Competition

Geo-blocking Regulation | What does it mean for your business?

After considerable negotiation and consultation, the final text of the geo-blocking Regulation has now been agreed and published in the Official Journal of the European Union. The Regulation will stop most companies from preventing access to national versions of their websites within the EU.

Published on 2 March 2018, the Regulation takes effect from 3 December 2018 and addresses “unjustified” geo-blocking and other forms of discrimination based on customers’ nationality, place of residence or place of establishment.

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Government to change UK merger thresholds as a short-term measure to protect national security

On 15 March 2018, the Department for Business, Energy and Industrial Strategy published the UK government’s decision to amend the UK merger control jurisdictional thresholds, as proposed in the October 2017 consultation. This will extend the powers of the Secretary of State to intervene in mergers that might raise national security concerns in specific areas of the economy.

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Post-Brexit regulation of State aid rules: UK government set out a framework for the future

In a letter dated 28 March 2018, Andrew Griffiths MP, Minister for Small Business, Consumers & Corporate Responsibility, explains the UK government’s position on how State aid rules and responsibilities will be managed post-Brexit, in the clearest terms that we have seen to date.

It will be reassuring to UK and European businesses alike that the UK government expressly recognises that continued State aid regulation is in the best interests of all sides post-Brexit. In principle, the CMA is well placed to take on the role as regulator of State aid in the UK, given its understanding of markets and its independence from government. However, the role of a State aid regulator may place the CMA in the political firing line like never before.

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Consumer protection

Digital Content Directive expected to be finalised in H1 2018

The proposals aim to fully harmonise across the EU a set of key consumer rights and remedies concerning contracts for the supply of digital content or services (such as streaming music or video) and to reduce legal fragmentation in the area of consumer contract law, so – hopefully – reducing the costs of compliance for businesses.

These rules will break new ground in the EU, offering the first set of consumer law covering mobile applications and software.

Platform to Business Regulations mark the first piece of horizontal “platform-specific” legislation by European Commission

The P2B Regulations are aimed at creating a fair and predictable environment for businesses using big online platforms, although in practice they go beyond this and impose some potentially very onerous obligations on platforms.

For example, certain provisions could severely restrict an online platform’s ability to introduce changes to their terms of service quickly; require the platform to implement cumbersome and potentially expensive complaints handling procedures (taking up time and resourcing); and increase the risk of class actions.

The P2B Regulations are expected to be published in the coming weeks.

Directive for the Online and Distance Sale of Goods to give European consumers more rights when they shop online and offline

A proposal was initially introduced by the Commission in December of 2015 to fully harmonize rules across the EU for consumers who shop across borders online.

The proposal has recently been amended to cover sales of physical goods in an online and offline context (as opposed to just online sales, as was initially envisaged). One of the changes sets a legal guarantee period on products of one year, which is less than is currently the case in certain territories. In effect, this will water down existing consumer rights, critics argue.

New Deal for Consumers propose substantial reforms to consumer law, including GDPR-level fines

Following a major evaluation of the EU consumer law directives, the European Commission has announced its long-awaited “New Deal for Consumers”, which proposes a number of key changes, including:

  • GDPR-level maximum fines for breaches of consumer law that cause “mass harm”;
  • Group actions by authorised consumer bodies;
  • New consumer rights for free digital services; and
  • More transparency for consumers in online marketplaces.

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Consumer finance

FCA publishes final rules and guidance on persistent debt and earlier intervention

On 26 February 2018, the FCA published its policy statement (PS18/4) containing the final rules and guidance on persistent credit card debt and earlier intervention.

The new rules were added to CONC 6.7 as from 1 March 2018. Lenders will need to ensure that they have appropriate policies and systems in place in order to be fully compliant with the new requirements by 1 September 2018.

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Getting affordability right in consumer credit

Jonathan Davidson (FCA Director of Supervision – Retail and Authorisations) recently delivered a speech on “Getting affordability right in consumer credit” which had three key takeaways for firms in relation to their creditworthiness practices.

