreamt up all by myself) is: “competition laws are boring, laws about competitions aren’t”.  I really like reading about how competitions are regulated, with the added bonus that you also gain some interesting insights into companies’ marketing strategies and profit margins.

In recent years I have noticed that the relative ease of launching promotions on social media sites such as Facebook and Twitter has resulted in the internet being awash with competitions which fail to meet the applicable rules and regulations.

Although social media competitions are usually just a fun way of reaching out to potential customers, the consequences of failing to follow the rules – or even just failing to apply the rigour traditionally administered to “offline” competitions – can be distinctly less jolly.  For example, in November Boots ran a competition on Facebook and subsequently accidentally informed all 9,000 entrants that they had won a trip to Barcelona.  It’s thought the company was forced to issue £90,000 worth of apologies.

The CAP Code
It’s important to remember that all prize promotions – whether online or otherwise – must adhere to the Advertising Standards Agency (ASA)’s CAP code (the Government-approved Code of Non-Broadcast Advertising, Sales Promotion and Direct Marketing).

In the last couple of years the ASA has published plenty of rulings regarding non-compliant online competitions (see for example the recent “118 118” ruling) whilst also maintaining a public list of non-compliant online advertisers.

Although the ASA punishments are normally limited to a bit of bad publicity, and a warning of “don’t do it again”, in theory its sanctions can extend to revocation of trading privileges (for example bulk mailing discounts) and referral to the Office of Fair Trading.

There’s not space here to list all the applicable CAP Code competition rules, but here are some really important ones:

  • don’t run what the Gambling Commission would deem an “illegal lottery” (punishable by fines and/or imprisonment); 
  • avoid running an illegal lottery by including a “skill” element (which can be part of a competition run, for example, where the competitor has to purchase a “promotional pack” of goods, providing the “promotional pack” doesn’t cost more than a “normal” pack);
  • alternatively, avoid running an illegal lottery by offering free entry (or where one route to entry is not free, at least one alternative and equally publicised “free” route to entry which costs no more than what it would normally cost to use that method of communication));
  • if you are including a skill element, remember that the law applying to participants from Northern Ireland is slightly different (so participants from Northern Ireland should still be offered a free entry route even if participants from the rest of Great Britain have to purchase, for example, a “promotional pack”).
  •  always include a closing date (and don’t change it);
  • always state what the prize actually is;
  • clearly state any restrictions (for example age; geographical location);
  • include details of the promoter;
  • tell people how winners will be informed;
  • always make it easy to find the applicable terms and conditions; and
  • ensure that any prize draw is conducted in accordance with the laws of chance, either by using a computer process that produces verifiably random results (consider using, or by an independent person, or under the supervision of an independent person.

If in doubt, bear in mind Rule 8.2 of Section 8 (Sales Promotions) of the CAP Code:

Promoters must conduct their promotions equitably, promptly and efficiently and be seen to deal fairly and honourably with participants and potential participants. Promoters must avoid causing unnecessary disappointment.

Social media sites have their own rules too
Once compliance with the CAP code has been addressed, social media sites’ own rules must be complied with.  The big risk here is that if either Facebook or Twitter don’t like your competitions, then they can disable or permanently delete your accounts.  (Anecdotal evidence suggests that deleted Facebook accounts are rarely restored.)

Twitter’s guidelines are fairly straightforward, Facebook’s less so. 

In fact, the Institute of Promotional Marketing is currently working with both Facebook and Twitter to develop guidelines for brands who wish to run social media competitions.

Nevertheless, it’s still possible to read Facebook’s Promotions Guidelines and Twitter’s Guidelines and identify some broad do’s and dont’s.

On Facebook:

  • Don’t post a competition as a Status Update and ask “friends” to act upon it.  Facebook doesn’t like corporate/marketing content where social content should be, and prohibits the use of any “indigenous functionality” (Liking, Sharing, Commenting, checking-in, uploading photos to a Wall or responding to a poll/questionnaire) as a means of entering a competition.  Facebook instead recommends hosting competitions on externally hosted applications embedded into a Page App tab on your Facebook page.  (Upon reflection, the prohibition on using “Like” to enter is quite sensible – how could you tell the difference between someone just liking the page because they like your brand, or someone liking it to enter the draw?)
  • Facebook does allow you to stipulate that only people who “Like” your page can enter the competition. You are also allowed to limit people entering your competition to those who have checked into your location or who are using your Facebook app.
  • Ensure that the applicable terms and conditions acknowledge that Facebook is not associated with your competition in any way and that any personal information collected from the entrants is being sent to your company.  (In my experience a lot of terms and conditions relating to Facebook competitions fail to include this vital disclaimer.)
  • After a competition winner has been chosen, contact them off Facebook. (Make sure to collect contact details during the registration process so you don’t have a problem with this.)  You can’t use Facebook messages, chat, or posts to contact the winner.

On Twitter:

  • Discourage competitors from posting the same Tweet repeatedly.  (Competitions saying “whoever retweets this the most wins” are definitely a bad idea).  Twitter dislikes multiple Tweets because they damage the quality of searches.  The best solution is to state that multiple entries in a single day will not be accepted.
  • Encourage users to include an @reply to you in their Tweet so you can see all the entries.  Many of the complaints that reach the ASA regarding Twitter competitions involve suspicions that entries haven’t been received.  Relying on a public search may not show all relevant Tweets.

And remember that the CAP code and Gambling Commission rules outlined above will still also apply, so think about how you ensure that your competition does not accidentally become an illegal lottery.

If you have any questions about running a social media promotion, please get in touch


Twitter: @BrodiesTechBlog feed

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