Twenty Ten

- 2010: an e-commerce year to remember -

The year kicked off with a victory for manufacturers of luxury products keen to protect their brands, when, in February, a Paris court ruled that eBay should compensate Louis Vuitton for facilitating the sale of counterfeit Louis Vuitton products. Although another case in which a UK court ruled that eBay was not liable for listing fake L’Oréal goods illustrated the battle of ‘the brand owners v counterfeiters’ is far from over, 2010 should be considered as a year in which copyright infringements and counterfeiting were taken more seriously than ever before.

Many countries, like the UK, France, Ireland and South Korea, passed new or updated laws aimed at combatting online piracy more effectively by creating a more defined framework for copyright breaches on the net. In the UK, the controversial Digital Economy Act (DEA) came into force in June and a highly symbollic copyright agreement with China - the biggest infringer - was signed. Enforcement is still considered to be one of the biggest challenges, so many welcomed, in November, the publication of the final draft of the Anti-Counterfeiting Trade Agreement, aimed at establishing standards on intellectual rights enforcement. The US, in the meantime, has taken its own approach and has, without a court order, started shutting down file sharing websites.

It was certainly also a year in which Google dominated the headlines. Its controversial AdWords policy, the data protection and copyright agreements with a number of countries and groups, and the announced investigation into possible abuse in the online search market in Europe all made the headlines. But it was not only bad press for Google: its advertising revenues rose to $25 billion this year.

And 2010 might go down as the year free online news saw the beginning of the end. In July, Rupert Murdoch put his collection of newspapers The Times, The Sunday Times and the Financial Times (FT) behind a paywall. Although unique readership numbers have fallen significantly - readership has fallen around 90% - it seems publishers are starting to see the lucrative side of it: in December, the FT reported The Telegraph Media Group (publisher of The Daily Telegraph) will launch a similar scheme in the New Year, with others expected to follow.
Television also made a digital jump forward. Google launched its Google TV service in November and the UK High Court ruled, in the same month, that the activities of a TV streaming website are covered by copyright law despite the fact that it is not a broadcaster itself.

In publishing, more books were sold online than in traditional bookshops and 2010 was the year of the ‘e-reader’. When the year kicked off, Kindles and Nooks sold impressively well on Amazon but the launch of the Apple iPad in April was an outright, unrivalled milestone. With three million devices sold in the first 80 days, it was undeniably the e-commerce hit of this year.

Published previously in E-Commerce Magazine, London 2010 (C) Copyrights apply

Winter
Icy temperatures, arctic winds and snow showers might disrupt many tube and train lines in Greater London - forcing thousands of commuters to find alternative transport or walk for miles through icy winds - it sure delivers some picturesque pictures and marvelous scenes. All around northern Europe temperatures have gone down and snow showers have been reported. This picture, taken by two unnamed students, is a scene in Finland. Winter has arrived early this year.

Future of the cheque in the UK

MPs: keep the cheque in the UK after 2018

A group of UK Members of Parliament (MPs), headed by Liberal Democrat MP David Ward, has launched a campaign to ‘save’ the cheque.

On 2 November, Ward introduced a Bill that would bring cheques under the consumer protection scope of the Financial Services Authority (FSA) and urged banks to re-think the proposals to abandon the cheque in 2018, introduced by the UK Payments Council (PC) in December 2009.

“[Abolishing the cheque] is a stitch-up by the banking industry, who have shirked every opportunity to modernise the system, and will be the main winners from its abolition”, Ward said on his website. “It is disgusting that a group with such vested interests in getting rid of cheques should be entrusted with this decision.”  

Ward, and a number of other MPs from different parties, have claimed that eliminating the cheque will have a major impact on small businesses and it could hit the elderly as well as visually impaired people.

Ward’s Bill will be discussed in Parliament in June 2011. In December 2009, the PC and its members voted to stop clearing cheques by 31 October 2018.

Published previously in E-Finance & Payments Law & Policy Magazine, November 2010. Copyrights apply

Pilot plan to harmonise payment infrastructure in Southern Africa

The Central Banks of 15 states in southern Africa will complete a pilot project to harmonise the payment infrastructures of the four countries with the ‘Rand’ currency within two years.

The Southern African Development Community (SADC) - an intergovernmental organisation which aims to improve economic integration - is built on the Single European Payments Area (SEPA) model, as Tim Masela, of the South African (SA) Reserve Bank, said on 25 October: “There is a common currency target for the region of 2018 and we want to make sure that any new infrastructure can support it. The experience in Europe is very useful”.

The pilot comprises of two phases. Firstly, the Central Banks of SA, Namibia, Swaziland and Lesotho will harmonise existing bank and payment systems. In the second phase, integration will be expanded to Congo and Zimbabwe.

“It’s an important move and very good for SA”, said Simon Cavill, Director of Strategy at Mi-Pay. “The first phase will be easy to implement as the countries have historically been close toSA, but it will be challenging to align countries with radically different political and economic structures.”

Not everyone thinks SEPA should be an example. “Let’s hope that SA keeps this as a business-led project and does not get tied up with politics and red tape like in the EU”, said Gary Wright, of BISS Research.

Cavill remarks: “I can see the value for SA, as the commercial powerhouse of the region, but what's in it for the smaller countries?”

Published previously in E-Finance & Payments Law & Policy, Michiel Willems 2010. Copyrights apply

UK: No harmonization of consumer protection at EU level

The UK has indicated it will oppose a strict harmonization of consumer protection legislation in Member States, the Department for Business, Innovation and Skills (BIS) said on 19 October.

"Minimum harmonization...would enable Member States to apply their own rules. The UK would be free to regulate this matter internally in domestic law", the BIS said in the 'Negotiating Line for the Consumer Rights Directive' Report.

The Response Report - the outcome of a consultation launched in July - makes clear the UK is not in favor of a stringent Consumer Rights Directive, which is currently being negotiated and will replace four existing Directives.

“The current EU legislative patchwork on consumer protection is overly complex and has its flaws", said Rohan Massey, Partner at McDermott, Will & Emery. "But in trying to harmonize, the EU runs the risk of removing protection currently given to consumers in certain jurisdictions. This is one of the UK's key concerns, which currently has one of the more robust regimes."

Jill Johnstone, of Consumer Focus, said: "UK consumers risk losing out if maximum, not minimum harmonization is adopted".

The European Commission (EC) believes strict harmonized legislation is necessary to increase cross-border online retail - last year, less than 2% of the total European retail trade. In August, when the EC launched a consultation about the future of e-commerce in the EU, it said 'a lack of confidence was holding back the development of the e-commerce market'.

“To increase cross-border trade in e-commerce, there needs to be greater standardization of legislation", agrees Massey. "But any attempt by the EU that results in a reduction of mandatory consumer protection will be met with strong political resistance locally."

Ben Allgrove, Partner at Baker & McKenzie, thinks the UK should not go its own way: "For online businesses, national regulation is actually a barrier. You need to consider and comply with 27 Member States' consumer protection regimes, which is costly to do".

Stephen Groom, of Osborne Clarke, believes enforcement should be on top of the agenda. "Enforcement is virtually ignored. There are still enormous disparities across the EU in how laws are policed and enforced." Groom continues: "How about a halt on any new laws at UK and EU levels until enforcement of existing consumer protection laws is given proper attention?"

Published previously in E-Commerce Law & Policy Magazine, London. Michiel Willems 2010. Copyrights apply.

World gone mad: 'Should this woman have an abortion? Vote now'

The fate of an unborn child might be decided by a number of anonymous online web users, after a married American couple set up a website inviting people to cast their vote on whether the woman should have an abortion.

Alisha Arnold and her husband Peter, who live in the American city of Minneapolis, are unsure if they can combine parenthood with full-time careers and have decided to let the public make the decision for them. Now Alisha is 17 weeks pregnant the decisive moment is slowly approaching: the last votes will be counted on December 7, two days before she reaches the 20-week cut-off for a legal abortion in the State of Minnesota.

They upload scans and pictures of the foetus regularly and doctors have told them it is a healthy boy. On her website, Alisha asked herself: “we vote on everything from president to American Idol, so why not to continue or abort a pregnancy?”

Visit www.birthornot.com to cast your vote

City life can be a lonely bitch

Yesterday night I watched a show on tv called Royle Family: behind the Sofa - on GOLD Channel - where they discussed a recent survey about family life in the UK. The presenter disclosed that family units in London are the most lonely and isolated of all 92 counties in the United Kingdom. Surprised?

According to the survey, more than 20% of London teenagers said ‘not to respect their parents at all’ and an equal proportion does not get along with siblings. Compare that to the north (Yorkshire, Cumbria, Durham, Northumberland) where a fifth beyond the age of 24 still live with their parents. And in the midlands (Leicestershire, Warwickshire, Derbyshire, Cheshire, Shropshire) this is even a third (34%).

