Legal & Government Affairs Update Issue 10 - 2017 | FAST

Legal & Government Affairs Update Issue 10 - 2017


High Court dominated by football and music rights claims

The three claimants who brought the most claims in the High Court for the year ending on 31 March 2017 were music and football bodies. Figures compiled by law firm RPC show 107 claims (by far the most) were brought by Phonographic Performance Ltd, a body that licences music and performing rights and collects royalties for tens of thousands of performers and record companies. The Football Association (FA) and the Performing Rights Society, another music licencing body, were next, with 39 and 27 claims respectively. It is worth noting that BT and Sky, both major broadcasters of UK domestic football, were also in the top 10 claimants in terms of the number of cases brought.

This suggests that both industries are taking a much firmer stance when it comes to protecting the value their intellectual property rights. It seems likely that this is a response to new technological developments, which make it easier to broadcast and access copyrighted materials. Does this signal that the big players are losing their grip? Or will legal action redress the balance by deterring would-be pirates and developing the legal framework around IP infringement?

RPC's analysis suggests that there has been particular rise in the number of cases brought by the FA. In 2013, the body brought only 5 claims in the High Court. It is suggested that this is due to a clampdown on pubs suspected of showing football matches without the proper licence. Ciara Cullen, partner at RPC, said "the FA is tackling illegal streaming and underpayment of licensing fees with a robust litigation strategy – and pubs are feeling the brunt of the challenge."

But is focussing on claims against pubs really the right strategy? According to the Campaign for Real Ale, a consumer organisation focussed on promoting British pubs, pubs are closing at a rate of 27 a week, primarily due to dwindling customer numbers. As pub attendance falls, so too does the number of people likely to be watching illegally broadcast matches in their local. Clearly illegal streaming in these venues is still a major problem and causes significant damage to sport and music businesses, but this can often look like a small problem when compared with the vast potential for online streaming. 

Online streams are primarily accessed by individuals in their home, and the numbers can be truly staggering. A notable recent case saw an unnamed individual agree to pay substantial damages to Sky after admitting illegally streaming the world title boxing match between Anthony Joshua and Wladimir Klitschko on Facebook. The stream gained over 600,000 viewers, dwarfing the number of people likely to view an illegally broadcast match in the pub.

However this can't be hitting broadcaster's pockets too hard; the latest Premier League TV deal is worth a record breaking £5.14 billion over 3 years. For the moment at least, sports broadcasters certainly have the resources to put up a serious fight against the pirates.

The same cannot be said for the music industry, which has seen a decade of declining sales and major upheaval due to the impact of technology. But there are now signs that industry is shaking off this slump. By engaging with online streaming and social media platforms, companies have adapted to the new ways in which people listen to music, and are benefitting as a result. Warner Music, the world's third largest record company is on track to increase its streaming revenue for the 2017 financial year (ending in September) by almost 50%. Industry bodies have suggested that 2017 will be the year in which internet streaming will surpass physical sales as the largest source of global recorded music sales. The value of the music industry is still well below its 90s peak and only time will tell whether it can reach the same heights in the digital age. At least things are finally looking more positive; there might be some wisdom adapting, as well as tacking the pirates head on.

A no-nonsense approach to all forms of infringement is still the foundation of IP protection, the effect of litigation as a deterrent shouldn’t be underestimated and it is often the only way to recouping some of the lost revenue. But it also seems evident that some liberalisation can be helpful in discouraging piracy by giving people more options to access content legitimately. But so far there are no signs that the tightly controlled Premier League TV deal will change its format. What is certain, however, is that the sports and music industries are increasingly on the lookout for those who flout the law: the battle is hotting up.


Legislative Updates

Data Protection Bill gets second reading in House of Lords and reaches Committee stage

On 10 October 2017, the Data Protection Bill (implementing the EU's General Data Protection Regulation in EU law) was given its second reading in the House of Lords. Regular readers will remember that this newsletter reported the Bill's first reading back in September, a formality in which the Bill is introduced to Parliament, but is not debated by Members or Peers. Now, however, Peers have had the opportunity to scrutinise the Bill and present their concerns.

The debate touched on key areas of the Bill, from the age of consent for online services, to the flow of EU-UK health data, to the limits of the national security and defence exemption. It has been reported that the Lords plan to table amendments relating to the journalism exemption and the role of the Information Commissioner's Office, and a large number of other amendments appear to be in the works. For example, an amendment recently laid down by Lady Kidron could compel tech companies to follow a code of practice aimed at protecting children online.

The next step is for the Bill to pass through the Committee stage, which started on 30 October 2017 and is set to run until the end of November. A group of Peers will go through the Bill line by line and prepare a detailed analysis. The committee will then present its findings to the House of Lords (the Report stage). The date for this has not yet been set, but you can be sure that this newsletter will keep you updated as the Bill progresses through Parliament and the features of this key piece of legislation are finalised.



EU launches public consultation on fake news and online disinformation

On 13 November 2017, the European Commission opened a consultation into the fake news and online disinformation. The EU is looking for feedback that will allow it to properly assess the scale of the problems associated with fake news and disinformation, whether current measures have been effective in reducing the spread of fake news and what should be done to reduce the spread of disinformation online.

Fake news is a label applied to any journalism which intends to mislead the reader in order to make a financial or political gain, often by using sensationalist language and made up facts to grab the reader's attention. The apparent increase in fake news online has been widely reported and is seen by some as a fundamental threat to Western democracy.

It is good then, that the EU is taking note and is looking for ways to tackle this problem. The spread of fake news online requires a firm international response. The best approach, however, remains unclear. Could we see stricter rules and enforcement against writers and the fake news sites themselves, or will more accountability be placed on the social media sites where fake news is shared and gains the most exposure?

The consultation will run until 23 February 2018 and aims to gather input from social media platforms, news organisations, academia, civil society organisations and citizens of the EU. Readers wishing to give feedback can do so by following the link below: