Talking Shop March 2021

Welcome to the March 2021 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, including our latest briefings on the COVID-19 pandemic and its impact on the sector. You can find all our COVID-19-related updates for retail and consumer businesses on our dedicated InFocus page here.

At the end of the newsletter, you can find details of our recent news and 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:

Hot Topics

Trends in the Retail & Consumer sector

Retail & Consumer team-members Shariqa Mestroni and Leila Moddel recently explored current trends in the sector at Bird & Bird Sydney’s Corporate Counsel CPD event. They focused on topics including:

  • Transparency: consumers’ desire to know more about how and where a product is made
  • Sustainability: building sustainable brands through trademark protection, ethical supply chains and by addressing environmental/social impact
  • Modern Slavery Act: mandatory reporting requirements and scope for voluntary reporting

If you missed it, you can watch a recording of the event here.

An introduction to dark kitchens

Whilst it feels inappropriate to talk about the “winners” of the COVID-19 pandemic, the UK food delivery and takeaway market continues to grow at an impressive pace. This is in part due to the expansion of online delivery concepts such as Deliveroo, Just Eat and Uber Eats combined with a tech enabled and technology hungry consumer base, but also as a result of the restrictions imposed in response to the pandemic. Just two years ago - pre-pandemic - the market was valued at £8.5 billion in the UK, with projections showing that this could almost double by 2023.

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Spotlight on the UK Spring Budget 2021

Buy homes, raise tax, save the economy

With an unprecedented economic challenge resulting from the COVID-19 pandemic (having finally got Brexit done), Chancellor Rishi Sunak faced his second Budget with the unenviable task of seeking to support the economy through the easing of restrictions, introducing measures to support economic bounce back whilst keeping one eye on public finances. No easy task with borrowing at its highest level in peace time and due to peak at 97.1% of GDP in 2023/2024.

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Spotlight on COVID-19

UK: Chancellor formally announces taskforce to investigate COVID-19 business support claims

At the UK Budget announcement made on 3 March 2021, Chancellor of the Exchequer Rishi Sunak formally announced the creation of a new ‘Taxpayer Protection Taskforce’. The Taskforce will be equipped with 1,265 HMRC staff and over £100m in funding in order to detect and tackle fraud and error within COVID-19 support schemes.

Over the past year, the UK Government has implemented a number of unprecedent initiatives to help businesses weather the pandemic, the best known of which is perhaps the Coronavirus Job Retention Scheme (CJRS) (better known as the ‘furlough’ scheme). The Taxpayer Protection Taskforce will now police the full range of taxpayer-funded COVID-19 business support schemes, including the CJRS but also (amongst others) the Self Employment Income Support Scheme, the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme and the Coronavirus Large Business Interruption Loan Scheme.

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UK: COVID-19 business support risk assessment

Claims made in relation to the COVID-19 business support schemes (mentioned in the article above), even if made in good faith, may face sanction if mistakes were made with the application process, ongoing compliance requirements or record-keeping. In order to ensure there are no surprises when HMRC conduct a compliance check or investigation, Bird & Bird has developed a risk assessment in order to allow businesses to health check their use of any of the schemes.

Our COVID-19 business support risk assessment allows you to share details of the support schemes used and highlights potential issues to be aware of in order to prepare for any check or investigation by the new Taxpayer Protection Taskforce. The data will be collected by members of our specialist Tax Disputes and Investigations team, which is dedicated full time to the resolution of disputes with HMRC both of a civil and criminal nature. We have a wealth of experience leading complex disclosure projects, undertaking forensic internal investigations with clients in order to submit detailed representations to HMRC for the purpose of error disclosure and mitigation. Our expertise in disclosure projects means we are able to quickly understand and advise clients on how to deal with risks that arise in difficult circumstances, in particular where deliberate or fraudulent behaviour is alleged or suspected.

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Competition & Consumer Law

Australia: ACCC releases list of compliance and enforcement priorities for 2021

On 23 February 2021, the Australian Competition and Consumer Commission (“ACCC”) released its compliance and enforcement priorities for 2021. These priorities provide guidance to industries and businesses regarding those areas which will be a key focus for the ACCC’s enforcement activities in the coming year.

