Talking Shop May 2022
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.
Welcome to the May 2022 edition of our Retail & Consumer news round-up
This newsletter focuses on key news and updates for retail and consumer-facing businesses around the world. In this edition you can find articles on the new Vertical Block Exemption Regulation, the proposed UK consumer law reforms, the Digital Services Act, ED&I monitoring, and much more. At the end of the newsletter, you can 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:
Competiton
Europe: The new competition regime for distribution in the EU - opportunities for the decade ahead
The new Vertical Block Exemption Regulation (VBER) provides for a general exemption from competition rules for all types of distribution agreements. On 10 May 2022 the EU Commission published the final version of the VBER and its accompanying Guidelines. The new rules enter into force on 1 June 2022.
Our experts Pauline Kuipers, Ariane Le Strat and Joerg Witting have distilled the main changes of the new regime for you in this article. It not only highlights where businesses will need to adjust their distribution agreement to comply with the new rules and/or benefit from new exemptions, but also indicates where the Commission provides more room for a commercially flexible and tailored approach to the current challenges in omnichannel distribution structures.
UK: The new UK competition law regime for vertical supply chain agreements - the VABEO
This note sets out the structure of the new competition law regime for vertical supply chain agreements in the UK. Following the publication of the draft VABEO, the CMA has now also published the accompanying guidance. The full text is available here. Both documents work together in tandem. The VABEO is not an overhaul of the existing rules. It retains a similar structure whilst modernising the approach. Overall, our view is that both the VABEO and Guidance are clearer and better articulated documents than the retained VBER.
At the time of writing, the Guidance is still under consultation and may be subject to change. However, given the tight timetable until the new regime comes into force (31 May 2022), it is highly unlikely that the below will be substantially amended.
UK: Reforming competition policy - ready for lift-off
Since the publication of Lord Tyrie’s letter of 2019, change has been underway in developing and reforming competition and consumer policy in the UK. We previously reported on the proposed reforms which were announced in July last year. In April 2022, the government finally published its response to its consultation on those proposals. The consultation received over 180 responses and was focused on three themes:
- promoting competition to drive enterprise, innovation, growth, and productivity;
- updating consumer rights to keep pace with markets; and
- strengthening the enforcement of consumer law by individuals and regulators.
This article briefly summarises the key competition policy reform proposals which the government has confirmed it intends to move forward with, following the Queen’s speech on 10 May 2022. The proposed legislation will be known as the Draft Digital Markets, Competition and Consumer Bill. If you would like to learn more about the consumer law reforms, please see our related update here.
France: Cofepp has been fined 7 million euros for acquiring control of Marie Bizard Wine & Spirits without previously notifying the transaction or awaiting the decision
Cofepp, which heads a group of companies active in the spirits production markets, has been fined 7 million euros by the French Competition Authority for two distinct infringements regarding the takeover of Marie Brizard Wine & Spirits (MBWS).
Cofepp was fined (i) for having acquired control of MBWS without notifying the operation to the Authority and (ii) for having continued and strengthen its decisive influence between the notification (finally made later) and the decision of the Authority. This is the first time the French Competition Authority has sanctioned these two infringements in the same decision.
This decision usefully clarifies the tipping point between absence of control and control; and therefore, on the risk of a sanction for failure to notify and early completion of the operation.
Consumer, Advertising & Marketing
Spain: Green claims reach the Spanish courts
The ruling issued by the Court of Appeal of Barcelona dated October 6, 2020, case ANEABE vs TAPP WATER, is a good example of resolutions of the Civil Courts in Spain related to the green claims topic.
The national association of bottle drinking water companies (Aneabe) filed a lawsuit against Tapp Water S.L., which sells a series of filters that purify water. Aneabe brought unfair competition actions in relation to an advertising campaign developed by the defendant through social networks and the content of the company's website. This campaign included different claims about the properties and characteristics of filtered tap water, alleged environmental problems that can be linked with the use of plastic bottles and also compared qualities of tap water with those of bottled or mineral water.
UK: Regulator bans Tesco Mobile adverts for using implied expletives
The Advertising Standards Authority (ASA) oversees the UK's self-regulatory advertising codes and publishes rulings against marketers who it finds have breached the UK advertising codes. On 11th May 2022 the ASA ruled that several tongue-in-cheek Tesco Mobile advertisements must be removed on the basis of causing serious and widespread offence, further clarifying just how far marketers can go when using or implying explicit language in their advertising materials.
UK: Consumer game changer - the CMA will be empowered to directly fine businesses for consumer law infringements as Queen’s speech confirms UK Consumer law reforms
In a game changing day for UK consumer regulation, the Queen’s speech on 10 May 2022 confirmed that the proposed UK consumer law reforms will be legislated for, meaning enhanced powers for the UK’s Competition and Markets Authority (CMA).
