opaque pricing of essential services, including telecoms and energy;
protection for small business, including under franchising and unfair
contract requirements; and
customer loyalty schemes.
A new focus is on emerging issues in advertising and subscriptions on
social medial platforms, especially for younger consumers.
In announcing the 2o19 priorities, Chair Rod Sims stated that the ACCC
expects 3 significant cartel investigations to be referred to the Commonwealth
DPP. The ACCC will also be occupied with the Consumer Data Right, where pilots
and generic data sharing are expected to be in place in July, with consumer
data to be shared by February next year.
2018 came and went in a flash. France celebrated glory in the FIFA World
Cup in Russia; Banksy sold his ‘Girl With Balloon’ painting for $1.86 million
before the artwork shredded itself seconds after the gavel dropped; and the
online world was captivated by the World Record Egg. And as we say goodbye to
summer and settle into the working year, why not take the chance to reminisce
on some of the more important developments of 2018, and look forward to those
that 2019 has in store?
Looking
back on 2018
New obligations were enforced under the European Union General
Data Protection Regulation (the GDPR). While the GDPR is an EU
regulation, the obligations have a wide reach, applying to all Australian businesses who have an
establishment in the EU, offer goods & services to the EU, or monitor the
behaviour of individuals in the EU.
As part of the government’s safe harbour and insolvency reforms, we saw
the introduction of the ipso facto insolvency reforms by way of the Treasury Laws Amendment
(2017 Enterprise Incentives No.2) Act 2017. The reforms apply
to contracts entered into on or after 1 July 2018, affecting the ability of
contracting parties to exercise termination, enforcement or other rights that
are triggered by a company restructuring or insolvency.
The European Parliament voted in favour of introducing the
controversial EU Copyright Directive, a legislation designed to better meet
the needs of copyright protection in the internet age. The proposed directive
caused significant global debate around the detrimental effects of Articles 11
(the Link Tax) and 13 (the Meme Ban), headlined as the ‘death of the Internet’.
The ACCC highlighted its hard stance against franchises attempting to
contract out of their obligations under the Franchising Code of Conduct and the Competition and Consumer Act.
The ACCC’s case against Husqvarna Australia highlighted the importance of all
companies that appoint dealers, distributors, licensees or similar, to confirm
whether their contracts are in fact franchise agreements.
A Victorian Supreme Court cast some doubt over the enforceability of contractual
provisions that attempt to limit the period in which parties can claim for
misleading or deceptive conduct. This arose in the case of Brighton Australia Pty Ltd v Multiplex Constructions Pty Ltd [2018]
VSC 246, where the court considered the enforceability of a
contractual provision requiring claims (including for misleading or deceptive
conduct) to be made within 7 days.Justice Riordan, deciding in contradiction to
a number of NSW decisions, ruled in favour of the “no exclusion principle”,
stating that allowing the enforceability of such time limitations on claims
would be against the public policy underpinning the provisions of the
Australian Consumer Law (ACL).
Some areas to watch in 2019
Discussions over the EU Copyright Directive continue, with negotiators
for the European Parliament aiming to finalise the directive shortly. However,
negotiations have broken down, with the three-way discussion between Council,
Parliament and member states derailed over the exact wording over Article
11 and Article 13. Consequently, the “trialogue” discussion that was set to take
place on 23 January was cancelled. With upcoming EU elections in May,
there likelihood of any closure on this matter in the near future is low, with
a final vote likely to take place under the next parliament.
The Telecommunications and Other Legislation Amendment (Assistance and
Access) Act 2018, commonly referred to as the AA Bill, was passed in
December of last year. The Bill’s aim is to compel various companies, especially
those in communications industries, to assist Australian security and law
enforcement agencies by allowing access to encrypted communications they
believe may contain plans for illegal or terrorist activity. The implications
of the Bill will be an interesting area to watch throughout the year, with a
number of people, especially those within the tech and start-up communities
expressing their concerns.
On 10 December 2018, the ACCC released its Digital Platforms Inquiry Preliminary Report. The ACCC’s
report is founded on questioning the role and accountability of the global
digital platforms (such as Facebook and Google) in the supply of advertising,
news and journalism in Australia. The final report addressing these issues will
be due on 3 June of this year.