A number of the ACCC’s compliance and enforcement priorities for 2021 reflect a refocusing of priorities that the ACCC had committed to prior to the outbreak of the COVID-19 pandemic in 2020, at which point it was forced to adapt and respond to a number of other, more pressing challenges. Some of the ACCC’s other priorities are aimed at addressing some of the broader competition and consumer protection issues that have been caused, or exacerbated by, the COVID-19 pandemic.

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Australia: Federal Court imposes a $350,000 penalty on FE Sports for resale price maintenance

On 24 March 2021, the Federal Court imposed a pecuniary penalty of $350,000 on a wholesale distributor, B & K Holdings (QLD) Pty Ltd trading as FE Sports (FE Sports), for resale price maintenance in relation to bicycle products and accessories sold under the brands Wahoo Fitness, Pirelli, 100%, 3T, and Stages: Australian Competition and Consumer Commission v B & K Holdings (Qld) Pty Ltd [2021] FCA 260. Further, the Federal Court ordered FE Sports to refrain from seeking to enforce a term in any agreement that a current or prospective retailer (Dealer) not advertise goods for sale below the recommended retail price (RRP), and to write corrective letters to affected Dealers indicating that they are free to advertise or offer for sale goods supplied by FE Sports at a price less than the RRP or at a discount. FE Sports was also ordered to establish a Competition and Consumer Compliance Program, which includes staff training and implementing complaints handling procedures.

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Czech Republic: Czech Supreme Court confirms that a new warranty period does not start in case of warranty replacements

Unlike the “old” Civil Code, the “new” Civil Code does not stipulate that in B2C relations a new warranty period is granted if a defective item is replaced by a new product within a warranty period. Legal doctrine interprets that the rule from the “old” Civil Code is not applicable in the new regime, and that a new warranty period is not provided in case of replacement of a defective product within the 24-month warranty period. The seller is only obliged to ensure that a consumer can use a defect-free product for 24 months.

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The Netherlands: Amsterdam Court of Appeal accepts jurisdiction in damages claim concerning abuse of dominance case on the Greek beer market

On 16 February 2021, the Amsterdam Court of Appeal (Court of Appeal) reversed a judgment of the Amsterdam District Court (District Court) in which the District Court declined jurisdiction in the damage claims brought by the Macedonian Thrace Brewery S.A. (MTB) against Athenian Brewery S.A. (AB) which is a Greek subsidiary of Heineken N.V. (Heineken). MTB commenced civil proceedings in the Netherlands claiming compensation for damages allegedly caused by both Heineken and AB for an abuse of dominance competition law infringement in the Greek beer market.

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UK: Meerkat Manipulation - CMA publishes full infringement decision on the imposition of wide MFN clauses by Compare the Market price comparison website

Having fined Compare The Market (‘CTM’) £17.9 million for imposing wide ‘most favoured nation’ (‘MFN’) clauses in its agreements with home insurance companies, on 9 February 2021 the Competition and Markets Authority (‘CMA’) released the non-confidential version of its infringement decision. The decision is welcome guidance for businesses and legal practitioners on how to assess these elusive restrictions and to navigate the complex legal landscape which has developed around them. It is also an example of the CMA seeking to carve out its role as a leading competition authority on the international stage post Brexit.

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Data Protection

Data protection topics for retailers in 2021

Retailers are embracing a data driven approach to better understand their consumers and inform strategic decisions (i.e., on pricing, promotion, loyalty programs and customer communications etc.). Data is also an important topic for retailers when managing their employees. As such, we consider some key data protection topics for retailers in 2021.

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Dispute Resolution

Meeting the challenges posed by Brexit for cross-border disputes

On 1 January 2021 the European Union regime that previously facilitated litigation for disputes crossing the border between the EU and United Kingdom fell away, to be replaced with a regime founded on the Hague Convention on Choice of Court Agreements 2005, a network of historic cross-border arrangements, English common law and laws of the relevant EU member states. Most of the resulting complexities have yet to be tested. As a result, businesses contracting with EU counterparties will need to give additional thought to their approach to dispute resolution, both when preparing contracts and when a dispute first arises.

In this article we look at the key areas affected and how enforcement issues may be addressed in a selection of EU member states. It is important to bear in mind that the changes to law and procedure do not affect disputes where there is no connection to EU member states, nor do they affect disputes where the parties have agreed to arbitrate.

