Face forward 2013

1. Face forward 2013 Stephen Groom 13 December 2012

2. Predictions coming up… • OBA/cookies-new CAP Code rules • Domain names –new gTLDs • New Consumer Rights Act • Privacy-radical data protection reforms? • and watch out for….

3. OBA and cookies: new CAP Code rules • In force Monday 4 February 2013 • In the firing line: • "Third Parties" and • "Advertisers" whose ads appear online courtesy of OBA • What is a third party? • "an organisation engaging in OBA (collecting and using web viewing behaviour data for the purposes of OBA) via websites other than that it or an entity with which it is under common control owns or operates"

4. OBA and cookies: new CAP Code rules #2 • Some excluded categories: • contextual ads • web analytics • first party OBA • mobile devices ( to be extended to these "in due course") • Included: • "behavioural retargeting" whereby display ads are served to users who have shown a previous interest in a product but have not actually bought

5. OBA and cookies: new CAP Code rules #3 • Six new rules: • Third Parties must provide on their own websites "clear and comprehensive notice" about their OBA activity • Third Parties must give same notice in or around display ads served to all other sites using OBA • In #1 and #2 Third Parties must provide a link to a "relevant mechanism" for user to choose "do not track" • Advertisers must co-operate with the ASA to help identify Third Parties if ASA unable to do so • Third Parties must not create interest segments specifically designed for targeting under 13s • Third Parties must obtain explicit consent before using technology to track and use for OBA information about all or substantially all sites visited by users of a particular computer

6. OBA and cookies: new CAP Code rules #4 • "Relevant mechanism" undefined but the only one mentioned by CAP in its Help Note is the Advertising Option Icon system involving: • European Advertising Standards Alliance Best Practice Recommendations for OBA • EU Industry Framework • European Interactive Digital Advertising Alliance • NB icon licence needed costing €3000-5000 pa depending on annual revenue from online display advertising

7. OBA and cookies: new CAP Code rules #5 Questions and Predictions • Questions • Jurisdiction? • Penalties for repeat offenders? • Other "relevant mechanisms" possible? • Predictions • 4 February 2013 - new rules in force • April 2013 - ASA receives high volumes of complaints • May 2013 -CAP publishes further clarification of new rules and penalties for recidivist breakers of Appendix 3

8. Domain names: new gTLDs #1 • What • Extension of current TLD regime – theoretically limitless numbers of new gTLDs • gTLD can be comprised of almost any word or name, including for the first time non-Latin scripts. • .brand (.OSBORNECLARKE) • .product / .service (e.g. .holidays, .hotels, .law) • brand.product (e.g. OSBORNECLARKE.LAW) • Successful applicants for a new gTLD will become the operator and registrar of their own gTLD.. • When • Deadline for first round of applications already passed. • First new gTLDs expected Q1 2013

9. Domain names: new gTLDs #2 • Uncertainty: • How successful will they be? • How will search engines and users adapt to the new system? • .COM will remain the premium domain name space in at least the medium term • No visibility of what competitors are doing now • High costs of application and operation (estimated $500k to $1m over 1st 5 years) • ICANN has developed this for communities and investors: • trying to make this work for brand owners = square peg/round hole. • First round deadline for applications already passed • Action now? • Monitor new gTLDs in case action needed • Wait for 2nd round (whenever that may be): • Less expensive? • For now rely on trade mark protection mechanisms to fire fight problems!

10. New gTLDs predictions • March 2013 - first round of gTLDs awarded • May 2014 - second round of applications kicks off

11. Consumer Rights Act 2013 (?)-key points for advertisersThe evolving consumer rights landscape

12. Consumer Rights Act 2013-3 key aims • Implement Consumer Rights Directive (2011/83/EU) • Codify and simplify consumer rights legislation • Extend remedies available for breaches of consumer law including "unfair commercial practice" regulations

13. Consumer Rights Directive – when will it apply? • Applies to distance selling via the internet, phone, fax and mail order services • Also door-to-door sales and sales outside shops • Applies to data supplied in digital form • Computer programs, applications, games, music, video, texts irrespective of whether downloaded, streamed, accessed from a tangible medium or any other means • It will not apply to food consumables, financial services, timeshare and package holiday contracts • It will replace the Distance Selling Directive (97/7/EC) and the Doorstep Selling Directive (85/577/EC)