There has been some debate globally and in Australia regarding the “hipster antitrust” laws, questioning the standards of
competition law. The current foundation of competition law in Australia is
focused on consumer welfare. However, concerns have been raised that this
standard is too narrow and does not allow for prosecution of some types of
conduct that some commentators believe competition law should cover.While this
debate is likely to continue throughout the year, ACCC Chairman Rod Sims has
reinforced Australia’s consumer welfare position, expressing their opposition
to the introduction of broader interest considerations of public policy into
competition law enforcement.
McDonald’s, Subway, KFC – all well-known global giants in both fast-food
and franchise systems.
These companies, among many others around the world (not just within the
fast food industries), are easily recognisable to us as franchisors.
However, franchise systems come in many shapes and
sizes, and there are some franchises that are not quite as well-known and
obvious as the ones above. Companies may even try to distance themselves from
the F word, and associated franchise regulation, by telling everyone (or at
least the parties contracting with them) that they are expressly not franchisors.
This situation can be seen in the recent ACCC action against the
Australian subsidiary of Swedish power-tool powerhouse, Husqvarna Australia.
Husqvarna and the ACCC
Earlier this year, the ACCC took action against Husqvarna.
The ACCC was concerned that the company was in
breach of the Franchising Code of Conduct (Code) and the
Competition and Consumer Act (Act). Husqvarna had
told its dealers that their “dealership agreements” were not franchising
agreements and, consequently, they were not entitled to protections for
franchisees under the Code.
The ACCC also argued that the company was likely to have contravened the
Act as a result of making misleading representations and that the dealer
agreements contained unfair contract terms.
… and swims like a franchisor …
In the result, Husqvarna admitted that categorising its agreements in
the way it had, ‘probably’ did in fact mislead the dealers. To resolve the
issue, Husqvarna also agreed to rewrite its agreements to ensure they complied with
the Code and the Act. Also, the company agreed to enter an undertaking with the
ACCC that it will not enforce any unfair contractual terms in the existing
agreements.
Define: “Franchise Agreement”
An agreement will be covered by the Code when:
A party, having substantial control over a
business, grants another party the right to carry on that business;
The business is associated with a specific brand
name or trade mark; and
The other party is required or agrees to pay for
the right to use the brand and operate the business.
If an agreement satisfies all of the above, it will be considered a
franchise agreement and will therefore be covered by the Code.
Importantly, a franchisor cannot simply attempt to waive or exclude the
mandatory obligation to comply with the Code and the relevant protections for
franchisees.
The Husqvarna case provides an important lesson for all companies that
appoint dealers, distributors, licensees or similar, highlighting the
importance of carefully assessing your agreements to ensure whether they may be
considered a franchise agreement.
As Mick Keogh, the ACCC Deputy Chair, put it: “if it looks and smells
and appears to be a franchise agreement, it’s considered to be one,
irrespective of what the franchisor says.”
Are you a franchisor or franchisee?
If you are a business concerned that your
agreements may be considered a franchise agreement, or if you are considering
becoming a franchisee and would like to know your protections under the Code,
please contact us.
Earlier last month the European Parliament voted in favour of the EU
Copyright Directive (known more formally as ‘Directive on Copyright in the
Digital Single Market’), proposed legislation designed to better meet the needs
of copyright protection in the Internet age.
The directive is an attempt at amending the imbalances between the large
digital corporations and the content creators who use these platforms to share
their work. The aim is to implement a more rigorous process for protecting
works against copyright infringement, while also providing a more efficient way
to distribute earnings to rightsholders and reduce the ‘value gap’ between
creatives and the big players in the tech world.
With piracy and the misuse of copyright being one of the ubiquitous
consequences of the digital era, updating copyright protection laws would be
something to get behind and celebrate, right?
Well…
While those in the creative industries, such as publishers, music
labels, and individual creatives have thrown their support behind the
Directive, many others, especially those in Silicon Valley, are rallying in
strong opposition of the proposed laws; extreme opposers even heralding the
“death of the Internet” as we know it.
Two specific articles of the directive find themselves at the heart of
the polarising debate, namely, Articles 11 and 13.