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The results are in: Uber has lost its appeal over the worker status of its drivers

On 19 February 2021, the Supreme Court handed down its long-awaited decision on the employment status of Uber drivers and unanimously dismissed Uber’s appeal. The ruling was Uber's last appeal; the Supreme Court is the UK’s highest court, and it has the final say on legal matters.

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Intellectual Property

The role of IP within social media

Rebecca O'Kelly-Gillard joins CIPA and their Two IPs In A Pod podcast to chat about the role of IP within Social Media.

Copyright still exists within social media, but how do you protect your rights and enforce them on platforms designed to share content? Rebecca takes us through the role of your Digital Footprint, cross platform content rights, common social media myths, and advice for small businesses selling through social media.

Listen here >

Modern Slavery

UK: The Home Office launches its Modern Slavery Statement Registry

Many businesses will by now have received notification from the Home Office that the Government’s modern slavery statement registry is open for business. In its response to the “Transparency on supply chains” consultation in September last year the Home Office stated its intent to require organisations that pass the Modern Slavery Act (MSA) threshold to publish their statements on a Government-run reporting service.

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Modern slavery and ethical, social and corporate governance: The advantages to businesses in doing the right thing

nsuring the rights of workers and working conditions in supply chains should be a core part of corporate compliance with the Modern Slavery Act 2015. Recent investigations highlighting poor pay and working conditions of UK clothing manufacturing workers have been the subject of concerning newspaper headlines. In some cases, concerns were raised not only in relation to working practices, pay, health and safety, but also to suspicions that there may be issues of human trafficking, tax evasion and tax fraud.

What are the lessons that we can learn from these incidents? And how can businesses ensure they not only remain compliant, but address wider reaching consequences such as as fraud, tax evasion, health and safety breaches, immigration offences and reputational risk? We explored these questions in a recent webinar: watch here if you missed it.

Read more >

News & Events

Our Franchising team has developed a new tool to help you compare franchise-specific laws across the globe

Franchising is becoming an even more popular strategy for businesses looking to enter new international markets – not only in traditional franchise sectors such as food & beverage, hotels and retail, but also in sectors such as education and healthcare. Many businesses are not however aware that franchising is also becoming increasingly regulated and requires experienced specialists to advise not only on the relevant markets' franchise entry requirements, but also what this means practically from a timing, cost and process basis so as not to impede or delay market entry.

To help businesses plan their market entry strategy, we have developed a new information tool which compares franchise-specific laws across the globe. The tool includes a traffic light analysis to help businesses quickly identify the heavily regulated and more complex markets from those which are less burdensome.

Read more >

We joined the webinar "Is Sleep Really a Billion Dollar Business?" as part of The Healthspan Show

The Healthspan Show, created by LSX, sits at the intersection of two massive trends – longevity and wellness. It's a business conference and exhibition for entrepreneurs developing wellness solutions to facilitate ageing well.

Senior Associate and Wellness Group lead, Emma Green, spoke at the webinar "Is Sleep Really a Billion Dollar Business?". The sleep health industry is collectively estimated to be worth between $30-40bn. Conversely, sleeplessness is responsible for an estimated $63bn in lost productivity. While sleep trackers have proven problematic, the hardware industry is booming with innovative new solutions to help improve population sleep habits. This session looks at the science behind sleep, how to develop a successful sleep hardware business and where future opportunities lie.

You can watch the webinar here.

We recently hosted a webinar on Green Advertising: Current challenges and future outlook

We explored the do’s and dont's of Green Advertising - an umbrella term for any advertising, claim or other communication related to sustainability, renewable resources, recycling, so called ocean plastics, carbon footprints or similar.

Consumers are paying attention to the environment and evaluating the entire lifecycle of the products they are purchasing, from production to disposal. They want to preserve their own health and preserve the planet for future generations. Unsurprisingly, many products are advertised with various green claims in an effort to win the consumer’s favour. However, the use of such claims is highly regulated and a lack of compliance can lead to the removal of non-compliant products from the shelves.

In the webinar we provided an outlook on European initiatives on green advertising; showcased the current legal situation in selected European countries; gave practical guidance on opposing non-compliant uses by competitors; and highlighted actions of the UK CMA as well as ongoing litigation in France.

Watch the recording here if you missed it.

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