Legal update December 2019/January 2020

Commercial

Ban by the Gambling Commission on consumers using credit cards to gamble

From 14 April 2020 gambling businesses will no longer be able to allow consumers in Great Britain to use credit cards to gamble. This ban is to attempt to offer extra protection to the vulnerable and will apply to all online and offline gambling products, apart from non-remote lotteries and will be in line with non-remote casino, bingo, adult gaming centre and family entertainment centre operators which cannot accept payment by an individual’s credit card already.

All online gambling operators must also participate in the multi-operator self-exclusion scheme GAMSTOP. This scheme means consumers can self-exclude from online gambling operators with one request as opposed to self-excluding from each operator individually.

Hotel price match promise was found to be misleading by the ASA and Booking.com is updating its presentation of prices

A price matching offer on a hotel's website was misleading and in breach of the CAP Code according to the Advertising Standards Authority (ASA). Information such as ‘Best Price Guarantee when you book with us’ and ‘Best Price Guarantee We promise you the lowest available price online, or we'll match it and give you five times the Intercontinental Hotels Group (IHG) Rewards Club points, up to a 40,000-point maximum’ was found to be misleading after a customer complaint. IHG Hotels said the above was conditional on a customer actually booking at the lowest available rate on the IHG website and IHG having verified the lower rate, by making a test booking within 24 hours of a consumer making a claim. Screenshots from customers proving availability at a lower rate was not acceptable to IHG. The ASA did not think that the conditions for making the claims were clear enough and thought that the conditions effectively contradicted IHG's promise of the lowest price available online, as the price offered to a consumer by a competitor’s site when making their booking with IHG could have changed by the time IHG carried out its verification process up to 24 hours later, in particular because the availability would have been reduced by the consumer having booked one through IHG.

Booking.com has also decided to change its pricing presentation by 16 June 2020 after talking to the European Commission and national consumer protection authorities. The website will now, amongst other things: make clear that ‘last room available!’ refers only to the offer on the Booking.com platform; will not present an offer as time-limited, if the same price will be available afterwards; and if an offer is described as a ‘discount’ there is a real money saving. Booking.com has also promised to display clearly the total price that the consumers will have to pay.

Online platforms and digital advertising interim report by the CMA published

The Competition and Markets Authority (CMA) published an interim report on 18 December 2019, relating to their study into online platforms and digital advertising. The study is looking at the nature of competition in markets from the viewpoint of online platforms that provide digital advertising services, particularly looking at market power in user-facing markets, consumer control over their data, and whether there were any harmful results of market power held by platforms in digital advertising markets. Both Google and Facebook have been found to have market power in their respective markets, and economies of scale and a lack of transparency which could lead to unfair advantage and unreasonable profitability in a competitive market. It is suggested by the CMA that a pro-competitive regulator regime or enforceable codes of conduct ensuring interventions to address specific sources of market power, more transparency, and giving consumers more control over data would help regulate the activities of online platforms funded by digital advertising. The deadline for the final report is 2 July 2020.

Corporate

A buyer of shares in a football club could recover under an indemnity in a Share Purchase Agreement (SPA)

The Court of Appeal reversed the High Court's decision in the case of a shareholder of a football club, by ruling that a buyer of shares in a football club was in fact entitled to payment under an indemnity against all losses from the club's aggregate ‘Liabilities’ in the SPA regarding the extent of the club's financial liabilities at a specified date. The Court of Appeal found that the High Court Judge had misunderstood the purpose of the indemnity and the terms on which the buyer had agreed to take over the club. The judge was found to have interpreted the definition of ‘liabilities’ to include only those liabilities that ‘related to’ the period up to 31 December 2016, excluding accrued liability where the benefit from that liability was provided after that date. The judge had based his decision on the commercial rationale for the exclusion of part of the club's accrued liabilities as being to ensure that the seller did not have to account for the cost of benefits accruing to the buyer after it purchased the club, but the purpose of the indemnity and the terms on which the buyer had agreed to take over the club was opposed to this.

A clause of a Share Purchase Agreement is determined as a covenant to pay and not an indemnity

The High Court looked at the proper construction of a clause in a Share Purchase Agreement (SPA) which required the seller to reimburse the buyer for 90% of payments arising from PPI mis-selling claims from customers. The seller denied any liability to pay. It argued that the reimbursement clause was in the nature of an indemnity obligation rather than a performance bond. The court looked at the facts and other terms of the SPA and ruled that on the ordinary meaning of the language used, the clause was not a contract of indemnity but was a covenant to pay, and the seller therefore had to pay, on demand, an amount equal to 90% of the claimed losses.