First, the FCA views firms whose business models are predicated on selling products to customers who can’t afford to repay them, as neither acceptable nor sustainable. Second, firms cannot just rely on backward-looking credit checks given that the current economic environment is precarious. And third, a successful business model relies on a firm having a healthy culture. Firms need to ensure that they do not just complete a box-ticking exercise in order to meet compliance requirements, but apply common sense and judgement in relation to treating customers fairly and putting them at the heart of what they do.

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New consumer credit rules and guidance on staff incentives, remuneration and performance management

The FCA has published its final rules and non-handbook guidance on staff incentives, remuneration and performance management to help firms carrying out consumer credit activity, identify potential risks to achieving good customer outcomes in relation to how they pay and manage staff.

Consumer credit lenders and brokers will need to review their staff remuneration and incentive practices in view of the new requirements, to ensure that adequate policies are in place to detect and manage the risks relating to performance driven pay. Firms will need to be able to demonstrate to the FCA, if required, that they have effective governance and controls in place to monitor, identify and mitigate such risks.

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FCA motor finance update: broker incentivisation an area of concern

Last year, the FCA announced that it would be undertaking a review into the motor finance market, given its continued growth in recent years, to ensure it works effectively and minimises the risk of consumer harm.

In March, the FCA published an update on its review of the motor finance market. Its review was focussed on a number of key issues, including broker incentivisation where the level of commission is linked to the interest rate charged, transparency of information provided to consumers and whether firms are lending responsibly.

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FCA issues warning to insurance sector on transparency at renewal time

The FCA has issued a warning to the general insurance sector, which in some areas, is not fully implementing the transparency rules designed to improve the information provided to consumers at renewal time and ultimately lead to more shopping around.

The FCA has restated that it expects firms and senior managers to redress the situation immediately. The threat of enforcement action appears to be implicit.


Data protection

GDPR (I): Article 29 Working Party publishes guidelines

In the run up to the GDPR coming into effect on 25 May 2018, the Article 29 Working Party of national data protection regulators has published revised guidelines on consent, transparency, breach notification and automated decision-making and profiling.

GDPR (II): Information Commissioner’s Office publishes guidance and materials

The Information Commissioner’s Office has published an array of guidance and materials for businesses preparing for the GDPR, including:

  • The ICO ‘Guide to the GDPR’, which contains checklists, ‘in brief’ summaries and more detailed guidance on issues such as consent and other lawful bases for processing data;
  • guide to the data protection fee regime, to help data controllers understand why there is a new funding model and what they’ll be required to pay from 25 May 2018. For controllers who are registered under the 1998 Act, the old data protection fee continues to apply until their registration expires; and
  • A series of webinars and podcasts that offer guidance about topics ranging from data protection issues arising from the use of surveillance technology to common data protection errors the health sector.

Challenges to overseas data transfer mechanisms

While the UK government has made clear its desire to secure a long-term deal to protect the transfer of data between the UK and the EU, litigation is on-going regarding one of the alternative arrangements for transferring data between the EU and non-EEA countries. In the case of Data Protection Commissioner v Facebook Ireland and Maximillian Schrems,the Irish High Court has asked the CJEU to rule as to the validity of standard contractual clauses for legitimising transfers of personal data outside the EEA (known as the “Model Clauses”). The intended referral to the CJEU does not mean that the Model Clauses are now invalid. In the meantime, Model Clauses should still continue to be used where otherwise appropriate.

In a separate action by Maximillian Schrems against Facebook Ireland (Maximillian Shrems v Facebook Ireland), the CJEU has given judgment that the courts of Austria, where Mr Schrems is domiciled, have jurisdiction to hear the case. This is on the basis that Mr Schrems has the status of ‘consumer’, even though he has published books and given lectures for remuneration in connection with the enforcement of his claims, and that some of the claims that he is pursuing have been assigned to him from other individuals.


