Monthly commercial law update: Top 5 developments in August

Monthly commercial law update: Top 5 developments in August

Summer is a promissory note signed in June, its long days spent and gone before you know it, and due to be repaid next January (Hal Borland)

January? Most of us are back in the office and accounting for the lazy days of summer now. Meetings are starting to take over diaries like an infestation of Japanese knotweed and, to the surprise of many, telephone calls are actually getting answered.

Things are getting done.

So, before you get too excited and start to tick off everything on your 'to do' list, take 5 to check out August's top 5 commercial law developments:

Advertising and marketing law: CAP removes distance-selling rules from the CAP Code

Between November 2014 and January 2015, the committees on non-broadcast (the Committee on Advertising Practice (CAP)) and broadcast advertising (BCAP) consulted on proposals to remove the distance-selling rules from the UK Codes of Non-broadcast and Broadcast Advertising.

The CAP and the BCAP proposed removing the distance-selling rules from the Codes because:

  • the rules preventing misleading advertising effectively govern information requirements for advertisements,
  • post-contractual matters are not strictly speaking advertising issues, and
  • low levels of complaint persuaded the BCAP that consumers already seek redress elsewhere.

Following the consultation, the CAP and the BCAP have removed the distance-selling rules from the Codes with effect from 6 August 2015.

The changes do not affect consumers' statutory rights but the Advertising Standards Authority (ASA) will no longer look into complaints in this area.

Advertising and marketing: CAP launches new vlogging guidance

The UK Code of Non-broadcast Advertising, Sales Promotions and Direct Marketing (the Cap Code) provides that advertisements must be obviously identifiable as such. Therefore, if a video blogger or vlogger is paid to promote a product or service and an advertiser controls the message, it becomes an advertisement.

New guidance from the Committee of Advertising Practice (CAP) clarifies that if vloggers are advertising, they must be upfront and clearly signpost the fact.

The guidance aims to help vloggers better understand how and when the advertising rules apply to their vlogs, and comes in response to calls for greater clarity from vloggers about when material in vlogs becomes advertising and how they can make this clear.

The CAP guidance follows an Advertising Standards Authority (ASA) ruling in 2014 in which several vlogs, in which there was a commercial relationship between the advertiser and the vloggers, were found to be misleading because they did not make clear to consumers that they were advertisements.

The guidance provides a non-exhaustive list of vlogging scenarios with practical advice on how and when the rules kick in. The scenarios covered are:

  • online marketing by a brand—where a brand collaborates with a vlogger and makes a vlog about the brand and/or its products and shares it on its own social media channels
  • 'advertorial' vlogs—a whole video is in the usual style of the vlogger but the content is controlled by the brand and the vlogger has been paid
  • commercial breaks within vlogs—where most of the vlog is editorial material but there's also a specific section dedicated to the promotion of a product
  • product placement—independent editorial content that also features a commercial message
  • vlogger's video about their own product—the sole content of a vlog is a promotion of the vlogger's own merchandise
  • editorial video referring to a vlogger's products—a vlogger promotes their own product within a broader editorial piece
  • sponsorship—a brand sponsors a vlogger to create a video but has no control of the content
  • free items—a brand sends a vlogger items for free without any control of the content of the vlog

The advertising rules do not cover or prohibit vloggers entering into commercial relationships, and the ASA does not regulate editorial opinion.

In response to feedback from vloggers, however, the CAP and the ASA are also reminding brands and agencies looking to partner with vloggers of the need to be transparent. Any advertiser or agency that asks a vlogger not to disclose that they're advertising are asking the vlogger to break the advertising rules and potentially the law.

Contracts: government removes ban on invoice assignment clauses

The government has outlined its intention to stop bans on invoice assignment clauses in business-to-business contracts following a consultation.

Invoice finance can provide a vital means of finance for suppliers, including small businesses, for which it might be the only assets against which they can borrow.

Currently, a supplier's commercial customers are able to contractually bar invoice assignment, which can subsequently raise the cost of, or even prevent access to, invoice finance.

The government intends, through powers provided in the Small Business, Enterprise and Employment Act 2015 (SBEEA 2015), to nullify the contractual terms which seek to prohibit assignment of invoices. The government has concluded that the nullification of ban on invoice assignment clauses should:

  • apply to business-to-business contracts only
  • extend to all businesses, regardless of size
  • only apply where parties conduct a transaction using English contract law and one of them carries on business within the UK
  • exclude financial services contracts and contracts with interests in land
  • not apply retrospectively
  • permit debtors to take action against suppliers if they breach commercial confidentiality, and
  • not create any special provisions for supply chain finance arrangements

Data protection: ICO orders Google to remove search results

The Information Commissioner’s Office (ICO) has served an enforcement notice on Google requiring it to remove information about a person relating to a minor criminal offence committed nearly ten years ago.

The ICO’s ruling confirms that although searches may contain links to stories in the public interest, an unwarranted and negative impact on the individual’s privacy can nevertheless constitute a data protection breach.

Following a request by the individual concerned, Google agreed to remove links relating to the criminal offence. However, once the story was delisted, the delisting itself became a news story soon after. Some articles on the delisting included information about the criminal offence. The individual again complained to Google regarding these later links. However, Google refused to remove these links from their search results, arguing the stories concerned its decision to delist a search result and, further, the articles were an essential part of a recent news story relating to a matter of significant public importance.

The ICO, however, ruled in favour of the individual. It said by including in its search results links to articles containing information no longer relevant to the individual, Google breached the Data Protection Act 1998

Supply of goods and services: BIS consults on proposal for Small Business Commissioner

The Department for Business, Skills & Innovation (BIS) is consulting on the introduction of a Small Business Commissioner.

The discussion paper sets out the government's current understanding of the problems that small businesses face and its thinking about possible solutions.

It seeks views and further evidence about the problems and how the proposed Commissioner can help.

The Commissioner's services will enable smaller firms to resolve disputes with other businesses quickly and easily. This will preserve important commercial relationships without the need to go to court. Its main functions will be:

  • providing information and general advice, and
  • signposting and offering mediation to resolve disputes dealing with complaints

That's it for now. Don’t forget, by entering your name and email address in the box on the right hand side of this page you will receive our full monthly round-up PDF for free, along with other exclusive content courtesy of our new Comet newsletter.

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