14. Consumer Rights Directive – main provisions…#1 • Cooling-off period: consumers will have 14 calendar days to withdraw from the contract without having to give a reason • Currently the statutory minimum is 7 working days • Refunds: time limit of 14 days for business to reimburse the consumer for the cost of the product AND standard delivery • Currently 30 days is maximum • Hidden costs and pre-ticked boxes: businesses must disclose the total cost upfront and get express consent of the consumer. Pre-ticked boxes for supplementary costs no longer permitted • Businesses will need to review the online shopping experience to ensure compliance

15. Consumer Rights Directive – main provisions…#2 • Surcharges on payment methods and premium hotlines: cannot charge consumers more for paying by credit or debit card than the cost to the business of using such payment means. Cannot charge consumers a premium rate for telephone calls in relation to the contract • Businesses which rely on these surcharges will need to reconsider their pricing model • Delivery and risk: businesses must deliver purchased goods within 30 days • Currently required by the CAP Code unless longer period agreed or appropriate • General consumer information must be provided to the consumer in a clear and comprehensible manner • These provisions should not concern most businesses as they represent standard practice

16. UK Consumer Rights Act – the dates and facts • Consumer "Bill of Rights" announced in September 2011 • July 2012 – October 2012: BIS consultation on the supply of goods, services and digital content • Likely to be put to parliament during 2013/2014 session • Directive implementation deadline 13/12/12 • Currently UK consumer law is contained within 12 different pieces of legislation. New Act will lead to the scrapping of or major reform to the existing legislation. • For example, consultation envisages substantial changes to Sale of Goods Act 1979, Supply of Goods and Services Act 1982 and UCTA 1977.

17. Consumer Rights Act 2013-extended remedies for misleading ads • BIS consultation November 2012 closes 31/12/12, aim: • Improving business compliance e.g. • provide training, appoint compliance officer, introduction of robust customer complaint handling scheme • Improving consumer redress e.g. • trader in breach to advertise or contact customers inviting applications for compensation • Increasing consumer confidence e.g. • public database naming and shaming offenders, inform all customers of breach and remedial action taken, allow early term'n of running contracts, promote switching or provide data held as per "midata" scheme

18. Consumer Rights Act-predictions • December 2013: Consumer Rights Act 2013 receives Royal Assent and after strong lobbying from stakeholders includes: • enhanced class action rights and • direct enforcement rights for advertisers available in respect of misleading advertising breaching the CPRs

19. Data privacy and marketing-seismic changes? • Draft EU Data Protection Regulation still under discussion • Current draft allows a lead-in time of 2 years after the measure is published • UK MoJ recently published a highly critical report and impact assessment following a consultation • Current lowlights for marketers: tightened consent definition, narrower "legitimate interests of data controller" gateway, higher penalties, potential global reach, wider "personal data" definition, compulsory data protection officers, extensive delegated powers etc etc

20. Data privacy and marketing-seismicchanges-timetable and predictions • Timetable: • Summer 2013: "trilogue" with EP, Council & EC • December 2013: vote in plenary • Predictions: • January 2014: despite intensive lobbying, the final Regulation is adopted with limited changes, including a reduction of the lead time to 12 months • January 2015: new Data Protection Regulation in force and supersedes Directive 95/46/EC

21. And watch out (possibly) forthese in 2013…. • January: DP Reg'n to cover personal data after death • February: more large fines imposed on spammers • March: new controls on PPI claim marketing • April: measures banning alcohol multi-buy promotions • May: legal backbone to "midata" programme • June: Gambling (Licensing and Advertising) Bill published • July: it is finally possible to notify with ICO online • September: CAP Code loses ban on under 25s in gambling ads • October: TUPE no longer applies to professional services • November: CPRs to extend to B2B and financial services ads • December:final judgment in M&S/Interflora paid-for links case favours M&S

22. Sum-up • All bets will finally be off in financial advertising control changes • EU privacy reform closure brings limited relief for marketers • Web users to finally start complaining about OBA and causing online advertisers headaches • Consumer Rights Act-new enforcement tools a worry for advertisers • ICO gets tough on marketers abusing privacy

23. Any questions? Stephen Groom Head of Marketing & Privacy Law Osborne Clarke London T +44 (0) 207 105 7078 M+44 (0) 207 105 7079 stephen.groom@osborneclarke.com www.marketinglaw.co.uk 22