Environment

Environment Agency consultation response on charging proposals: new charging scheme effective 1 April 2018

The Environment Agency has published its response to its charges consultation, which was launched in November 2017. The new charging scheme affects the environmental permitting, WEEE, COMAH and EU Emissions Trading schemes, amongst others, and came into force on 1 April 2018.

Minimum Energy Efficiency Standards effective from 1 April 2018

The MEES make it unlawful from 1 April 2018 for landlords to grant new tenancies or renew existing tenancies for commercial or residential properties which have an Energy Performance Certificate rating of ‘F’ or ‘G’. The MEES also give residential tenants rights to make energy efficiency improvements to their property.

Landlords will need to consider taking remedial action should their properties fail to meet these standards. Failure to take such action may result in devaluation of any such property, or enforcement action if the landlord chooses to let the property without making the required improvements.

Waste Enforcement Regulations to put pressure on occupiers and landowners

The Waste Enforcement (England and Wales) Regulations 2018 came into force on 29 March 2018 and serve to strengthen the powers of environmental regulators to address waste crime in England and Wales.

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ClientEarth, UK air quality plan and German diesel ban: latest air quality news

There have been two recent landmark court decisions on air quality in the UK and Germany:

  • in the UK, environmental NGO ClientEarth defeated the UK government for a third time in its ongoing battle against the legality of the government’s air quality plans; and
  • in Germany, the courts ruled that German cities have a legal right to ban diesel engines in order to tackle poor air quality levels.

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Employment

Key employment law changes this month: what do employers need to know?

A number of employment law changes have come into force this month, including significant changes to the taxation of termination payments, which in essence treat all employment contracts as though they contain a payment-in-lieu-of-notice clause. This means that the basic pay the employee would have received during the notice period will be taxed as earnings (that is, subject to income tax and employer’s and employee’s national insurance contributions).

Other changes include: increases to statutory maternity, adoption, paternity and shared leave pay rates; a rise in the maximum compensatory award for unfair dismissal, and a delay in changes to childcare allowance.

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Food law

Acrylamide Regulations now in force

The EU Acrylamide Regulations came into force on 11 April 2018, although much-anticipated guidance from the EU is still awaited. The Regulations impose obligations on food manufacturers and retailers to take mitigation measures to reduce acrylamide levels in certain carbohydrate based foodstuffs to a level below specified benchmark levels.  The benchmarks are performance indicators rather than safety thresholds. 

All Food Business Operators will need to amend their Food Safety Management System to reflect the new mitigation requirements and implement the sampling and analysis required. Food manufacturers should also expect enquiries from business customers asking for confirmation that all of the required mitigation measures in place.

Pending the final EU guidance, UKHospitality has produced some draft guidance, which has the support of the Food Standards Agency.

Tighter restrictions on BPA in food contact materials

EU Regulation 2018/213 is now in force, and takes effect for all new product placed on the market from 6 September 2018. The effect of the Regulation is to lower the specific migration limit of BPA contained in plastic packaging materials that migrates into food. The restriction is also extended to coating materials used to line food and drink cans. A written declaration of compliance must now accompany products containing coating materials all the way through their manufacturing journey to the point of retail.

The new Regulation also extends the 2011 ban on the use of BPA in baby bottles by prohibiting the use of BPA to manufacture infant ‘sippy’ cups.

Increased transparency on scientific studies

The European Commission is proposing a targeted revision of General Food Law Regulation, plus eight pieces of sectoral legislation, with the aim of increasing transparency for consumers by giving them greater access to scientific information relating to food standards. The measures include the creation of a common European Register of commissioned studies, to guarantee that companies applying for an authorisation submit all relevant information, and do not hold back unfavourable studies. 

In addition to changes to the General Food Law Regulation, expect changes to the legislation on GMOs, feed additives, smoke flavourings, food contact materials, food additives, food enzymes and flavourings, plant protection products and novel foods. The target date for implementation is mid-2019.


