UK: E-Commerce News – RIPA Code of Practice, Online Gaming in the UK, Hague Convention on Jurisdiction & Foreign Judgements, Data Transfers to Non- EU Countries, Electronic Signatures

Public Consultation on the Draft RIPA Code of Practice

The Home Office put a draft Code of Practice for the Regulation of Investigatory Powers Act (RIPA) 2000 out to public consultation on 13^th August 2001. The draft code lays down the guidelines that public authorities should follow when accessing communications data. While it does not apply to private businesses, it does set the tone for things to come if this changes. The draft code will:-

• explain and define in detail the provisions of access to communications data; and
• set down the authorisation procedure and the information which must be obtained before an authorisation can be granted or a notice given.

The RIPA, which received Royal Assent just over a year ago, is an extremely controversial piece of legislation. The Act gives a wide range of public authorities unprecedented access to communications on public networks and private networks such as internal e-mail systems. The Act has also been criticised for failing to comply with either the Data Protection Act or the Human Rights Act. In addition to privacy considerations, opponents of the Act have raised concerns about the cost of compliance with its provisions. Consequently, many commentators believe that the Code of Practice is imperative to ensure the Act is implemented as originally intended and if public authorities are to avoid accusations of civil rights abuses.

The draft codes lists examples of conditions that must be met before public authorities are entitled to access communications data: for example, where interception is in the interests of national security; for the purpose of preventing or detecting crime or preventing disorder; or in the interest of public safety.

The consultation period began on Monday 13^th August and will finish on Friday 2^nd November 2001. The press release states "the Government invites comments on all aspects of the code and will give careful consideration to consultation responses before the code is laid in Parliament".

Copies of the code are available from the Home Office website at http://www.homeoffice.gov.uk/ripa/ripact.htm

The Government intends to publish a summary of consultation responses on the Home Office website once the consultation process has ended.

By virtue of gaming and gambling legislation which is now over 30 years old, the provision of on-line gaming is presently not legal in Great Britain. This is essentially due to the requirement that a punter be present in the room in which the gaming takes place. The Department for Culture Media and Sports has commissioned an independent review of the controls on gambling in Great Britain, which was chaired by Sir Alan Budd. The report has now been delivered to the Government and it has requested views on the proposals of the report - which can be sent to gamblingreview@culture.gov.uk prior to 31 October 2001.

In addition to dealing with gambling generally, the report makes several recommendations concerning on-line gaming. The fundamental recommendation of the report concerning on-line gaming was that it should be regulated. This was due to the belief that Internet gaming would greatly increase the accessibility of gambling, which it is believed may exacerbate the prevalence of problem gambling and expose new audiences with particular vulnerabilities, such as children, to these vices. It was recognised that it would be virtually impossible to regulate offshore sites accessible by British punters, but that British sites should be regulated so that the punter can have a choice of gambling in a regulated environment, or can take a chance with an unregulated overseas site. In contrast, the report found no need to further regulate on-line betting - which was described as gambling events which received entries online (i.e., using a telephone connection), but where the event actually occurred off-line.

The report made the following recommendations :

1. that an on-line gaming operator seeking a license from the Gambling Commission should, at the minimum : be registered as a British company; locate its server in Great Britain; and use a UK web address for its gambling site;

2. that it not be an offence for punters in Britain to use unlicensed sites, but they do so at their own risk. Similarly, it will not be an offence for unlicensed operators to allow UK punters to use their sites, although it is recommended that there be a prohibition on advertising such sites in the UK;

3. that while on-line gaming should be permitted, on-line gaming software systems should be tested and inspected by the Gambling Commission to ensure amongst other things, that the software operates on a random basis;

4. that the Gambling Commission set the parameters for the development of on-line games;

5. that punters are made aware of the game rules and the terms and conditions of play on on-line gaming sites before play commences;

6. that all punters that register to play on-line should be properly identified before they are permitted to play. The Gambling Commission should issue guidelines to ensure that identification standards are comparable with those of off-line casinos;

