Running a Sweepstakes in France is Less Misérables

It’s not every day that one gets to observe a non-U.S. jurisdiction abandoning frustrating, idiosyncratic requirements on sweepstakes promotions, but – sacré bleu! – we’ve got one to report.

For several years, international marketers have listed France among the jurisdictions included in their international sweepstakes and chance-based promotional games by conforming to certain unique French requirements.  Because of a recent development under French law, we have been advised that certain French requirements that are arguably inconsistent with Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market (the “Directive”), have been abandoned.  In particular, this change will mean the following for international marketers:

  • First, promotional sweepstakes offering prizes on the basis of chance do not need to include reimbursement instructions for postage or Internet connection fees.  This requirement has been deemed to be inconsistent with the Directive as long as the incentive is not so large in relation to the purchase option so as to “distort” the “economic behavior” of an average consumer.
  • Second, the requirement that the official rules be submitted to a huissier prior to advertising the promotion is now a recommended action but is not required.  It is still recommended (as with contests of skill) because it helps to have an “official” version of the official rules filed with an impartial third party in case there is any question as to what the rules said at the time the promotion was launched.  However, it is no longer required because such a requirement is inconsistent with the Directive.

Liberté!

However, do not go overboard with the champagne.  Many unique legal aspects under French law may still apply to a specific promotion.  In particular, French data protection laws have actually tightened over the past few years, often making filings with the CNIL necessary.  Therefore, it makes abundant sense to continue to carefully vet rules with international promotions counsel before launching a multi-jurisdiction sweepstakes.

(Thanks to Michel Béjot and Caroline Bouvier at Bernard Hertz Béjot in Paris for bringing this news to our attention.)

CAP Releases Revised Promotional Rules in the UK

On May 1, 2015, the Committee of Advertising Practice (CAP) released a set of amended Sales Promotional Rules contained in Section 8 of the CAP Code.  This follows a public consultation aimed at amending a number of rules to bring them up to date with the current consumer protection landscape.  For a list of key changes made to the rules in Section 8, please read our firm’s recent client alert.

A 30-Minute Data Breach Drill for GCs

At times, the two most frightening words in the English vocabulary are “data” and “breach.”  Much to the chagrin of companies across the country, data breaches are quite the rage these days.  It seems as if every week a new company falls prey to a cyberattack resulting in the release of secure information.  To help clients address the problem, our Intellectual Property, Information & Innovation team has prepared a 30-minute breach drill for GCs.  To learn more about the nine steps a GC can take in the event of a data breach, read our firm’s latest client alert.

European Commission’s “digital single market” strategy attempts to break down online barriers in the EU

In the European Union (EU), online barriers prohibit EU citizens from receiving goods and services that are commonplace to U.S. citizens.  When I travel to Miami, for instance, I am able to use my Netflix streaming subscription to catch up on my favorite shows.  The same cannot be said for a citizen from the UK who travels to Spain; due to European copyright laws, Netflix is required to negotiate rights for its shows on a country-by-country basis.

On Wednesday, May 6, the European Commission (EC) unveiled its strategy to break down these barriers by creating a European “Digital Single Market” (DSM).   To find out more about the EC’s proposal and what the measures mean for the EU media industries, please see our Client Alert.

Negative Reviews: Pamphleteering or Defamation?

Does the First Amendment trump the right of an aggrieved merchant who seeks to unmask the identity of the authors of scathing reviews?  That’s how many framed the key issue in Yelp! Inc. v. Hadeed Carpet Cleaning, Inc., which was appealed to the Virginia Supreme Court.  Did the court answer the question as to whether the alleged malicious reviewer should remain anonymous?  Spoiler alert: you’re going to need your Civ Pro hornbook for this one.

For more details on the case and the Virginia Supreme Court’s ruling, read the latest post on our new firm blog Technology Law Dispatch.

Knowing Your Customer a Little Too Well

I hate shopping.  I know what I want and I do a surgical strike.  In and out; no soldier left behind.

But most normal people browse a bit.  That’s where Nomi Technologies came into the picture.  Nomi’s technology allows retailers to track consumers’ movements through their stores.  How does it work?  According to a complaint issued by the Federal Trade Commission and announced on April 23 in conjunction with a settlement, Nomi placed sensors in its clients’ stores.  Those sensors collected the media access control address (MAC address) assigned to consumers’ mobile devices.  Although Nomi took steps to de-identify the MAC addresses prior to storing them, the method used – hashing – still resulted in an identifier that is unique to a consumer’s mobile device and can be tracked over time, according to the FTC.  And, that was the FTC’s hook.