Article 11
Article 11, aptly nicknamed ‘the Link Tax’, is designed to allow
publishers of news content to request online platforms and news aggregators to
obtain licences before they are able to share any of their publications. The
obvious players finding themselves in the cross-hairs of this article are the
larger platforms such as Google and Facebook. However, while individual and
non-commercial use has been exempted from the law, there is concern the article
will have broader implications, especially on smaller websites who wish to
publish snippets and links to articles and who may be unable to afford the
required fees.
Will this be the end of the Internet as we know it?
Article 13
Article 13, dubbed the “upload filter”, is the more controversial of the
two.
The article is aimed at holding platforms that host user-generated
content (such as YouTube) liable for any misuse of copyright that may result
from any material uploaded by their users. Essentially, it means these
platforms can be sued directly by rightsholders for infringement.
While the current method of policing the misuse of
copyright is by responding to complaints by rightsholders, and removing any
infringing content accordingly, the directive will require these platforms to
take “effective and proportionate” measures to prevent unauthorised
works from being uploaded.
“But YouTube has over 300 hours’ worth of video content uploaded every
hour. How could they possibly find and stop all the infringing content from
being uploaded?” you ask. It is exactly this practicality of complying with
Article 13 that has proved one of the more contentious points of the debate.
It is argued that the only possible way to
implement this process of prevention is by using automatic filtering technology
capable of scanning through every single piece of content and
stopping any content it recognises as copyrighted material in its tracks. Easy
enough, right?
While it might not be a significant burden for the giants of the tech
world, like Google, YouTube, and Facebook, who have the finances to develop and
implement such technologies, its effect on smaller platforms appears to be more
problematic; with some contending it will hinder the growth of digital
platforms in the EU which will be unable to cope with the article’s
requirements.
Just as concerning is just how efficient such filtering technology can
be. It has been queried how the technology will be able to recognise and
distinguish copyright infringement from other authorised or legal uses of
copyright, such as parody or satire. This worry has given the article another
common nickname: the “Meme Ban.”
For those not familiar, memes are often created by using still images
(commonly taken from copyrighted works such as photographs, films, or
television shows) and layering text over the top for comedic effect or
expression of an idea. While they are most often created without the author’s
consent for use of an image, they are still currently considered legal under EU
law. Accordingly, there are serious concerns that if the filtering technology
required by Article 13 is unable to distinguish legal use from infringement,
content such as memes will mistakenly be flagged as infringement.
So, while memes may not be technically banned as the nickname suggests,
they may likely still be flagged and killed off amongst the other infringing
uploaded content.
What happens next?
The proposed legislation still faces one more round of voting in January
2019 before it will receive final approval. Many believe that, after the
successful vote last month, it is very unlikely the legislation will be
defeated in the new year.
What remains to be seen is in fact, however, is just much of a
disruptive impact the directive will have on the Internet both in the EU and
around the world.
When running a business,
you will inherently find yourself in competition with other businesses and
companies in your industry or market area.
However, it is not
uncommon to find your best employee has decided to move on to work for a
competitor; nor is it rare for an employee to resign with ambitions to start
their own business in direct competition to you.
So, what can you do when a
valuable employee suddenly becomes the competition?
Restraint of trade clauses
To protect themselves in
the event of an employee’s exit, many Australian businesses regularly include
restraint of trade clauses in their employment agreements.
Employers may use these
clauses to try to prevent former employees, as well as contractors or
suppliers, from:
Competing
against the former employer;
Soliciting
clients; or
Poaching
other employees.
Restraints are often also
used to protect the employer’s or customer’s confidential information, in
conjunction with standalone confidentiality clauses.
A reasonable restraint of trade clause can help
protect your business
Validity of restraint clauses
Restraint clauses are
legally presumed to be void, as it is considered contrary to public policy to
unreasonably prevent a person from lawfully obtaining gainful employment.
However, there are some
circumstances in which the court may override this presumption and find a
restraint clause to be valid and enforceable. The key principle is
reasonableness.
Reasonableness
A restraint clause will be
considered ‘reasonable’ when it restricts no more than is reasonably necessary
to protect the employer’s legitimate commercial interests.