7. that on-line operators should make any payments only to the debit or credit card used to make deposits into the punters account, or by cheque to the punter;

8. that any prizes won by minors be forfeited;

9. that on-line operators should be required to set up facilities that enable players to set maximum stakes and limits, and to self ban;

10. that on-line operators set up clocks and counting systems that are displayed on the screen at regular intervals;

11. that online gaming sites provide information about problem gambling treatment and services, and provide links direct to those services;

12. that the Gambling Commission establish a portal on its website by listing licensed on-line gaming providers. In addition, regulated sites should display the Gambling Commission's kitemark. It should be an offence for an operator to claim falsely that a site is licensed by the Gambling Commission, or to make unauthorised use of the kitemark;

13. that on-line gaming sites that are licensed by the Gambling Commission be permitted to advertise in Great Britain; and

14. the Gambling Commission have the power to take action in relation to premises, not licensed as gambling premises, in which terminals or other facilities are supplied primarily for accessing on-line betting services.

Full details of the report can be found at http://www.culture.gov.uk/ROLE/gambling_review.html. Christopher Rees will be speaking on the database law implications of the proposals at a conference in London on 15th November. If anyone would like further details of the conference, please contact Christopher Rees at Herbert Smith.

As reported in the last edition of the Bulletin, delegates from 50 countries met in The Hague from 6 June to 22 June 2001 to negotiate the proposed Hague Convention on Jurisdiction and Foreign Judgements. The proposed treaty aimed to harmonise laws that apply in private cross border disputes, and sought to deal with disputes involving intellectual property (including patents), libel and defamation. Under this proposed Convention signatory countries would be required to agree to enforce legal judgments which are entered in other signatory countries.

However, whilst the delegates unanimously confirmed the importance they attach to the project, no agreement could be reached as to the substantive content of the treaty. The main reason for this failure was a fundamental difference of opinion between the EU and the US.

The EU has already decided that, from March 2002, European customers will be able to enforce judgments made in member states other than their own, and would like this model to apply globally, but the US delegation has argued that such a move would damage free trade and free speech. The Europeans have said in response to this that the treaty would deal only with jurisdiction, and would not specify which laws apply to a dispute. Furthermore, successful claimants can already sue in other countries to get the judgment enforced, so the proposed treaty would only make this process simpler. This argument has not won over the Americans, however, who replied that the treaty would just blur the distinction between jurisdiction and applicable law. Their main concern is finding the US subject to Europe's stricter consumer protection laws.

Business-to-consumer contract disputes are not the only area of disagreement. There is also a body of US ISPs, civil liberty groups and privacy advocates who oppose provisions in the proposed treaty which deal with libel, defamation and copyright infringement. They are concerned that countries with restrictive freedom of speech laws (such as China and Ukraine who are also signatories to the Hague Treaty) might use the treaty as way of clamping down on websites from more liberal regimes.

The delegates also failed to resolve patents and trademarks issues. Countries with strong protection of intellectual property rights, such as the UK and the US, are wary of giving control of such matters to courts in other jurisdictions which do not protect such rights so strictly.

As a consequence, no agreement was reached and the parties have only undertaken to resume the discussions in 2003, with a further preliminary meeting of the Commission on General Affairs and Policy in early 2002. This meeting of the Commission will examine whether conditions are met for a successful conclusion of these negotiations, including sufficient agreement on the way to approach those critical areas where consensus is still lacking, and a schedule for further negotiations.

Applicable from 3 September 2001, the European Commission's Decision setting out standard contractual clauses for data transfers to non-EU countries will provide organisations with a practical contractual means of complying with the requirements of the Directive on data transfer to non-EU countries.

The 8th data protection principle in Schedule 1 of the Data Protection Act 1998 (which implements Directive 95/46/EC within England and Wales) permits transfers of personal data to countries outside the EU only where there is an "adequate level of protection" for the data, unless one of a limited exemptions in Schedule 4 applies (for example, the data subject has given his consent or the transfer is necessary for the performance of a contract).