In the south, however, more than 40% has left home by the time they turn 20 and that percentage is even higher in London. This surprised me, since the average London lifestyle is – by far – the most expensive in the UK, if not in the whole of Europe. Having said that, the presenter gave as one of the possible explanations that education levels in the north are much lower, and that more people in the south have a degree. People with higher education qualifications tend to move out sooner (for example, when they go to uni or for a job change) and, generally, earn more money - so they have the funds to move out.

In Newcastle or Preston, parents are ‘lucky’ compared to the south, more than 20% of northerners claim to visit - or be visited by - their parents every day, a figure that is less than 10% in the south. Overall, families in the north spend more time together and argue less frequently, the presenter continued. They also share more interests than people in the south.

Christmas: family time? With Christmas coming up in less than seven weeks, the research showed that northern family units will be spending the most time together, over 65% will spend the holidays in the company of their (extended) family, compared to less than 40% in the south. And it’s not just during Christmas, 60% of the northerners enjoy a family meal at least three times a week - in the midlands even 65% - compared to relatives in London, where only 1 in 3 has a ‘regular weekly family meal’.

The programme said the survey had merely focused on British-born residents with most of the extended family living in the UK. If the large immigrant, foreign and expat communities in the British capital – to whom I belong – were included in the examination, figures would have been even lower, since most of their families are based overseas, which makes it is impossible to ‘stop by for a chat’ or have a family meal three times a week.

While the presenter was busy making his slot remarks, I tried to justify this given fact by concluding that family time should be about quality, not quantity. A lame excuse perhaps, but it still works for me.

Royle Family: behind the sofa - every Wednesday at 9 pm - GOLD Channel

Time out (for US' online gambling industry)

Since 2009 there have been glimmers of hope the United States might move towards a legalisation of online gambling. Since the online market was outlawed in 2006, huge efforts have been made to bring back online gambling. 

Expectations in and outside the United States were raised with the introduction of two bills in Congress in the last 18 months. The Democrat Barney Frank submitted in May 2009 HR2276 and not long after that his fellow Democrat Robert Menendez introduced S1597. Both legislative pieces aim to bring online gambling activities back to the US and would make it possible for operators to re-enter this potentially lucrative market under strict requirements. 

Operators and businesses became increasingly hopeful on 28 July of this year, when the Financial Services Committee of the House of Representatives approved Frank’s Bill. Many in favour of regulation believed legalisation had become a serious possibility and though the financial climate – the US being desperately in need of funds and the federal government’s active search for new revenue sources – could be the final push to a ‘yes’ vote. 

Three months down the line, however, many experts believe it is unrealistic to expect any bill to succeed anytime soon. Speculation might have been building and a number of legislative proposals submitted, but the moment has passed.

With the mid-term elections in less than a month, the chance of any legislation being passed before the elections is practically zero. “I’m not optimistic”, Frank said last month, pointing out that the busy House of Representative Fall schedule simply does not allow a vote before the elections. 

If the outcome of the elections will indeed be a reflection of the current polls – Republicans are expected to win and the Democrats to lose their majority in both houses - things are not looking good for those in favour of regulation. Not one leading Republican has plans to overturn the legislation passed in 2006, the Unlawful Internet Gambling Enforcement Act, which banned online gambling in the US. 

Most Democrats ignore the issue or have spoken out against regulation, since many American voters believe (online) gambling to be immoral and see it as a dangerous spare time activity. After the elections, no heavyweight in US politics - Democrat or Republican - is expected to put regulation of online gambling on top of the agenda anytime soon, certainly not in the run-up to the presidential election in 2012. It is simply not a priority. Frank and Menendez will become lonely voices at Capitol Hill and their bills will in all probability be buried in the bottom drawer. Realistically, that means the next opportunity for a serious attempt to regulate will most likely not take place until the Spring of 2013.

The information in this editorial might be outdated, since it was first published in World Online Gambling Law Report magazine, London 2010. Copyrights apply.

Business unusual

China is well-known for the trade of exotic animals, and parts of the animals. Think of rhinoceros horn or bear bile. Now sea turtle guitar picks are being offered too. Last week Qing Song was convicted by a Californian Court to violate US laws, because she had imported turtle shells of the hawksbill turtle as well as guitar picks from China. Judge Breyer has ruled she has to spend 10 months in prison, pay a $2000 fine for her remarkable business activities and has been forbidden to ever sell the animal - or parts of it - again.