An employer does not have
a legitimate interest in merely protecting themselves against competition as
such. Instead, the employer must demonstrate special circumstances that justify
the need for the restraint.
These circumstances may
include:
The
scope of the employment;
The
nature of the employer’s business;
An
employee’s connection to clients;
Access
to confidential informational or trade secrets; and
Whether
the employee received any compensation or remuneration for the restraint.
Employers will also often
specify both a restraint period and a geographical area for which the clause
applies. However, the court will consider whether the duration and reach of the
restraint goes beyond what is adequate in protecting the employer’s interest.
In Pearson v HRX Holdings,
the Federal Court found that a lengthy restraint against HRX co-founder, Mr
Pearson, was reasonable.
HRX, an HR company, sought
to enforce a restraint on Mr Pearson preventing him from working within the HR
industry for 2 years.
The court held the
restraint was reasonable because:
Pearson
was vital in building and retaining the company’s client base, and was
considered the ‘human face’ of the company;
He
had access to all the company’s confidential information;
The
two-year period reflected the average client contract length and gave the
company reasonable opportunity to renew these without competition from Mr.
Pearson; and
The
clause was negotiated and specifically tailored to Mr. Pearson, and in exchange
for the restraint, Mr. Pearson would receive his salary for the restraint
period as well as an 8% shareholding.
By comparison, in Just
Group v Peck, the restraint clause was determined to be
unreasonable.
Just Group attempted to
enforce a restraint preventing Ms Peck, former CFO, from working with their
competitor, Cotton On.
The clause attempted to
restrain Ms Peck for 2 years from carrying on “any activity, the same or
similar to” her role with Just Group in Australia and New Zealand. The clause
also referred to a list of 50 brands Ms Peck would be prevented from working
with.
The court determined that
this restrained went beyond what was required to protect Just Group’s
legitimate business interests, considering that:
“Any
activity” undertaken by Ms Peck as CFO was likely to be similar in any CFO role
or similar position;
The
clause was too broad and prevented Ms Peck from working with any other fashion
brand or retailer, including non-competitors; and
The
list of 50 brands included a majority that were not in competition with Just
Group.
Just Group had given
enough evidence proving Cotton On was a competitor, and if the clause had been
more specific towards the brand, the restraint may have been enforceable.
However, the court held the annexure was to be read as a whole and could not be
re-written later in attempt to restrain Ms Peck from working with a specific
competitor.
These cases highlight the
importance of restraint clauses being drafted to be specific to an
organisation’s precise business interests.
Summary
If you are an employer or
customer wanting to include restraint of trade clauses in your agreements, it
is important to remember that the reasonableness of a restraint of trade clause
is determined by the specific nature and circumstances of your business and the
individual employee or contractor.
If you would like more information on restraint of
trade and confidentiality clauses to protect your business, contact
us.
You’ve put time and thought into a
great idea, invested in R&D, brought your idea to market – and now you find
a competitor marketing the same idea. What can you do?
How can you protect your idea?
The different aspects of intellectual
property can help to an extent, but the issue of copying a concept can become
complex.
Copyright protects the original material expression of an idea, rather than
the idea itself. Unless your competitor copied your original artwork, wording
or code, copyright won’t assist – for example, if you have had an idea for a
scheduling program, and a competitor saw your idea and released a scheduling
program which doesn’t use any of the original coding or graphical elements of
your program, you won’t be able to make a copyright claim.
What
about trade marks? Have you applied for trade mark protection
of your product’s distinctive name? If the competitor used your name or a
substantially similar name to promote similar products, you can make a claim
based on your registered trade mark.
Patents protect inventions. They must be new to the market. If you think
that your idea may be patentable, consult a patent attorney – but you must keep your idea confidential until the patent
application is filed. If you have publicised it yourself, it may no longer be
patentable. You can use confidentiality agreements where you need third parties
to develop your invention. Also, take practical steps to protect confidentiality
– limit distribution and keep information in secure files.
The law
of passing off and consumer protection law
can help where the competitor is making their offering look like it is, or is
associated with, yours. For example, your competitor might be marketing
compatible goods which have the look and feel of your brand, or suggesting that
they are your authorised distributor or licensee.