The CMA will be empowered to directly issue fines that are larger than GDPR-style fines to businesses for consumer law infringements. As stated in the Queen’s speech: “Draft legislation to promote competition, strengthen consumer rights and protect households and businesses will be published”. Further, these measures will be introduced as Parliamentary time and priority permits.
Disputes
Reasonable Endeavours in a force majeure clause did not require a party to accept non-contractual performance
Force Majeure clauses are again in the spotlight as sanctions are made against businesses with Russian ties resulting in non-performance of commercial contracts. It has been widely reported that this has severely affected the aviation industry, the tech community and the retail & consumer sector, but the effects will reach many other areas of commercial life.
Sanctions are of course not new. In a timely judgment, relating to sanctions imposed on Russia in 2018, the Commercial Court, in MUR Shipping BV v RTI Ltd [2022] EWHC 467 (Comm), has recently confirmed that the requirement to use reasonable endeavours to overcome the effects of a force majeure event did not extend to requiring a party to a contract to accept non-contractual performance in order to be able to rely on the force majeure clause. Whilst the facts of this case relate to sanctions imposed in 2018, the judgment will be of wide interest given recent sanctions imposed against Russia by governments worldwide and demonstrates the importance of clearly drafted force majeure clauses for parties who may seek to rely on them.
Employment
HR Data Essentials: equality, diversity and inclusivity monitoring
Equality, diversity and inclusivity are vital to building a strong, engaged and innovative workforce. Without monitoring, it is difficult for any organisation to know where to start. We are here to help.
The first step for most is working out what are their existing diversity challenges. This is difficult to do properly without accurate data. Collecting this data can be challenging, especially where a multi-country workforce means diverging rules across multiple jurisdictions. EDI data is usually highly sensitive, and processing this information is high-risk activity under both employment and privacy laws. There can be significant consequences of getting it wrong, from outraged staff and reputational damage to the potential for fines and legal claims
This guide exists to help you understand these rules. Our comparative traffic-light chart and detailed country summaries have been updated to help you understand what you can collect, and how you can use the data you obtain. If you want to know more, our HR Data experts are happy to help you navigate these requirements for your workforce..
Payments
Belgium: All brick-and-mortar businesses will have to offer at least one means of electronic payment to consumers
As of 1st of July 2022, any customer-facing business carrying out a business activity in Belgium will be required to offer at least one means of electronic payment so that cashless customers can still pay for the goods or services. The rationale behind this new requirement is primarily fighting tax fraud, but also promoting the widespread use of electronic payments solutions..
Regulatory
Europe: Online platforms face far-reaching new duty of care obligations as agreement reached on EU Digital Services Act
Online marketplaces, social media and search engines will soon be subject to ground-breaking new rules in the European Union, following a political agreement reached on the Digital Services Act (DSA) on 23 April. The DSA, which aims to create a safer and more transparent online environment for citizens, will usher in due diligence requirements on all online intermediaries providing services in the EU. With the DSA, Brussels aims to set a global precedent for regulating digital services. This development comes just one month after an agreement was reached on a parallel piece of legislation, the EU Digital Markets Act, which will introduce complement competition law by introducing specific ex-ante regulation for the largest “gatekeeper” platforms.
News & Events
The Hague: Successful live webinars on the new EU e-commerce and consumer law
Roelien van Neck, Lisette den Butter and Stephanie Welbergen recently hosted two live sessions on “Retail & Consumer & New EU E-Commerce and Consumer Law”. The online events highlighted the following new EU e-commerce and consumer laws that will soon apply in all EU Member States:
- the Digital Content and Services Directive (EU 2019/770);
- the Sale of Goods Directive (EU 2019/771); and
- the Omnibus Directive (EU 2019/2161).
During the live webinars, out Dutch Tech/Commercial team guided the participants through the new legislation on an EU and Dutch law level, discussing the changes to the existing rules and explaining where differences can arise between the various Member States. The team concluded the webinar with commercial guidance on the application of the new rules in practice.
With over 320 people registered, the webinars were a great success! This was the fourth online event in our "Retail & Consumer &" webinar series, where our Dutch team provides expert insights into relevant hot topics in the retail market.
For more information about these topics or if you would like to receive the slides, please contact Roelien van Neck, Lisette den Butter or Stephanie Welbergen.
Bird & Bird appoints leading data protection, IP and technology specialists to join new Irish office
We have appointed leading Irish data protection, IP and technology specialists, Deirdre Kilroy and Anna Morgan as the first two partners to join our new office in Dublin. The office will be based in George’s Dock, close to Dublin’s tech hub Grand Canal Dock, and will officially open on 13th June.
The appointments of Deirdre Kilroy and Anna Morgan will grow the firm’s strong offering in Ireland in the areas of data protection, intellectual property, and technology and communications.
