Chocolate-chip change – an update on the use of cookies

Cookies, the tiny files that are saved onto your hard drive when you visit websites, are used to store information about the way you interact with a website. The idea is that, by using this information, the website can give you a more efficient and personalised experience. Using cookies, advertisers can also collate information about the sort of websites that a user accesses in order to deliver adverts specific to a user’s ‘tastes’. This is a key part of a now lucrative industry: the UK’s online ad industry saw a turnover of £1.75bn in the first half of 2009. However the law relating to cookies changed today (26 May) and a number of issues will need to be addressed.

Previously: the “informed opt-out” system

Until now, it was enough that website operators made it possible for users to decline their cookie at some point. Usually the operator did this by maintaining a privacy policy which explained how cookies were used and how users could opt-out.

From 26 May 2011: the “prior, informed opt-in” system

Operators will need to obtain explicit consent from users before using cookies. There is debate over how this will be achieved in practice. Some suggest that internet browser providers could build-in settings that could allow users to specify what type of cookies they will accept in advance. Privacy groups argue that this does not represent ‘explicit consent’. The Information Commissioner suggests that browsers cannot presently be customised sufficiently well to enable a website operator to assume that a user has consented to downloading cookies via their browser settings.

Challenges and criticism

It has been said that the new rules overlook the technological complexity of the issue, that cookies play a crucial role in holding together the different layers of (often third party) content that make up modern commercial websites. A strict system of explicit consent for every cookie could unpick this construct, resulting in a poorer consumer experience as users are continually confronted with pop-ups seeking their consent. Some also speculate that tighter laws may lead to international publishers removing content from UK-targeted sites, or that key talent from within UK online advertising may relocate to less stringent locations like the US.

Guidance and enforcement

The Information Commissioner has noted that time will be needed for organisations to react to the new laws, so hard-line enforcement is likely to be some time away. In the meantime, the Commissioner has made it clear that organisations must be able to show that they are taking steps in response to the new rules. To help them do this, the Commissioner has published guidance which encourages focus on key areas such as:

  • the type and purpose of cookies that are used;
  • the level of intrusiveness involved; and
  • the best way for gaining users’ consent.

The enforcement agencies will have key roles to play in finding a balance between privacy concerns, consumer convenience and commercial efficiency. The months ahead will shed light on what these laws will come to mean in practice.

Stewart Dunbar
Trainee Solicitor

Facebook? (Face getting your books?)

In the current era of social networking with sites such as Facebook and Twitter being commonplace for many, employers are faced with potentially difficult decisions as to how such sites are tolerated within the workplace.  Imagine an employee made inappropriate comments directly to a client or customer of the employer.   Such conduct would likely be worthy of disciplinary action if not dismissal.  However, what if such comments were made using the forum of social networking sites?  The decision of the employment tribunal in Preece v JD Wetherspoons plc will be of interest to employers with similar questions.

A pub manager was dismissed for gross misconduct having made inappropriate negative comments on Facebook about two of her customers who had threatened her.   The tribunal held that in the circumstances the dismissal was fair.  The comments in question were made whilst the employee was at work.  The tribunal took the view that the comments seemed more like a joke between friends and it did not give any weight to the employee’s belief that her privacy settings meant that only her close friends could see the comments.  The tribunal found that a wider audience was able to view her entries, including relatives of the customers in question.  Accordingly, the manager was found to have breached the employer’s email and internet policy which specifically referred to the use of such sites during working hours.  The employer’s handbook specifically stated that gross misconduct would include breaches of this policy and conduct which affected employee or customer relations or brought the Wetherspoons’ name into disrepute.

The claimant employee argued that the dismissal was contrary to her right to freedom of expression under Article 10 of the European Convention on Human Rights.  However, the tribunal found that the employer’s action was justified in view of the risk of damage to its reputation.

The decision is likely to be of interest to both employers and employees.  Employers should take from the decision that if they want to deter employees from using sites such as Facebook during working hours or to make work related comments, a policy to that effect would be beneficial to form the basis for disciplinary action.  From an employee perspective, the decision should make employees think very carefully about making any work related comments on such sites or using them during work hours.

Jack Boyle
Trainee Solicitor

The Tenancy Deposit Schemes (Scotland) Regulations 2011

These Regulations, which came into force on 7 March 2011, make provision about tenancy deposit schemes for the purposes of Sections 120-122 of the Housing (Scotland) Act 2006.

The main objectives of the Regulations are:-

  • To tackle the problem of unfairly withheld deposits;
  • To ensure that deposits are safeguarded throughout the duration of the tenancy; and
  • To ensure that deposits are returned quickly and fairly, particularly where there is a dispute over the return of the deposit, or a proportion of it, to tenant or landlord.

Such schemes require to be approved by the Scottish Ministers and will safeguard tenancy deposits. The Regulations set conditions which schemes must meet before they will be approved and establish the regulatory framework for the schemes.

The Regulations impose duties on landlords to pay a tenancy deposit to an approved scheme, to provide information to the tenant, and to ensure that a deposit is held by an approved scheme throughout a tenancy. The scheme administrator must be a fit and proper person and the Scottish Ministers are allowed to give financial assistance in connection with an approved scheme if they wish to do so. There are sanctions for any failures to comply with the duties imposed.

The establishment of a scheme to safeguard tenancy deposits supports the wider policy objective of raising standards of property management in the private rented sector. It compliments other policies such as national landlord registration, voluntary landlord accreditation and the Repairing Standard, which also aim to raise standards in the sector. To add to this, the Property Factors (Scotland) Bill has now also been approved by the Scottish Parliament and will be implemented by October 2012 or earlier.

Nicola McCafferty
Solicitor
Commercial Property

Scotland’s Spin-Out Success

Spinouts UK, a body that lists all spin-outs from UK universities, has suggested that Scottish universities produced more spin-out enterprises than any other region in the UK in the past decade. Spin-outs are created by universities seeking to harness the commercial potential of the intellectual property produced through their research and development functions.  These enterprises aim to make such ‘products’ marketable: applying business principles to secure funding, register patents and license the use of innovations.

Recent squeezes on funding for education may see even more spin-outs appearing as universities attempt to maximise returns on their intellectual property.  The climate is favourable for such set-ups: there are gaps in the market following the turbulence experienced by traditional companies.  There is also an ever expanding pool of talented personnel available as high calibre graduates struggle to find work in the mainstream job market and experienced employees in industry suffer from lay-offs. 

With success stories such as Dundee’s Cypex, Tayside Flow Technologies and Ceimig, as well as PhotoSynergy of St. Andrews, it is clear that spin-outs have the potential to play an important role in boosting Scotland’s economic recovery.

The corporate and commercial team at Blackadders is experienced in dealing with spin-outs and is well equipped to advise in this specialist area.

Stewart Dunbar

Trainee Solicitor