If none of these will help in your
specific situation, there are still practical steps you can take:
– make sure that you have all the
relevant variations of your domain name so that there is no chance that an
unscrupulous competitor can pick up similar names to direct traffic to their
own website;
– make sure you have your domains set
to auto-renew, or diarise renewal dates, so that you don’t accidentally drop
your domain and have it picked up by your competitor;
– ensure that your website security
is strong so that you reduce the risk of losing customers if your website is
offline;
– make sure you are actively
marketing on all relevant social media channels;
– if you are using a name or logo
that is distinctive, apply for a trade mark, including in relevant overseas
markets you plan to expand to;
– once you have your trade mark,
ensure you diarise renewal dates;
– keep a record of your marketing
activities, including promotions, press releases and media coverage, in case
you need to demonstrate your reputation in the market in future years; and
– ensure that your concepts are kept
confidential, including using effective confidentiality agreements, until they
are ready for release.
If you
have any questions about how to protect your ideas, contact
us.
Like us,
you may at first have read straight past the headlines of recent articles about
the “ipso facto” changes in the context of the safe harbour reforms. However,
on further exploration it’s clear that it will be important for businesses and
their commercial advisers to be aware of this upcoming legislative change.
The ipso
facto changes and safe harbour changes, both relating to insolvency, are both
included in the recent package of enterprise incentive reforms as part of
the National Innovation and Science Agenda.
Safe
harbour
Directors have long been subject to
strict requirements preventing them from allowing a company to trade when
insolvent, meaning that companies in financial distress had to promptly appoint
an administrator or liquidator.
The safe harbour reforms under the
Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Act 2017 will
protect directors from personal liability, but allow the company to continue to
trade and incur debts, where the directors start developing a course or courses
of action that are reasonably likely to lead to a better outcome for the
company than immediate administration or liquidation. The company will need to
meet employee entitlement, tax and other statutory requirements.
The goal of these reforms is, in
part, to attract investment, and experienced directors, to new businesses in
the start-up economy, and to allow businesses to trade out of early difficulties.
Rights
triggered by insolvency (“ipso facto” rights)
As part of the package of enterprise
incentive reforms, the new “ipso facto” regime will commence on 1 July 2018.
Ipso facto rights are rights under a
contract that allow Party A to take action on the occurrence of a specified
event; they can be distinguished from rights that arise on Party B’s breach.
In this context, we are talking about
Party A’s rights to take action when Party B becomes insolvent. Common rights
include:
terminating;
suspending or stepping in;
calling on a bank guarantee or other security;
setting-off; or
cancelling or changing credit terms.
In the past these have been seen as
sensible rights for Party A to have in case of Party B’s insolvency. For
customers, they allow an orderly transition to a new supplier before the
supplier stops performing altogether. On the other side, they allow suppliers
to minimise their losses when a customer looks likely to collapse owing funds.
Under the enterprise incentive
reforms, as Party A you will not be able to exercise ipso facto rights arising
from your Party B’s:
voluntary administration;
receivership;
a scheme of arrangement; or
financial position, where it is subject to one of the reasons above.
The
legislation includes anti-avoidance provisions which cover reasons that, in
substance, are contrary to the new rules. Likely areas to be caught here
are a breach of financial covenants, like
debt to equity ratios or net tangible assets. In some circumstances Party B
may be able to prevent you from exercising other rights, such as a termination
for convenience right, that you have chosen to exercise solely because of Party
B’s financial position.
You will still be able to exercise
rights for an actual payment default or breach of obligations to perform.
Your rights are stayed during the
period of the insolvency process, but cannot be reactivated in respect of the
original issue once the stay period is over.
There are exceptions where your Party
B is a foreign entity which becomes insolvent, or your contract is governed by
overseas law. Some additional exceptions will also be prescribed by regulation
– these are likely to be banking and financial markets contracts.
What
should you do?
The reforms are not retrospective. If
your contract is in place before 1 July 2018 and continues to run into the
future, your contract will be grandfathered and you will still be entitled to
exercise rights triggered by insolvency.
