Talking Shop January 2020
Written By
Partner
UK
I'm the global head of our International Retail & Consumer sector group. As a partner in our international Commercial group in London, I work primarily with retail & consumer focussed businesses on their domestic and international growth and expansion strategies.
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Welcome to the January 2020 edition of our Retail & Consumer monthly news round-up.
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:
- Agency
- Commercial
- Consumer Law
- Corporate & Tax
- Data Protection
- Dispute Resolution
- Real Estate
- Regulatory
- News & Events
Agency
Agency law update in the UAE
It has recently been announced that the UAE Cabinet has approved a draft law which will amend certain provisions of Federal Law No. 18 of 1981 (the "Agency Law"). According to press releases, Emirati family-owned registered agents will be allowed to list on the UAE's financial markets. The law will grant Emirati family-owned registered agents further protection specifically in respect to termination or non-renewal of agreements without "material reasons". In some agreements, such a restructuring would be considered an “assignment” event requiring the consent of the principal. We have not yet reviewed the law as it has not yet been published in the official gazette. We have to wait to see how the proposed amendments to the Agency Law may impact clients with existing registered agency agreements.
Commercial
Signing on the dotted line: the importance of commercial contracts
Whether you’re in the early stages of building your brand, or have an established business and are looking to expand, the process of entering into formal written contracts (be it with suppliers, logistics partners, distributors or retailers) may sometimes seem daunting, confusing or even unnecessary.
Having robust written contracts in place, however, will put your business on a firm footing, and help to head off future disputes at the pass.
Consumer Law
Customer loyalty schemes under the regulatory microscope for 2020
Following on from our article regarding the draft report, on 3 December 2019 the Australian Competition and Consumer Commission (ACCC) released its Final Report into Customer Loyalty Schemes, which highlights areas of concern that the ACCC has in some Loyalty Schemes used by retailers in Australia. In Australia, Loyalty Schemes are a prevalent marketing tool. Almost 90 per cent of Australian consumers are estimated to be a member of a Loyalty Scheme, with the average consumer having four to six loyalty cards.
Flagged as a priority area for the ACCC in 2019, retailers should carefully consider their own Loyalty Schemes in light of this Final Report. The ACCC has shown its cards, as the Final Report encourages consumers to contact the ACCC should they have any concerns with a Loyalty Scheme, and flags that the ACCC will consider enforcement action if it is needed to effect change in the industry.
Retailers again in the ACCC's sights for was/now pricing campaigns
Further to our article "Everyone loves a discount but beware of was/now pricing", the Australian consumer regulator continues to actively pursue retailers who it considers have acted in a misleading manner in relation to "was/now" price advertising. In the context of heavy discounting in the consumer goods retail sector, this serves as a further reminder to retailers to be cautious when advertising savings.
Corporate & Tax
The myth and the mystery of the fundraising process
From a founder’s perspective, the process of raising funds to fuel the brainwave can resemble a black hole of Eventbrite tickets, template introductory emails, and speculative coffees with that friend of a friend of a friend. This article will unpick some of the myth and the mystery of the fundraising process and provide you with a renewed sense of optimism around the possibilities of launching your business.
Permanent establishment: a new tax regime for the modern digital economy?
The definition of Permanent Establishment (PE) is continually evolving and, for many, becoming more fluid and uncertain. It is fair to say that tax authorities are looking to expand the interpretation of PE so as to adapt to the way that doing business has changed over the years, in particular the explosion of online retailing. This is done with a view to taxing profits that otherwise would not have been subject to domestic taxation.
While the definition of PE has for years been provided by the tax treaties in place between the different countries, and reference for any interpretation was the OECD Tax Treaty Model, taxpayers must now take into account further changes. A new expanded definition of PE has been developed, with the consequence that the OECD Tax Treaty Model has been significantly and materially amended.
Data Protection
Information Commissioner publishes age appropriate design code
On 22nd January 2020, the UK Information Commissioner published her Age Appropriate Design Code. The code applies to organisations in the UK. It also applies on a worldwide basis to organisations that monitor kids in the UK, or where it's apparent that they intend to offer online services or goods to kids in the UK. The code is not limited to child-directed sites: it applies whenever it's more likely than not that under 18s will use the site. The code is expected to be fully effective from Autumn 2021.