Media and Broadcast

Portability Regulation in force as of 1 April 2018

The Portability Regulation requires providers of online content services, including online television, video games and music services, to allow their subscribers to access their service whilst temporarily in another EU Member State. Practically speaking, this will allow EU citizens to take their digital subscriptions, like Amazon Prime and Netflix, with them on holidays and business trips outside their home countries.

Several questions remain unanswered though, such as “what constitutes being temporarily resident”?

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AudioVisual Media Services Directive: amendments almost finalised

Amendments to the AVMSD, which among other things impose more onerous obligations on on-demand programme services and regulate video sharing platform services, are expected to be agreed during the first half of this year.

Pay TV investigation rumbles on

The European Commission’s long-running antitrust inquiry into a number of US movie studios, as well as Sky’s UK arm, continues to rumble on.

The Commission charged Disney, NBCUniversal, Paramount Pictures, Sony, Twentieth Century Fox, Warner Bros and Sky UK in July 2015 with breaching EU competition rules. The Commission is looking at contractual clauses that stop Sky UK from broadcasting its pay-TV channels into other European countries. The contracts, they say, prevent the broadcaster from accepting subscribers based in other European countries, something that allegedly contravenes EU single market rules.


Regulated procurement

Overseas companies bidding for UK public contracts need to register beneficial ownership on public register

The UK government has set out its thinking on how the forthcoming beneficial ownership register for bidding on public contracts will work ahead of the draft legislation which is due to be published by July 2018.

On 22 March 2018, the government published its response to its 2017 call for evidence. The response confirmed a number of policy decisions about the new register for contractors.

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Government inquiry set to examine public outsourcing following Carillion collapse

Following from the widely publicised collapse of Carillion earlier this year, the Public Administration and Constitutional Affairs Committee has launched an inquiry into the future of public outsourcing, which is set to consider (amongst other things) the risks to the public sector of concentrating a large number of contracts within a small group of very large companies.

The inquiry could result in guidance being issued to the public sector and/or legislative changes.

New Procurement Policy Notice increases visibility of subcontracting opportunities in public supply chains

The government Crown Commercial Service has issued a new PPN (“Supply Chain Visibility”), introducing new measures to increase the visibility of subcontracting opportunities in public supply chains and provide greater visibility of supply chain spend.

From 1 May 2018, all procurements for contracts that are valued at above £5million p.a. and that are subject to the Public Contracts Regulations 2015 must require prime contractors to advertise on Contracts Finder any subcontract opportunity arising within that contract that exceeds £25,000. Those prime contractors must also report their spending on subcontracting, in total and directly to SMEs or VCSEs, in delivering that contract. These requirements must be included as terms in the contract awarded to the prime contractor.

Blue passport contract throws UK public procurement law into the spotlight

UK procurement law has been brought into focus following the Home Office’s procurement for a new contract to produce new blue British passports, which resulted in an award of the £490m the French-Dutch company, Gemalto UK. The current British supplier, De La Rue, has manufactured British passports since 2009 and has voiced strong objections in the press that the manufacture of a British icon should not be moved offshore.

The Home Office agreed to extend the standstill period during which it could not sign the contract after the award decision has been announced, following objections from De La Rue. However, it was announced on 18 April that De La Rue was not pursuing a challenge as they had been advised that “the grounds for overturning the decision are insufficiently strong to justify this course of action.”

Office for Civil Society publishes guide on including social value considerations in public procurement

The Office for Civil Society published an introductory guide to the Public Services (Social Value) Act 2012 on 5 April 2018, aimed at those in commissioning, policy-making or operational roles who are conducting procurements on behalf of contracting authorities under the Public Contracts Regulations 2015.

The guidance contains an explanation of the provisions and impact of the 2012 Act and provides advice on including social value considerations in contract specifications. The guidance also includes practical examples and sample wording covering social, economic and environmental requirements, and a list of links and further resources.