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28 February 2017

Newsletter - Legal Issues 2017 – Thinking About Omnichannel

Omnichannel strategies are fundamentally changing our commercial environment.  With the vast number of choices available to customers, people are increasingly migrating to the brands/organisations that offer them the best user experience and increased control over their participation.  A seamless and effortless integration of both online and offline channels is one of the ways to accomplish this. 

Businesses need to do more than merely make sure the colour schemes match across devices; omnichannel is an alternative way of approaching customer engagement by using personalisation and data analytics.  Omnichannel strategy is not just limited to the retail sector, it is being put into use in a wide range of situations such as healthcare providers and the finance industry.

However, as is often the case, the law can potentially get in the way of the best ideas.  New regulations on the horizon, such as Geo-Blocking, may actually hinder rather than assist. Data collection, pricing, technology, privacy and appropriate business structures will be key legal themes in any Omnichannel strategy.

We have covered some of these areas in our top issues list below as well as highlighting some of the other topics that may impact you and your business this year. We will revisit a number of these issues throughout the year. In the meantime, please do not hesitate to contact us if you wish to discuss any legal issues arising in relation to your Omnichannel strategy or the topics covered.

BREXIT

We are expecting Brexit not only to continue dominating the newspaper headlines throughout 2017 but also to dictate the UK’s legal scene. While Brexit’s implications for commercial law are still essentially unknown, it is worth remembering that the vast quantity of UK commercial laws are not the result of EU initiatives and may therefore remain unchanged.

That said, we have identified areas which we expect to be affected (notably agency, privacy, e-commerce, consumer law, distribution, intellectual property and outsourcing) and will be keeping an eye on these throughout the year. In the meantime we have prepared a guide to some key contractual clauses to consider in both your existing agreements and those being entered into following the decision on 23 June 2016.

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GDPR

After years of discussions and negotiations, the new General Data Protection Regulation (GDPR) entered into force on 25 May 2016, and will be directly applicable in all EU Member States from 25 May 2018, following a two year transition period. The GDPR will replace the current Data Protection Directive 95/46/EC (Directive), as implemented in to UK law by the Data Protection Act 1998 (DPA). Businesses should use 2017 as an opportunity to prepare themselves for the pending applicability of the GDPR.

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GEOBLOCKING

New EU legislation to change the position on geoblocking is now on the horizon, following approval from the European Council on a draft regulation. The EU’s targeting of geoblocking was foreseeable because the EU principle of free movement for goods and services is inherently at odds with this practice, whereby an internet user’s geographic location is a basis for determining the level of access they are granted to a web page or service.

This can affect e-commerce within the EU because a customer may find that they are paying a different price for, or are completely blocked from, various varieties of online purchases, with the disparities introduced solely because of the customer hailing from or ordinarily being based in another Member State. Although the regulation is not yet in its final form, with the European Parliament being the next to review it, the Council’s draft represents a statement of intent on the restrictions which will eventually be imposed on businesses.

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DIGITAL ECONOMY BILL

The Digital Economy Bill (“DEB”) is currently going through the legislative process with the Government and is expected to receive Royal Assent in the Spring. It may, however be months before the various components of the DEB, including the Direct Marketing Code (a key requirement of the DEB), are adopted.

The main aim of the DEB is to improve both protections and internet connectivity for internet users. The measures introduced seek to modernise Britain’s digital landscape and ensure that Britain is ready for the ever-expanding digital economy. There are some key matters within the DEB that businesses should consider as they evolve their digital strategy and consider, for example, their approach to Omnichannel.

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E-PRIVACY DIRECTIVE AND REFORM

The European Commission (the “Commission”) conducted a study in 2015 and launched a public consultation in 2016 to review and update the electronic communication sector and e-Privacy Directive to reflect technological developments and to align e-Privacy laws with the General Data Protection Regulation ((EU) 2016/679). The current e-Privacy Directive (2002/58/EC) was first introduced in 2002 and later amended in 2009. It applies to the processing of personal data in connection with electronic communications services in public communications networks within the EU and has been adopted by all member states.

Whilst the Commission’s review was resisted by telecoms bodies who called for a repeal of the e-Privacy regime, leaked text from the draft e-Privacy Regulation in December 2016, and now, the published draft e-Privacy Regulation, confirms the Commission will be taking a more stringent approach to (amongst other things) online and direct marketing, the use of cookies and the processing of location data with a view to improving individual’s privacy and providing businesses with new opportunities.

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INADVERTENT ADVERTISING

Digital advertising has exploded over the last few years but with rapid expansion has come increasing reports of poor practices by unscrupulous ad agencies. Brands are being billed for placing adverts that consumers have never seen; and recently, attention has been drawn to the programmatic placement of advertisements on distasteful or unlawful websites. As a result brands and charities have found themselves inadvertently being associated with and featured on websites containing, for example, fake news, extremist content, counterfeit products or illegally uploaded films and music.

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