Dispute Resolution
English High Court holds that operator of laser hair removal clinics entitled to recover damages for loss of profits in successful breach of collateral warranty claim
In the recent case of New York Laser Clinic v Naturastudios Limited [2019] EWHC 2892 (QB) the High Court upheld established principles in a successful claim for damages for a breach of collateral warranty and negligent misstatement confirming that the claimant could obtain damages for the loss of profits it suffered as a result of the breach. The case arose out of statements made by the defendant about the performance and quality of their product which induced the claimant into purchasing six defective laser diode devices for the claimant's laser hair removal business. The defendant was a UK distributor of the lasers which were manufactured by an Israeli company, Formakt.
A salutary reminder of the importance of following internal policies when negotiating purchase agreements by email
In Athena Brands Ltd v Superdrug Stores Plc [2019] EWHC 3503 (Comm), the English Commercial Court handed down a decision granting summary judgment in favour of cosmetics manufacturer Athena Brands Ltd, the Claimant, against Superdrug Stores Plc, the Defendant. The judgment serves as a reminder that a simple exchange of emails is capable of creating binding legal relations. While Superdrug did have policies covering the negotiation of purchase contracts, the relevant employee did not make Athena's representative aware of those policies and therefore, on the facts she was entitled to assume that he had the necessary authority to negotiate terms of trade and that he intended to bind Superdrug.
Real Estate
Italy revokes fiscal measure in favour of retail leases
With the approval of the financing provision for 2020, Italy has revoked a fiscal measure introduced in 2019 in favour of retail leases.
The measure (called "cedolare secca") was introduced last year, with art. 1, comma 99, of Law 145/2018, and was an extension of an existing measure which is proving to be quite successful for residential leases. For residential cases, the quota may be reduced to 10% in case of rents not exceeding an agreed amount.
As far as retail units were concerned, the measure gave the landlord the chance to agree to the application of a fixed fiscal withdrawal, equal to 21% of the rent, instead of being subject to the quota applicable according to the general income of the landlord. The measure was applicable to the retail leases for shops not larger than 600 sq.m.
The Italian Government has decided to revoke said measure for 2020, with an evident impact on the retail sector.
Regulatory
Shifting attitudes towards single-use plastic in the UAE
The Environment Agency – Abu Dhabi (“EAD”) has recently announced that it is preparing a draft policy on single-use plastic, which is due to be implemented in 2020. The EAD’s aim is to significantly reduce the use of single use plastic by 2021.
It is clear that there is a considerable shift in attitude towards single use plastic in the UAE and we anticipate further changes in laws and regulations in this area in the near future. It is therefore recommended that companies in the retail and consumer sectors remain focused on staying up to date with the new regulatory and legal developments.
News & Events
Frederick Mostert joins Bird & Bird as Of Counsel in London
An eminent figure in the IP world, Frederick is Past President of the International Trademark Association and the current President of the Luxury Law Alliance. He also has valuable in-house experience, having served as Chief Intellectual Property Counsel and Chief Legal Counsel of luxury group Richemont, which includes world famous brands such as Cartier, Van Cleef and Arpels, Alfred Dunhill, and Chloé.
Frederick will be continuing with his academic career and is bringing his part time consultancy practice over to Bird & Bird. He will also be available to advise clients on high level strategic projects.
Frederick commented: "I am delighted to be working with the IP team at Bird & Bird, many of whom I already know. My interests in brands and digital/online issues makes Bird & Bird the perfect match for me and my clients."
Travel and wellness: capitalising on the opportunities in this $4.5 trillion industry
4 February 2020
09.00 - 10.00 GMT
Online webinar
This webinar will guide you through the Wellness landscape, outlining key trends and opportunities in Wellness tourism and helping you to navigate this exciting new market whilst avoiding the pitfalls. We'll be joined by a very special guest, Papillon Luck, founder of 15th Degree - an innovative supplements brand bridging the gap between Wellness and business travel and tackling the issues associated with long-haul travel fatigue.
Click here to register.
Product design law challange: design right...or wrong?
26 February 2020
16.00 - 18.00
Bird & Bird, London
Our inaugural Product Design Law Challenge will be based around a series of interactive quiz questions as we take you through the latest developments and trends in design case law, enforcement strategies and filing practices. We will look at topics such as the potential impact of the recent Cofemel CJEU copyright case on design protection in the UK, why it matters where you first display your new design, and the newly created design rights set to arrive after Brexit.
We do hope you can join us for what promises to be a fun evening, gaining valuable insights at the cutting edge of design law and networking with peers who are facing similar challenges in enforcing and protecting valuable product design.
Click here to register.