The Hawksbill turtle is very rare and hardly seen. It is considered to be one of the most endangered turtle species in the world and is listed under the Endangered Species Act in the United States. They are considered to be 'extremely endangered' - one step above being extinct in the world.

http://www.ticklethewire.com 2010 (c)

Changing channels

Google’s announcement this month, that its new online TV service will go live on 1 November, should be seen as an important day for the future development of television. On 4 October, the internet giant reached agreements with most major US channels - such as HBO, CBS, NBC and Cartoon Network - to broadcast their shows on Google TV. Under the agreements, NBC will provide news, HBO drama and comedy and Amazon Video on-Demand will offer access to around 75.000 movie titles.

Many experts see this move as television’s long-awaited online breakthrough. The time viewers just watched broadcasts passively could soon be over. Online channels allow viewers to interact and connect with many of their favourite web services, so it comes as no surprise that Boo-Keun Yoon, Vice President of Visual Display at Samsung, recently said that Google TV “is no doubt the future of TV".

For Google, the TV service is a new way to sell advertising, and television companies aim to capitalise on growing demand for content that combines internet features with TV programming. Selling products related to a popular show or its participants is a goldmine for advertisers.

With the global reach of the internet and behavioural advertising methods, online channels have the potential to change the TV advertising landscape forever, but it will have legal implications, too. It raises issues regarding the applicable law: is it that of the country where the server is based, where the studios are or where the shows are made? Operating from a foreign jurisdiction, for example, can have huge advantages for television businesses. What will OFCOM’s role in the UK be if most Britons watch foreign-based online TV channels?

And countries with a licence fee - such as the UK, Holland and Italy - will have to review their definitions if they wish to maintain the tax in such a new TV environment. Current UK laws require that viewers need ‘to be covered by a licence [to] watch TV online at the same time as it is being broadcast on conventional TV`. What if there is a delay of five minutes, or new online channels start broadcasting shows that are not shown on conventional (UK-based) TV stations at all?

As long as new online TV channels do not breach any copyrights, the influence of current UK legislation – such as the Digital Economy Act - is limited. Perhaps it is slowly time for the UK Government to start thinking about an ‘online TV licence regime’, with a key role for the national internet service providers who, after all, grant online viewers the access to watch. Conventional is suddenly so yesterday.

Published previously in E-Commerce Magazine, London, October 2010. Copyrights apply.

Mario Vargas Llosa

Today, it was announced that the Peruvian writer Mario Vargas Llosa has won the Nobel Prize in Literature.

The Arequipa-born writer, who once ran for President in Peru but lost the elections in 1990, is one of the most acclaimed writers in the Spanish-speaking world, a man of letters who also braved the violence and political divisions of Peru and had to courage the enter the political arena in a time that assassinations, kidnappings and disappearances were not uncommon. Some critics consider him to have had a larger international impact and worldwide audience than any other South American writer. Many of Vargas Llosa's stories are influenced by the writer's perception of society in Peru and his own experiences as a native Peruvian.

Years ago, I must have been in the summer of 2006, I read one of his best known books, The Feast of the Goat, and enjoyed every page of it. The book is set in the Dominican Republic and portrays the assassination of the Dominican dictator Rafael Leonidas Trujillo, and its aftermath, from two distinct points of view: during and immediately after the assassination itself, in May 1961; and thirty years later, in 1996.

In my opinion, the Nobel Committee made a fantastic choice, and Vargas Llosa is one the most admirable Peruvians ever lived.

Picture: San Francisco Chronicle, copyrights apply

Industry divided over mobile payment plans in Holland

Industry experts have given a mixed response to plans by a consortium of Dutch banks and mobile phone operators to establish a nationwide mobile payments system by 2012.

On 9 September, Dutch banks ABN Amro, ING and Rabobank, and mobile phone operators T-Mobile, KPN and Vodafone signed a letter of intent to create a single, harmonised mobile payments system in the Netherlands. ‘It is technically and commercially feasible to introduce m-payments in the Netherlands. In 2012, it will be possible to pay at the check out [of shops] with your phone’, the consortium said in a statement.

“It is the first time that major banks and phone operators in a European country have all joined forces with regard to mobile payments”, said a Spokeswoman for ING Bank.

