Talking Shop February 2020

This newsletter focuses on key news and updates for retail and consumer-facing businesses around the world.

At the end of the newsletter, you can also find details of our recent news and upcoming events, which we think might be of interest to you and your team.

Please get in touch, or visit our webpage for more information about Bird & Bird's Retail & Consumer Group.

In this newsletter:

• Employment
• Franchising
• Geoblocking
• Regulatory
• Tax
• News & Events

Employment

Important changes for UK employers seeking to employ non-UK Nationals from January 2021

The Home Office has published its much awaited policy statement on the government's plan for a new points-based immigration system, which is expected to take effect from 1 January 2021. The statement has very significant ramifications for employers wishing to hire employees from the EU: they will need to take action now to ensure they are prepared for these changes.

Read more >

Changes to National Minimum Wage rules from April 2020

From 6 April 2020, the government will reintroduce the practice of publically naming and shaming businesses that do not pay their workers the National Minimum Wage.

The scheme was suspended in 2018 for review and will therefore undergo some tweaks and changes in April 2020 such as:

• Increasing the threshold for naming and shaming. Businesses who owe their workers more than £500 in NMW payments will be publically named. Under the previous scheme, the threshold was £100; and
  
  
• Naming rounds occurring more often so that the scheme will have a more potent effect on non-compliant businesses.

Read more >

Franchising

Dutch Franchise Act bill submitted to the House of Representatives

The Dutch Franchise Act bill was submitted to the House of Representatives in the Netherlands on 10 February 2020.

We discuss the content of the bill and the differences compared to the earlier draft proposal. At the end of this article we will explain what the next steps will be in the legislative process and the expected timing thereof.

The bill is relevant to all franchise relationships to which Dutch law applies. Dutch law may for example apply if this has been agreed in the franchise agreement or when both the franchisor and the franchisee are established in the Netherlands.

Geowash washes up: employees personally liable for penalties for misleading conduct in franchise negotiations

The Federal Court of Australia has ordered a total of over $4.2 million penalties against Geowash Pty Ltd (Geowash), and a director and employee of the company, as well as injunctions, disqualification orders and a $500,000 payment as partial redress payment against each of the director and employee.

While the payment of a $2.5million penalty against Geowash is stayed given the company's financial status (it is currently under administration), the magnitude of the penalty, combined with the restraints and penalties ordered against an individual director and employee are a warning to franchisors that breaches of the Franchising Code and the Australian Consumer Law have serious consequences.

Submissions open for comment on draft regulations for motor vehicle franchises

On 14 February 2020, the Australian government published a draft version of proposed amendments to the Franchising Code specifically for new car sales franchises. A public consultation period regarding the Competition and Consumer (Industry Codes – Franchising) Amendment (New Vehicle Dealership Agreements) Regulations 2020 (Draft Regulations) is open until 13 March 2020, inviting interested stakeholders to submit their feedback. This follows a consultation period in late 2018/early 2019 prompted by concerns raised by new car dealers that the current Franchising Code of Conduct is insufficient in dealing with the new car sales industry and franchise relationships between dealer franchisees and car manufacturer franchisors. The draft has the potential to significantly curb business practices of franchisors and they should consider making submissions in this consultation phase.

Read more >

Geoblocking

"Sweep" of European websites: breaches of information obligations and geo-blocking rules - national authorities to take action

On 31 January 2020, the European Commission published the results of an EU-wide screening of nearly 500 e-shops selling clothing and footwear, furniture and household items, and electric appliances. These sweeps are carried out annually by the network of Consumer Protection Cooperation Authorities.

The findings reveal that two-thirds of the screened websites do not comply with EU consumer rights: one fifth of the flagged websites did not adhere to the Geo-blocking Regulation and web shops were also found not compliant with other EU consumer rights, primarily where it regards information obligations.

We briefly describe the key results and focus areas that have emerged from the EC findings.

Regulatory

Nutritional and health claims made on foods: compliance can be an asterisk away

On 30 January 2020, the Court of Justice of the European Union issued its ruling in case C 524/18, Dr. Willmar Schwabe GmbH & Co. KG (hereafter, "Schwabe") v Queisser Pharma GmbH & Co. KG (hereafter, "Queisser").

The facts that gave rise to the main dispute relate to claims made on the label of a food supplement (called Doppelherz® aktiv Ginkgo + B -Vitamine + Cholin) marketed by Queisser.

Food Standards Agency update: clarity or calamity for CBD food businesses?

On 13 February 2020, the Food Standards Agency, which regulates food and food businesses in England, Wales and Northern Ireland, announced that extracts of cannabidiol ("CBD") contained in any edible products must be subject to a validated novel foods authorisation application by March 2021.

Whilst this announcement provides some much anticipated clarity on the FSA's approach to enforcement of the novel food regime in relation to CBD products, failure to comply with the deadline could result in potentially serious damage to businesses, with their products being pulled from shelves in the UK.

Regulator presses ahead with mandatory standard for pregnancy warning labels on packaged alcohol in Australia and New Zealand

Food Standards Australia New Zealand (FSANZ), the regulator responsible for developing food standards for Australia and New Zealand, is seeking to replace the current voluntary scheme with mandatory pregnancy warning labels on packaged alcoholic beverages. Ministers responsible for food regulation have been given 60 days from 17 February 2020 to elect whether to request a review of FSANZ's decision to amend the Australia New Zealand Food Standards Code.

Read more >

Tax

HMRC recently announced that nine businesses are under criminal investigation for failing to prevent the facilitation of tax evasion

The press release also disclosed that a further 21 businesses across 10 different sectors have cases under review by HMRC. We are told that the investigations relate to businesses of all sizes some of whom are amongst the largest organisations. This is the first time we have been told of the number of businesses actively under investigation.

The corporate criminal offences of failing to prevent the facilitation of tax evasion relating to UK tax and non-UK tax, contrary to Criminal Finances Act came into force on 30th September 2017. The offences are strict liability which means that the prosecution do not have to prove that the companies board or senior management were aware of the facilitation of tax evasion.

News & Events

Our Marketing & Advertising team launches Digital Marketing Law+ site

Last week we launched our Digital Marketing Law+ site where you can access and compare key online marketing laws across 17 jurisdictions on the following topics:

• Overview of online advertising
• Prize promotions
• Social media & influencers
• Comparative advertising
• Data protection & privacy

Visit the site here.

Counsel Nicolas Carbonnelle from Bird & Bird's Regulatory & Administrative practice in Brussels and associate Raoul Grifoni Waterman from the Commercial & Regulatory teams in the Netherlands have collaborated on a chapter in the recently published Lebensmittel- und Gebrauchsgegenständerecht (Food and commodity law).

Their chapter is entitled "Food Law in a European Context" and provides a high level overview of the regulatory framework applicable to food products in the European Union.

The handbook on food and commodity law combines expert knowledge across this broad legal sector. It deals with regulatory requirements, labelling and advertising law, the consequences of liability in the event of product defects, official handling and enforcement of defective products and legal protection for customers. The book explores the specific legal topics relevant to food law, such as tax and customs law, intellectual property law, waste law and sales cartel law. The chapter that Nicolas and Raoul contributed provides the aforementioned overview, sets out some of the key elements of EU food law (including information on Switzerland's unique position with regard to the movement of goods between Switzerland and the EU) and a note on Brexit and EU food law.

For more information, visit the publisher's website or contact Nicolas Carbonnelle and Raoul Grifoni Waterman.