Data Protection

ICO provides guidance on timescales when complying with Data Subject Access Requests

The Information Commissioner’s Office (ICO) has updated its General Data Protection Regulation: Right of access guidance about timescales when a controller asks for clarification from the data subject. The start of the one-month time period for compliance is no longer paused until the controller receives the requested additional information. Instead the time will start to run from the latter of the date of receipt of the DSAR or receipt of proof of identification. Also, when responding to complex or multiple DSARs with an extended timescale of up to two months, the timescale is also no longer paused. This may be difficult for employers where a data subject delays in providing them with the required information/clarification, as they may not have long to compile a full response.

Employment

BBC equal pay claims

Sarah Montague, a BBC radio presenter, received a £400,000 settlement and apology from the BBC in 2019 after an equal pay claim, as her £133,000 salary was lower than that of her co-presenters. This follows an employment tribunal's decision earlier this month that Samira Ahmed's work on Newswatch was like, or of equal value to, Jeremy Vine's work on Points of View. Ms Ahmed made a claim for equal pay, as she was paid £440 per episode while Mr Vine was paid £3,000. The tribunal agreed that the roles were comparable. From 1 October 2012 and 30 September 2018 the tribunal found that there was no non-discriminatory reason for the difference in pay.  From 1 October 2018 onwards, the tribunal accepted that a non-discriminatory factor (Ms Ahmed became a permanent employee) explained the difference in pay. Ms Ahmed may now receive up to £700,000 in compensation, which is an important reminder to employers to be transparent when determining pay levels, particularly with similar or comparable roles.

National Minimum Wage and National Living Wage changes

The government has accepted the recommendations of the Low Pay Commission regarding increases to the National Living Wage (NLW) and the National Minimum Wage (NMW). From 1 April 2020 the NLW for workers aged 25 and over will increase to £8.72 per hour, the NMW for 21- to 24-year-olds will increase to £8.20 per hour. The NMW for 18- to 20-year-olds will increase to £6.45 per hour and the NMW for 16- to 17-year-olds will increase to £4.55 per hour.

The Employment Appeal Tribunal (EAT) ruled that a police officer had suffered direct sex discrimination by not being paid her London allowance during maternity leave.

The EAT ruled that a female police officer was directly discriminated against on the grounds of sex when the police refused to pay a London allowance while she was on maternity leave. The relevant police regulations set out that police officers were entitled to be paid this allowance whilst on maternity leave and a claimant who has been treated unfavourably on the ground of her pregnancy or maternity has been the victim of sex discrimination and does not need to, and cannot, prove that a man would have been treated differently in the circumstances. Again, employer’s should be mindful about what employee contractual and statutory entitlements are during maternity leave and ensure that correct payments and benefits are paid.

IP and IT

E-book supply is communication to the public.

The ECJ has ruled that the supply to the public, of an e-book downloaded for permanent use, was covered by the concept of communication to the public within the meaning of the Copyright Directive. This ruling is likely to be welcomed by e-book rights-holders, who will now in principle be able to stop their e-books being re-sold as ‘the principle of exhaustion of the distribution right’ under the Copyright Directive does not apply to e-books downloaded online for permanent use, under this ruling.

The Queen’s Speech

The points which are most salient for businesses arising from the Queen’s speech on 19 December 2019 include:

• European Union (Withdrawal Agreement) Bill (WAB) - The main purpose of the WAB is to implement the terms of any UK-EU withdrawal agreement into UK law.

• Trade Bill - Following the failure of the Trade Bill 2017-2019, to pass through Parliament before the end of the last Parliamentary session this will be similar but also emphasise: clamping down on late payments; strengthening the powers of the Small Business Commissioner; and reviewing the Gambling Act 2005, in particular looking at regulating online loot boxes and credit card misuse. The ‘National Infrastructure Strategy’ which will attempt to close the productivity gap between London and other parts of the country; accelerating fast broadband; internet safety; improving management of the UK's air space; to reform the railways, to ensure minimum rail services during transport strikes; and to ensure passengers can get home quickly and efficiently in the event of airline insolvency; and climate change initiatives will all be developed as part of this bill. 

• National Security and Investment Bill – This increases transparency and gives the government further powers to review and scrutinise as well as intervene in takeovers and mergers, where national security is a concern. This is to protect national security and to ensure that the UK benefits from free trade and investment. This will also prevent assets with national security implications being acquired by a hostile party, without the rest of the business being acquired. Practically speaking it is likely that a new notification system will be introduced where any transactions which may cause security concerns will be flagged up and investigated before it can progress to completion. The government is likely to be allowed to add conditions or where required block a transaction where there are real security concerns with sanctions for breach but also a right of appeal for parties to the blocked or altered transaction.

*Please note that this update does not constitute formal legal advice and should not be relied upon as such. Always ask a solicitor if you are unsure of how the law relates to your business*