For contracts which are made after 1
July – including contracts which expire and are then renegotiated after 1 July
– you will need to review your processes in 2 key areas:
avoid the risk of accidentally exercising these rights, if they have been
included in the contract, without your Party B’s agreement. Although there are
no legislative penalties, you will run the risk of breaching the contract
yourself (potentially a repudiation entitling your Party B to make a claim
against you) if you try to terminate for insolvency when you are not entitled
to do so.
review your credit terms and how you will react to early warning signs
of insolvency in the future. It may be too late to wait to act until there has
been an actual contract breach, so suppliers may react to these changes by
allowing shorter credit terms overall, and customers may need to place more
focus on developing back up options for when a supplier collapses.
If termination and step-in rights for
insolvency are important to your business, you should also consider:
taking steps to keep current contracts on foot, rather than allowing
them to expire and then renegotiating, and
whether, under your contract, each new order is treated as a separate
contract or as part of the original, grandfathered contract.
Thanks
to Scott Mannix at Maddocks for an excellent recent
presentation on this important issue.
Many Australian businesses who deal
with customers based in the US and UK will be faced with contract clauses
requiring compliance with the US Foreign Corrupt Practices Act (FCPA) or the UK
Bribery Act.
There is a lot of doubt and disagreement about the way that these laws
apply to conduct outside the home jurisdiction and whether Australian businesses
should accept these contract clauses.
Here are some key points to know if
you are confronted with a clause like this.
Coverage
Anti-bribery and corruption (ABAC)
laws focus on 2 key areas:
corruption of public officials; and
bribery in the private sector.
Australia
Australia has its own anti-bribery
and corruption (ABAC) requirements. Specific requirements include:
State and Territory legislation applying to bribery of public officials
and private individuals;
Criminal Code (Commonwealth) offences for bribery of Commonwealth
officials;
Criminal Code offences for bribery of foreign officials (with some
application to overseas conduct); and
false accounting offences where a business falsely records bribes as
legitimate expenses.
Australian laws also catch “grease”
payments, also known as facilitation payments. These are payments to
public officials to speed up or smooth out an approval which would have
happened anyway, and are distinguished from payments to change an outcome.
Grease payments are only permitted if they meet certain criteria, including
prompt, accurate records.
The FCPA catches all US entities
including their overseas subsidiaries; US subsidiaries of overseas entities;
overseas entities which issue securities in the US; and overseas entities which
take steps towards the corrupt conduct in the US.
It covers corrupt gifts and payments
to foreign public officials – defined very broadly – for the purpose of
obtaining or retaining business.
Foreign public officials would
include, for example, a doctor in a state hospital, or a government official who
also acts in a private capacity where the corrupt conduct occurs.
There is no materiality threshold so
small gifts are caught – the test is the purpose of the payment or gift.
Controversially, the FCPA does not
apply to grease payments, on the basis that they do not change the outcome.
These may still be prohibited under the local laws where the conduct takes
place.
UK
The Bribery Act covers the bribery of
any person to obtain or retain business or a business advantage. Unlike the
FCPA it applies to private sector as well as public sector conduct.
The Bribery Act covers both making
and taking bribes, and a foreign public official is defined more narrowly than
in the FCPA.
It applies to overseas conduct of UK
firms and their subsidaries and emphasises a compliance culture with strict
liability corporate offences (that is, there is no requirement to prove the
company meant to commit the offence).
There is no exception for grease
payments, but the Ministry of Justice has released guidance suggesting that prosecutors
will exercise discretion where the company:
has a clear policy;
has issued guidance to staff;
is monitoring compliance;
is recording gifts;
is taking proper action to inform local governments; and
is taking practical steps to curtail grease payments.
Where
does this leave Australian suppliers?
Both US and UK companies (and their
Australian subsidiaries) are obliged to do supplier due diligence to avoid
liability for ABAC issues. For the FCPA, for example, this is understood to
include doing business with reputable third parties who are acting in
compliance with the FCPA, and this leads to contractual requirements for
compliance in Australian supply contracts.
Many Australian companies are
naturally reluctant to agree, in a contract, to be caught by overseas
legislation that would not otherwise apply to them. It is important to
recognise, though, that the customer may have very limited discretion on these
issues, meaning that these clauses can be a negotiation roadblock.