Quinten Kroes, Counsel at Allen & Overy, said: “With all three network operators and major retail banks on board, the new consortium has all the players needed to make m-payments really take off on the Dutch market”. Bart van Reeken, Partner at De Brauw Blackstone Westbroek, added: “This puts the telecom providers on top of customer data. It facilitates targeted marketing, may transform operators into advertising partners and raises interesting data protection issues”.

Dag-Inge Flatraaker, of the European Payments Council, believes it is key to ensure cross-industry cooperation in the mobile payments area: “This initiative will contribute to an evolution towards a Single Euro Payments Area for mobile payments. The Dutch initiative must be seen as an important step in this direction”.

Many experts, however, believe success is not guaranteed. “I am sceptical about any announcement such as this”, said Trevor La Fleche, Senior Research Analyst at IDC Financial Insights. “Payment mechanisms in Europe need to be more or less universal. It would be a disaster for every country in Europe to develop its own mobile payments scheme.”

Security is another concern. “It will be interesting to see whether [the consortium] will be able to convince consumers and retailers of the security of the new system”, said Peter Eijsvoogel, Partner at Allen & Overy. “The conditions of the security risks involved will play an important role.”

But Andrew Newsham, Spokesman for Rabobank, insists that consumers have nothing to worry about: “The payment software itself is located in a secure part of the SIM-card. No payment information is sent over the mobile network”.

Michiel Willems 2010. Copyrights apply. Published previously in E-Finance & Payments Law & Policy magazine.

New round of tube strikes in London

Londoners on their way to work this morning - including me - were faced with another 24 hours of tube strikes. Millions of commuters were forced to look for alternative transport as most of the London underground tube lines were closed, suspended or delayed. Buses were packed, taxis in demand and many turned to bikes or went by foot. Below an impression of the morning spectacle at Waterloo station, together with Victoria, Euston, Kings Cross, Farringdon, Paddington and London Bridge the main hubs in the British capital.

Below: Pimlico station - on the Victoria line - is one of the hundreds of tube stations closed for the public today.

The public is losing its last bit of respect for Union leader Bob Crow, who is the mastermind behind the recent wave of tube strikes. A recent poll by the Evening Standard suggested that most Londoners do not (longer) sympathise with the strikers.

Pictures: copyright Evening Standard and Daily Mail (2010).

Picture of the week

A cameraman tries to capture a shark up close and personal. 'Ocean of fear'. 

Copyright Doug Perrine / Seapics.com / LATimesblogs.com, 2007

Industry sceptical about UK-China copyright agreement

The UK and China have signed an agreement that will see both countries work closely together on copyright issues. On 3 September, the UK Intellectual Property Minister, Baroness Judith Wilcox, signed the Memorandum of Under-standing on Strategic Cooperation on Copyright (MoU) with Liu Binjie, the Minister of the National Copyright Administration of China. Both countries agreed to seek coordination on copyright issues, exchange ideas and best practices, and improve IP laws.

Many experts are sceptical about the impact of the MoU, which defines itself as ‘a general framework for bilateral cooperation’. “I doubt whether the agreement will have any impact on copyright enforcement”, said Lewis Ho, Partner at Simmons & Simmons in Shanghai. “Websites in China blatantly make films and other copyrighted work available to the public. Some  websites even receive funding from venture capital and are seeking approval to float on the stock exchange.”

Rico Calleja, Consultant at Calleja Consulting, said: “UK companies should not expect an instant improvement in protection of their IP in China and should continue to take a cautious approach”.

But a spokesperson for the UK Intellectual Property Office, insists that “the MoU is binding for both parties and reducing online piracy is certainly a very important aspect [of the agreement]”. 

“Any initiative to improve the protection of IP through international cooperation in combatting counterfeiting and piracy must be welcomed”, said Andrew Tibber, Partner at Burges Salmon. “While there do not seem to be any concrete proposals as yet, a programme for raising awareness of the legal framework for protecting copyrights in China would give British businesses the confidence to expand into what is still perceived as a risky, but potentially lucrative arena.” 

With the MoU, China anticipates to improve its business image. “This is the latest in a series of developments helping to position China as a safe trading ground for innovators”, said Adrian Tombling, Attorney at Withers & Rogers. “In October last year, the People’s Congress announced amendments to its country’s IP regime, bringing it into line with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs)”. TRIPs was established by the World Trade Organisation (WTO) in 1994 and sets minimum IP standards for WTO Member States.

 

In China, summer 2010

 

This article was previously published in E-Commerce Magazine, London 2010. Copyrights apply, also for Chinese