The complaint alleged that Nomi tracked consumers both inside and outside their clients’ stores, tracking the MAC address, device type, date and time the device was observed, and signal strength of consumers’ devices.  Nomi provided aggregated information on how many consumers passed by the store instead of entering, how long consumers stayed in the store, the types of devices used by consumers, how many repeat customers entered a store in a given period, and how many customers had visited another location in a particular chain of stores.

Yes, there was a way to opt out.  But, according to the FTC, that method was not made readily available to consumers.  The FTC complaint alleged that no opt-out option was available at retailers using the service, and consumers were not informed of the tracking taking place in the stores at all.  The opt-out method resided solely on Nomi’s website.  Under the consent agreement, Nomi agreed to provide an in-store mechanism for consumers wishing to opt out of tracking, and agreed that consumers would be informed when locations were using Nomi’s tracking services.  The FTC also alleged that Nomi’s privacy policy misrepresented the opt-out mechanism by stating that there would be an opt-out method at stores using its services.

This settlement represents the FTC’s first case against a retail tracking company.  It is important because it deals with a growing area of retail marketing.  With consumers more and more predictably connected to the Internet by means of their handheld devices, the technological options available to retailers to learn about potential and actual customer behavior in and around their stores is exploding.  Also, this case is important because of the way “anonymous” data – further anonymized through “hashing” – was not anonymous enough.  Despite the FTC’s facile explanation in its press release that the case turned on a misrepresentation in the respondent’s privacy policy, the hard work to come will be in figuring out what sort of “anonymization” will actually suffice according to the FTC.

Ooh, I like that hat.  But, you already knew that, didn’t you?

GALA to Host Forum on U.S. and Canada Advertising Law

Join members of the Global Advertising Lawyers Alliance (GALA) for a free program on important advertising law issues to consider when advertising in the United States and Canada.  Reed Smith’s Stacy Marcus will be part of a list of featured speakers, which includes representatives from the National Advertising Division and Advertising Standards Canada, covering key areas of regulatory enforcement, advertising in social media, sweepstakes and promotions, talent and talent union issues, and other important advertising law developments in the United States and Canada.

The program will offer CLE credit and will be held on separate dates in New York City and Toronto:

Toronto Program
April 20, 2015
2:00 p.m. to 4:30 p.m. (Cocktail reception to follow)

New York City Program
April 23, 2015
9:00 a.m. to 11:30 a.m.  (Breakfast will be served starting at 8:30 a.m.)

For program details and to RSVP, visit GALA’s event page.

Is Your Social Media Influencer or Blogger an Employee or an Independent Contractor? What Companies Need To Know Before They Engage Bloggers and Other Independent Contractors

With the first quarter of 2015 behind us, many companies are already deeply engaged in social media campaigns.  Many of these campaigns include the engagement of professional bloggers or other persons with social media influence to promote corporate brands through social media.  These individuals are typically classified as independent contractors, but are they really employees? This article describes the risks and rewards of classifying bloggers (and any other workers) as independent contractors instead of employees, and ways to manage that risk.

Background:  What Is an Independent Contractor?

Broadly speaking, a worker may be classified as either an “employee” (an individual to whom statutory wage payment and other legal protections apply) or an independent contractor (to whom such protections generally do not apply).  Although the vast majority of the U.S. workforce falls into the former category, independent contractors serve an important function in the economy and offer businesses many upsides over employees.  To take advantage of these benefits without risking the downsides, including “misclassification” litigation and other pitfalls, it is important for companies to understand the differences between employees and independent contractors from a legal standpoint.

Typically, a company should engage independent contractors for a discrete period of time to perform a task or series of tasks outside the scope of expertise of the regular, employee-workforce.  Unlike employees, contractors should not complete employment applications or W-4 forms, and they should not receive the company’s employee handbook.  In addition, contractors should not be shackled by the same restraints that encumber employees:  companies should ensure that their independent contractors remain free from direct supervision and control, may negotiate their own rates, retain latitude to perform their assigned task(s) in any manner and on any schedule they choose (so long as their work product is delivered by company-required deadlines), and are permitted to perform work for multiple businesses at any given time.  Where applicable, independent contractors also should provide their own tools, transportation, and the like.

Despite these general principles, determining whether a worker is properly classified as a contractor warrants a forum- and fact-specific analysis, as is more fully discussed below.

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2013 SAG-AFTRA Contracts are Here!

At long last, the 2013 contracts are available. Although hard copies of the books are still being printed, the first digital versions of the Commercials Contract and Radio Recorded Commercials Contract are available. The digital documents will be updated with an index and reposted by the JPC and Union in the coming weeks.

Two Rights of Publicity Decisions Explore the Boundaries of Commercial Speech in Commemorating Public Figures

Two recent rights of publicity cases illustrated the parameters of using a public figure’s name, likeness, identity or image for commercial purposes, without consent for commemorative purposes. But when does commemoration cross the line into unlawful use of one’s right of publicity?

Jordan v. Jewel Food Stores, Inc., No. 10-c-340 (N.D. Ill. Mar. 12, 2015)

In the more recent case, Jordan v. Jewel Food Stores, Inc., the grocery chain Jewel-Osco featured an ad in a Sports Illustrated’s commemorative issue congratulating basketball legend Michael Jordan on his 2009 induction into the Hall of Fame. Though the ad did not feature an image of Jordan, it depicted his #23 sneakers with the text, “Jewel-Osco salutes #23 on his many accomplishments as we honor a fellow Chicagoan who was ‘just around the corner’ for so many years,” referencing its slogan, which was reprinted below its logo: “Good things are just around the corner.” Jordan sued Jewel-Osco for violation of his statutory right of publicity, and Jewel-Osco sought contribution from Time Inc., which solicited the ad.

In a previous ruling for the case, the Seventh Circuit conclusively held the Jewel-Osco ad had a commercial purpose under the First Amendment because it prominently featured Jewel-Osco’s logo and marketing slogan, “which are creatively and conspicuously linked to Jordan in the text of the ad’s congratulatory message.” However, the Seventh Circuit remanded for consideration of the substance of the claims and made clear that it wasn’t resolving the state law issues. In the current case, Jordan merely asserted that the Seventh Circuit had resolved the issue, thus, his motion for summary judgment failed. As for Jewel-Osco’s third-party contribution claim, Time argued that the grocery store chain had no right of contribution because the right of publicity is an intentional tort, and Illinois law prohibits intentional tortfeasors from seeking contribution. Though Jewel-Osco claimed that its violation of Jordan’s right was not malicious (and thus was unintentional), the court disagreed and awarded Time with summary judgment. In other words, the court clarified that advertisers have the potential to violate someone’s right of publicity with a use that is intentional but innocent.

Rosa and Raymond Parks Institute for Self Development v. Target Corp., No. 2:13-CV-817 (M.D. Ala. Feb. 9, 2015)

In an earlier opinion, Rosa and Raymond Parks Inst. for Self Dev. v. Target Corp., the court held that retailer Target Corp. was protected under the First Amendment for selling plaques bearing the name and image of civil rights icon Rosa Parks. In 2009, Target began to sell collage-style plaques commemorating the Civil Rights movement, depicting various photos and quotes of Rosa Parks. The Parks Institute, a nonprofit that owns the name and likeness of Rosa Parks, alleged that Target was using her name and likeness for its own commercial advantage in violation of state laws against violation of the right of publicity, misappropriation and unjust enrichment. In response, Target moved for summary judgment, using the First Amendment as a defense.

Under the fair use doctrine, the First Amendment protects the unauthorized use of a person’s name and likeness if the use has a redeeming public interest, news, or historical value. In rendering its decision, the Alabama court stated, “as both parties agree, one cannot talk about the Civil Rights movement without including Rosa Parks,” and that “by including a picture of Rosa Parks and Martin Luther King, Jr. alongside stylized renderings of the words ‘Civil Rights’ and ‘Change,’” the plaque’s creator sought to educate and inspire, “while telling the important story of Rosa Parks’ courage during the Civil Rights movement.” Thus, the court awarded Target summary judgment and upheld the fair use doctrine of the First Amendment.

Social and historical context made a difference in the Rosa Parks case, but it played no role in the Jordan case. Both Jewel-Osco and Target attempted to gain commercially from commemorating past icons, and the context of that commercial association made all of the difference.

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