The standard contractual clauses are neither compulsory nor are they the only method of transferring personal data to recipients outside the EU. Indeed, the contractual clauses are not necessary where the transfers of data are to either Switzerland or Hungary, both of which the Commission has previously recognised as providing adequate protection of data, or where the transfers are to organisations adhering to the US Safe Harbour Privacy Principles. However, organisations will find these standard contractual clauses a straightforward means of ensuring "adequate protection" for personal data transferred to countries outside the EU since Member States are obliged to recognise the standard contractual clauses as providing adequate safeguards and fulfilling the requirements of the Directive.

The standard contractual clauses may be accessed at http://europa.eu.int/comm/internal_market/en/dataprot/news/index.htm. They may also be used in a wider contract or may be added to, as long as the standard contractual clauses are not contradicted or prejudiced by the other contractual clauses. The clauses have however, been the subject of criticism from many commentators as being overly long and complex.

This Decision is only a first step in developing contractual solutions for the transfer of personal data world-wide. Other specific types of transfers and solutions are in the pipeline. The Commission is presently consulting Member States and Data Protection Authorities on a new draft Decision concerning standard contractual clauses for the transfer of personal data from data controllers within EU to data processors in non-EU countries.

The European Commission has recently cleared agreements between a number of major European and non-European banks (including ABM-AMRO, Bankers Trust, Bank of America, Barclays Bank, Chase Manhattan Bank, Citibank, and Bank of America) creating a global network (known as Identrus) used to authenticate electronic signatures and other aspects related to financial and electronic commerce transactions. Identrus, established as a joint venture company by the various participants, filed notifications with the Commission seeking clearance in April 1999 in order to enable those participants to operate as individual and competing certification authorities for the purpose of secure e-commerce transactions.

The Commission commented in relation to this clearance that its "negative clearance decision illustrates the importance the Commission attaches to development of competitive e-commerce related markets. The European Union has already in its Directive on electronic signatures of 1999 recognised that global certification authority services over open networks are fundamental for the success of e-commerce in Europe".

Previously we reported that The Internet Corporation for Assigned Names and Number (ICANN) announced seven new top level domains (TLDs) - ".biz", ".name", ".info", ".pro", ".museum", ".aero" and ".coop". Celebrities, politicians and other famous personalities and indeed their fans will soon be able to bid for the latest TLD - ".name".

London based Global Name Registry is the Registry accredited to launch the ".name" TLD. The first assigned .name domain names will go live in mid-November. However, the so-called "sunrise period" (a 30 to 45 day window during which trade mark owners may stake a claim to the domain name containing their mark) officially opened on 15^th August to authorised resellers who in turn will sell them on to consumers.

The ".name" domain is designed to give all individuals an equal claim to a domain that matches their identity. In other words, Tom Cruise the actor is not guaranteed to get "Tom.Cruise.name" if Tom Cruise the teacher manages to get there first.

The allocation of the latest batch of domain names which includes ".info" and ".biz" has already created controversy. ".info" and ".biz", which are due to go live this autumn, have already been snapped up by individuals accused of cyber-squatting and there is talk of law suits by businesses seeking to alter the pre-registration process.

Domain name disputes involving celebrities, politicians and other famous personalities are filed at a regular basis. Almost 3000 domain name disputes have gone before the World Intellectual Property Organisation (WIPO), an international organisation appointed to deal with such disputes and other aspects of intellectual property protection, in the past two and a half years. In celebrity-related domain name disputes, celebrities win their claim on average, 80% of the time usually by proving that the site is being used in bad faith by the registered owner. The introduction of the new ".name" domain later this year will undoubtedly lead to a new wave of domain name disputes.

© Herbert Smith 2002

For more information on this or other Herbert Smith publications, please email us.