New Edition of Rimon White Paper — Network Interference: A Legal Guide to the commercial Risks and Rewards of the Social Media Phenomenon

This post was written by Douglas J. Wood and Gregor J. Pryor.

We’re pleased to make available our new edition of our Social Media White Paper with expanded chapters and new coverage of Social Media issues in Europe. Our first edition fast became one of the most downloaded documents on Rimon’s website. Click here for the new edition and bookmark the entry to be sure to get ongoing revisions.

Product Placement in the UK

This post was written by Christopher Hackford, Marina Palomba, and Huw Morris.

The Audiovisual Media Services (Product Placement) Regulations came into effect in the UK 16 April 2010. Under the Regulations, product placement will now be permitted in television programmes made in the UK, although those featuring product placement will not be permitted until Ofcom has amended the Broadcasting Code, which may not be until sometime in autumn 2010.

“Product placement” is defined in the UK Regulations as the inclusion in a programme of, or the reference to, a product, service or trademark, where the inclusion is for a commercial purpose, has been paid for (by way of cash or other valuable consideration), and does not amount to prop placement (i.e., inclusion of a product that has no significant value and that was not included because of a payment or valuable consideration).

There are four types of programmes in which product placement is permitted: (i) films made for cinema; (ii) films or series made for television or on-demand services; (iii) sports programmes; and (iv) light entertainment programmes. No children’s programmes may carry product placements—programmes primarily aimed at viewers under 16. News programmes fall outside these permitted types, and UK-made religious, consumer affairs or current affairs programmes are not permitted to include product placement. There is also some catch-all wording to prevent programmes for which product placement is “unsuitable”—an undefined term. As for the BBC, it is still bound by its Royal Agreement and is prohibited from making or commissioning programmes that carry product placement, but programmes acquired from third parties and those made by BBC Worldwide will be subject to the new rules.

The new Regulations prohibit product placements of cigarettes, tobacco products or prescription-only medicines, as well as alcoholic drinks, if the programme is aimed at an under-18 demographic or encourages immoderate drinking. Not content, the UK government has expanded the list where the programmes are UK-produced or commissioned-television, or on-demand programmes (excluding films made for cinema), to also include smokeless cigarettes and smoking accessories; medicines (i.e., over-the-counter as well as prescription); any alcoholic drinks; infant and follow-on formula; food or drink high in fat, salt or sugar (HFSS); and gambling services. These were prohibited by the UK government to protect the health and welfare of viewers, especially children, but the result of this is that a vast swathe of potential advertisers who may have considered paying to place their products in programmes are now unable to do so.

The Regulations also fail to deal with the difference between product placement and brand placement. Can McDonalds, for instance, pay to have its name referred to (e.g., “Let’s all go to McDonald’s”) or would this be regarded as a promotion of an HFSS product.

There are also significant conditions that apply under the regulations. For example, the product placement must not influence content or scheduling to affect editorial independence; there must be no direct encouragement to purchase or rent the products; the programme must not give undue influence to the products; no subliminal advertising techniques can be used; and the way the product is included in the programme is not socially irresponsible and does not harm children. The point about “socially irresponsible” means it cannot “prejudice human dignity,” promote discrimination, encourage behaviour prejudicial to health, safety or protection of the environment, cause physical or moral detriment to children under 18, exploit children’s trust in parents, or show children in a dangerous situations.

As you may appreciate if you’re watching the advertising marketplace in the UK, there is no indication that advertisers will increase marketing budgets to take advantage of new rules, rather than changing their priorities within existing budgets. In addition, parties cannot enter into contracts stating how, how often, when or whether the product is even placed into a programme, because this is contrary to the requirements for editorial independence. The consequence may well be that advertisers may be reluctant to part with their funds if they have absolutely no control or influence over the way their product is portrayed or used in a programme, or indeed, whether it ends up being used at all.

If you want to keep updated on product placement developments in the UK, or if you need help in understanding how the new UK product-placement regulations may affect you, contact Christopher Hackford directly or, of course, you can always call me, Joseph I. Rosenbaum, or any Rimon attorney with whom you regularly work.

Tension Between Privacy and Digital Behavioral Marketing

A few days ago (April 21, 2010), Joe Rosenbaum made a presentation to the Entertainment & Media Law Committee of the eMIPS Section of the New York County Lawyers Association. The presentation described the legal issues and implications arising from the tension between consumer privacy and online and digital behavioral marketing—a hot topic and an area that continues to spark debate and continues to evolve, as technology persists in being an enabler of greater functionality. You can view or download a .PDF of the presentation right here: Privacy Issues in Online & Wireless Advertising & Entertainment: Brave New World or 1984?

Political Advertising

An article, written by Marina Palomba, former Legal Director of the Institute of Practitioners in Advertising, and now a partner in the London office of Rimon focusing on advertising law and regulation, has just been published and makes both informative and great reading. First published in Media Lawyer April 13, 2010, the article reviews just how far political ads can go. Read the entire article entitled, Political Advertising – Legal, Decent, Honest and Truthful?, and if you need legal guidance or representation, don’t hesitate to contact Marina Palomba in our London office.

FCC Caught by (not in) the Web

This post was written by Judith L. Harris.

Last week, the U.S. Court of Appeals for the D.C. Circuit handed down a unanimous decision in the case of Comcast v. the FCC, holding, in effect, that the Federal Communications Commission (“FCC”) could not use its ancillary jurisdiction under Title I of the Communications Act to exercise broad oversight over the activities of Internet service providers (“ISPs”). The case involved a 2008 decision under prior FCC Chairman Kevin Martin, seeking to enforce 2005 “net neutrality” principles by banning Comcast’s blocking or slowing of traffic from broadband subscribers using BitTorrent, an online peer-to-peer file-sharing technology. You can download and/or read the entire case here Comcast v. FCC.

 At first blush, the ruling appears to be a total victory for Comcast but,as no one knows better than Comcast itself, nothing in the Nation’s capital is ever that cut and dried. Thus, Comcast was wise to respond in a conciliatory fashion: “We are gratified by the court’s decision today to vacate the previous FCC order. Comcast remains committed to the FCC’s existing open internet principles, and we will continue to work constructively with this FCC as it determines how best to increase broadband adoption and preserve an open and vibrant internet.” .

After all, Comcast is awaiting the FCC’s judgment on Comcast’s $30 billion merger with NBC Universal. The Commission (along with the Department of Justice) has the power to sideline the deal altogether or to impose conditions that, depending on their severity, could place significant constraints on the business plan of the wanna-be merger partners. Stated another way: Comcast knows that its time for customer golf. Moreover, and possibly even more significant, the only options now available to a highly motivated FCC appear to be far more draconian to the ISP community than the relatively innocuous exercise of power that Comcast successfully challenged in court. The old adage “be careful what you wish for” comes to mind.

Not that any of this leaves the FCC smiling. From their perspective, the court’s ruling could cast a long shadow over the FCC’s ability to proceed with its pending rulemaking designed to codify even bolder net neutrality policies across all broadband platforms, including wireless. Moreover, the issue of the reach of the FCC’s jurisdiction over Internet services could constrain the FCC’s ability to deliver on President Obama’s promise of universal broadband access at high speeds and reasonable prices, and the FCC’s marquee project: implementation of the National Broadband Plan. That plan was released to Congress by the Agency just a few weeks ago (March 16), amid much fanfare and after a year’s worth of intensive effort involving no less than 36 public workshops, nine field hearings, and 31 public notices that produced 75,000 pages of public comment!

But, soldiers march forward. Only two days after the court’s decision, the FCC announced its “Broadband Action Agenda,” explaining the purpose and timing of more than 60 rulemakings and other proceedings recommended for action by the FCC in the plan, and quoting FCC Chairman Julius Genachowski defiantly proclaiming: “We are putting the National Broadband Plan into action,” immediately adding, “The court decision earlier this week does not change our broadband policy goals, or the ultimate authority of the FCC to act to achieve those goals.” Well, maybe not.

The ISPs will undoubtedly act with all deliberate speed to nail down the Comcast victory by vigorously lobbying Capitol Hill to oppose any effort by the FCC (and potentially other providers such as Google and, and tech companies such as Apple), to entreat Congress to mandate network neutrality or to enact legislation giving the FCC clear authority to regulate broadband. From the ISP perspective, even worse could be an effort by the FCC to unilaterally reclassify broadband transmission as a Title II telecommunications service, empowering the FCC (at least until the next court challenge) to regulate with impunity. This latter action, often referred to around town as the “nuclear option,” would only require an affirmative vote by three of the five Commissioners, a low hurdle given the unrestrained, unambivalent public reactions of all three of the Democratic Commissioners (including the Chairman) in the immediate aftermath of the court’s pronouncement.

This week (on April 14), Chairman Genachowski is scheduled to be the only witness at a hearing before the Senate Commerce Committee. That hearing was originally planned to focus exclusively on the National Broadband Plan. But now, in addition to examining the FCC’s substantive proposals, the hearing will likely focus on its power, in light of the Comcast decision, to move forward with its implementation plans. With lobbyists swarming the halls of power, expect fireworks. Hopefully, all-out war won’t be the only avenue considered. The public and private stakeholders would do well to take a deep breath and earnestly consider an immediate, good-faith attempt at serious industry self-regulation, with agreed-upon standards of conduct and meaningful enforcement mechanisms.

Time’s a-wasting. As the FCC moves to implement the administration’s broadband agenda, over at the Federal Trade Commission, net neutrality and open Internet advocates are undoubtedly pondering how best they can use their own powers to protect consumers from potentially abusive trade practices by vertically integrated ISPs with enormous market power in a world where the FCC might, in the end, have limited enforcement tools. Who knows, the FTC and the Antitrust Division might decide that its time to burnish tried and true antitrust laws as a way of curtailing any anti-competitive conduct. Comcast, to be sure, is ahead at half time but, as  they well know, there is still much more of the game to be played.

Whether you want to stay in touch and in tune with developments, you wonder how “net neutrality” and these skirmishes might affect your business; or if you need legal advice and representation, you need look no farther than our very own Judith L. Harris – she’s the authority, and she graciously contributed this timely and insightful post. Of course, you can always call me, Joseph I. Rosenbaum, or any Rimon attorney with whom you regularly work.