Possible compromises to offer include:
compliance with your own ABAC policies;
compliance with the Criminal Code and applicable State and Territory
legislation;
compliance with detailed obligations stated in the contract which equate
to, but don’t refer to, the overseas legislation; or
an obligation to assist the customer with its own compliance.
If, as will often be the case, the
customer insists on an express reference to the overseas legislation, then
you’ll need to review the detail against your existing legal obligations and
your own ethics policies.
If you
would like advice on a specific ABAC clause, contact
us.
The Telecommunications Sector Security Reforms were
enacted and are now in a 12 month implementation period. These reforms impose
obligations on carriers and carriage service providers to take steps to ensure
the security of networks and notify breaches, and provide powers to the
Attorney-General to issue directions relating to security risks.
Business gained useful guidance on the issue of unfair contract terms in
small business contracts with a case in the waste management area which provided a
detailed review of some common, and some less common, standard terms.
Consultations closed in December on a draft bill to implement aspects of the
Government’s response to the Productivity Commission’s review of Australia’s IP
arrangements.
A controversy in relation to the Olive Cotton Award highlighted issues around
copyright, commissions and collaboration.
The Full Federal Court dismissed Vodafone’s application for judicial review in
relation to the ACCC’s decision not to declare a domestic mobile roaming service.
If a domestic mobile roaming service had been declared, this would have allowed
carriers to access Telstra’s regional networks in areas not covered by their
own networks.
Areas to watch this year:
With mandatory data breach notification coming into
force later this month, and the EU General
Data Protection Regulation taking effect in May, 2018 is the
year of privacy compliance for Australian businesses. Check out more
details here and ensure that your privacy compliance
systems are up to date.
Also in Europe, the Trade Secrets Directive, which harmonises trade
secrets protection, will be implemented by member states by the middle of the
year.
The ACCC has foreshadowed its 2018 priorities, including criminal cartel
enforcement and deterrence. In an interview in the AFR, Chairman Rod Sims suggested that there would be 3
to 4 cartel actions in 2018, including the possibility of penalties for
executives. This follows the ACCC’s successful actions in financial services and in the shipping industry, with a further shipping case to be heard in July.
Other ACCC priorities mentioned in the interview include bank interest
rate decisions, and media sector mergers.
On the IP front, submissions on the Copyright Amendment (Service Providers) Bill, which
would extend safe harbour provisions to educational and cultural institutions,
libraries, archives and organisations assisting people with disabilities, close
on 30 January.
All businesses that are currently
subject to the Privacy Act will have new mandatory data breach notification
obligations from 22 February 2018.
With new
obligations under the European Union General Data Protection
Regulation (EU GDPR) also applying to many Australian businesses, now is the
time to finalise your updated privacy procedures.
Step
1 – understand your obligations.
You will need to have an understanding of the new mandatory data breach
notification requirements and, if you handle EU customer information, of the
GDPR requirements.
Step
2 – audit your existing systems.
Do you have clear, simple plans for changing passwords, limiting access,
editing or removing online information and notifying the right people
internally? Assess the likely security risks in your organisation and consider
possible weak points.
Step
3 – audit your suppliers. You
will need to review vendor contracts, specifically for IT vendors, to check
whether you have appropriate privacy requirements in place for your
suppliers. Have you identified suppliers you can call on to help you
identify, cap and respond to breaches?
Step
4 – update your plan. Many
organisations will already have data breach response plans in place. Check
whether these are up to date – current people, contact details and systems need
to be added. Plans will need to be updated to reflect Australian mandatory
reporting obligations and GDPR requirements. In particular, for GDPR
requirements, you need to note the 72 hour timeframe for notification. Ensure
that your privacy policy is up to date – we see a lot of privacy policies that
were drafted before the changes of the last few years and haven’t been updated.
Step
5 – test your plan. Run through
possible scenarios to ensure that you have the right procedures and systems in
place.
You should ensure that your
procedures are ready during the next month.
We can
help you with a privacy toolkit including details of the new requirements,
updated policies, procedures and reviews to ensure that you are ready for
February. If you would like to discuss our privacy toolkit, contact
us.
