Welcome to the May 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, 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 In Focus page here.

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

In this newsletter:


Advertising, Marketing & Consumer Law

Consumer protection: UK grants CMA online enforcement order powers

Businesses operating in the Retail & Consumer sphere may not be aware that the UK government has recently laid before Parliament an EU-derived Regulation which grants the Competition and Markets Authority (CMA) new powers to enforce consumer protections in the online sphere. Many of the UK’s consumer protection laws derive from EU legislation which, in addition to setting out EU-wide protections that are available to consumers, also provide for an EU-wide enforcement strategy when those laws are broken.

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Legally and ethically advertising products during the pandemic for companies and influencers in Singapore

The impact of the COVID-19 pandemic has led to a significant rise in the demand for personal protective equipment like masks, and other medical products like hand sanitisers and disinfectant wipes. Many businesses have jumped onto the bandwagon to aggressively market their COVID-19-related products to consumers, particularly through social media and the Internet.

Whilst consumers are generally perceptive and understand that an opportunistic streak does run through pandemic marketing, businesses should nonetheless steer clear of unfair practices and misleading claims.

This article outlines the important points on advertising products in Singapore, particularly COVID-19 related products during the pandemic.

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The Slovak Trade Inspectorate’s list of risky e-shops and the sale and purchase of filter face half masks during the Coronavirus pandemic

The Slovak Trade Inspectorate regularly publishes information about websites that it considers risky due to non-compliance with certain legal obligations, as well as problematic exercising of consumer rights and individual claims. The inclusion of a website on its list of risky e-shops is only a recommendation for consumers to carefully consider purchasing on the website. However, the fact that an online store is not listed does not automatically mean that buying items from such a store is safe.

In connection with the emergency situation related to the coronavirus pandemic and its impact on retail sales, sales via e-shops have increased and, unfortunately, the number of rogue traders and e-shops has also increased proportionately. All the more striking is the fact that many dishonest entrepreneurs are abusing the situation, offering low-quality personal protective equipment or their counterfeits, precisely in connection with the pandemic.

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Australian regulator microscope on exploitation

Due to the rapidly changing global landscape following the impacts of COVID-19, the Australian Competition and Consumer Commission announced on 27 March 2020 a "re-focus" of its 2020 Compliance and Enforcement Priorities. While it has not explicitly revoked its existing priorities, the ACCC has announced it will refocus is efforts to include addressing any behaviour the ACCC considers to be exploitative which results in disproportionate improvement of commercial position and/or consumer harm. The ACCC's newly formed COVID-19 Taskforce has been tasked with addressing COVID-19 related competition and consumer law issues.

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Competition

Easing the competition law minefield for food & beverage businesses: COVID-19 makes it easier for competing F&B companies to cooperate and obtain government subsidies

As a general rule, companies are required to self-assess whether any cooperation they enter into is antitrust compliant. This is particularly true when it comes to cooperation with competitors, which finds itself in the cross-hairs of antitrust enforcement around the world. The rules are strict and assessment can sometimes be difficult, often requiring specialist knowledge to avoid the pitfalls.

The COVID-19 outbreak has, in certain cases, made more cooperation possible and achieving legal certainty easier. The European Commission has adopted Temporary Frameworks for antitrust cooperation as well as State aid (government subsidies), setting out the main criteria that the EU Commission will follow when assessing cooperation projects aimed at addressing a shortage of supply of essential products and services during the COVID-19 outbreak as well as support schemes from EU Member States.
To assist businesses in such difficult times, the EU Commission and the EU National Competition Authorities ("NCAs") have made it clear that they are ready to assist companies and, in certain cases, even confirm that they are not infringing competition rules when working together. Likewise, they have enacted a speedy clearance system for EU Member State schemes for providing State aid.

To help companies active in the food and beverage sector, we have prepared short Q&As on the most common business situations.

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Franchising

International franchise post-COVID restart tracker

International franchisors who operate across multiple countries are finding it difficult to keep track of local regulations as they adapt and change in response to the COVID-19 pandemic. To make this easier, we have used our international reach via our offices and local contacts to create the COVID Restart Tracker. It covers multiple jurisdictions and asks key questions regarding the status of lock down that will inevitably impact all sectors. Our goal is to stimulate positive and strategic thinking on how and when businesses can plan their gradual return to business as usual.

The COVID Restart Tracker will constantly change and adapt to try and best meet the needs of our clients and contacts, and in due course will be delivering a deeper level of information and support. If you would like more information about any of the issues or jurisdictions covered by the tracker please contact us at [email protected].

The ACCC Franchising Taskforce cracks down on Franchise Code non-compliance in Australia

The ACCC and its Franchising Taskforce continue to pursue adherence to the Competition and Consumer Act in the Australian franchise sector. The ACCC has obtained a court enforceable undertaking from Bob Jane Corporation Pty Ltd (Bob Jane). This action is a reminder to franchisors that they cannot dispense with obligations under the Franchising Code of Conduct (Code), even with agreement of the franchisee.

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Regulatory

Food regulatory & COVID-19: key policy measures and obligations for businesses during these challenging times

Agri-food is a sector that supplies essential goods and services, and as such it has a key role to play in the schemes that the competent authorities put in place to manage the COVID-19 crisis, notably by defining measures for the purpose of ensuring as little disruption as possible to food supply, so that consumers continue to have access to sufficient quantities of food and that food is safe.

There are multiple risk factors for disruption, including the unavailability of the necessary workforce or shortages in essential supplies upstream. In the EU, the temporary introduction of internal border controls also adds complexity to the transport of goods in the internal market. In addition, there is a threat of a spike in prices or other unfair trading practices that needs careful monitoring and action.

On this page, which will be updated and supplemented regularly, our Food & Beverage team summarises key policy measures being adopted to alleviate the impact of the crisis on the sector or otherwise maintain the accessibility of food for consumers and other related information, with a particular focus on developments that entail obligations for businesses. 

Six key regulatory rules for entry into the cosmetics market

Unlike other types of products (such as medicinal products) cosmetics products do not need prior regulatory approval before they can be put on the market.

This does not mean, however, that they are unregulated – far from it. In this article we offer a few regulatory tips for a smooth market entry.

This article was originally published on theredtree.co.uk.

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Tax Investigations

HMRC announces that almost 800 people have reported their employers for fraudulently claiming money from the Coronavirus Job Retention Scheme

The announcement comes after HMRC raised concerns about financial crime during the pandemic and publicised a whistle-blowing hotline only last month. It is very likely that criminal investigations and prosecutions will follow in the coming months. The combination of soaring financial pressures and unprecedented levels of state support caused by the COVID-19 pandemic has created a perfect storm for fraud. At the same time, with many people forced to work from home, businesses have never had such little oversight over their employees.

During this period of heightened risk, all businesses should ensure that they do not find themselves unwittingly committing corporate criminal offences under the Criminal Finances Act 2017. The Act was introduced in 2017 to impose criminal liability on those organisations who do not prevent their people from helping others commit tax evasion. There is a simple response to this unlikely eventuality; the only defense is having in place reasonable procedures to prevent any wrongdoing. These procedures all stem from a risk assessment having been conducted.

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