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July 24, 2013

App purchases: legal issues

The Commonwealth Consumer Affairs Advisory Council (CCAAC) has released a report on App purchases by Australian consumers on mobile and handheld devices.

The report discusses issues related to the purchase and use of apps which fall into five broad categories:

  • Inappropriate information — important information related to the use of apps, including with respect to billing and in-app purchases, may be absent or incorrect.
  • Ineffective disclosure — consumers may be provided with information related to the use of apps, including with respect to billing and in-app purchases; however, this information is not presented in a manner which is easily accessed or understood by the user.
  • Lack of familiarity with a new product — consumers lack familiarity with app markets, handheld devices and new business models (for example freemium apps) with consumers unaware of new risks that may exist.
  • Unsupervised use, and targeted marketing towards children — devices may be used in a manner not anticipated by the owner where in-app marketing is targeted to children (and where the owner’s billing information is saved). Other apps may present material that is not age-appropriate to the user, including the advertising of adult services such as online gambling.
  • Difficulties for consumers when seeking to make a complaint or seeking a refund —consumers may lack practical options for redress when experiencing a problem, including difficulties finding contact information and where app stores encourage users to contact the app developer for refunds.

The Australian Consumer Law (ACL) requires an app developer’s representations about the functionality of an app to be accurate and provides for remedies in the event that they are not. The consumer guarantee provisions are capable of applying to the purchase of apps. In addition, under the unfair contract terms provisions of the ACL, it is unlawful to include certain terms in standard form consumer contracts (for example, contracts for supply of goods or services for personal, domestic or household use or consumption).

The report concludes that there are some basic improvements that should be made by app stores to improve outcomes for consumers.

Regulation aplying to these issues include:
• the common law of contract, including in relation to the legal capacity of minors and children to enter contracts;
• the law relating to electronic transactions (Electronic Transactions Act 1999 (Cth));
• state and territory sale of goods laws (for example, the Goods Act 1958 (Vic));
• state and territory laws relating to minors who enter into contracts (for example, the Minors (Property and Contracts) Act 1970 (NSW));
• laws relating to pre-contractual conduct and disclosure obligations which may apply when accessing payment facilities on mobile devices (National Consumer Credit Protection Act 2009 (Cth));
• the law protecting personal information that is collected by companies (Privacy Act 1988 (Cth));
• Government agencies and industry ombudsmen with responsibilities for ensuring appropriate industry conduct including, the Australian Competition and Consumer Commission (ACCC), the ACMA and the Telecommunications Industry Ombudsman (TIO); and
• The Australian Guidelines for Electronic Commerce.

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Posted 24th July 2013 by David Jacobson in Web/Tech

April 3, 2013

Thinking of moving to the cloud?

If your business is thinking of using a remote hardware or software service (eg over the Internet) instead of one run on a server in your own premises then here are some issues for you to consider, apart from the commercial issues of price, service and support:

  • will your business be able to continue if there is a loss of cloud computing services?
  • what protections are there for the confidentiality of business and customer data?

How do you manage the risks? Apart from specific contractual provisions (which we can advise you on):

  • Find out where the servers and the back up servers are located
  • What are the guaranteed service levels? What rebate do you get for downtime? Even Google, Amazon and Microsoft have downtime: see here
  • What happens to your data when the licence ends? Will it be deleted?
  • What is your exit strategy, including extracting data after termination (what format is it in?)
  • Are you able to back up your data continuously to your own local site?
  • Does the service comply with Australian privacy laws (especially if the servers are overseas)? Are there adequate systems and
    procedures in place to protect the privacy of your information?

Whilst there are advantages in cloud services (eg savings on capital and maintenance costs of your own servers), there are risks you need to understand and manage.

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Posted 3rd April 2013 by David Jacobson in Legal, Risk management, Web/Tech

February 12, 2013

Google not liable for misleading sponsored links

In Google Inc v Australian Competition and Consumer Commission [2013] HCA 1 the High Court of Australia decided that Google did not engage in conduct that was misleading or deceptive by displaying sponsored links that were misleading or deceptive.

It overturned a decision of the Full Court of the Federal Court of Australia (discussed here).

The ACCC claimed that particular search results displayed by the Google search engine between 2005 and 2008 conveyed misleading and deceptive representations, and that, by publishing or displaying those search results, Google engaged in conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth)

The High Court reasoned as follows:

"Google did not author the sponsored links; it merely published or displayed, without adoption or endorsement, misleading representations made by advertisers....

Google emphasised that each relevant aspect of a sponsored link – the headline, the advertising text, the advertiser's URL, the keywords and the use of keyword insertion – was specified by the advertiser, and that Google merely implemented the advertiser's instructions. Google submitted that the technical facilities it provided through the AdWords program were different in kind, but not in principle, from facilities provided to advertisers by other intermediaries such as publishers and broadcasters. Google further contended that any commercial association or affiliation between an advertiser and another trader was something peculiarly within the knowledge of the advertiser, and was not a matter within Google's expertise. Google also relied on the primary judge's findings that ordinary and reasonable users of the Google search engine would have understood that the sponsored links were advertisements paid for by advertisers to promote their products and businesses, and that Google was merely passing them on for what they were worth....

That the display of sponsored links (together with organic search results) can be described as Google's response to a user's request for information does not render Google the maker, author, creator or originator of the information in a sponsored link. The technology which lies behind the display of a sponsored link merely assembles information provided by others for the purpose of displaying advertisements directed to users of the Google search engine in their capacity as consumers of products and services. In this sense, Google is not relevantly different from other intermediaries, such as newspaper publishers (whether in print or online) or broadcasters (whether radio, television or online), who publish, display or broadcast the advertisements of others. The fact that the provision of information via the internet will – because of the nature of the internet – necessarily involve a response to a request made by an internet user does not, without more, disturb the analogy between Google and other intermediaries. To the extent that it displays sponsored links, the Google search engine is only a means of communication between advertisers and consumers. "

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Posted 12th February 2013 by David Jacobson in Legal, Web/Tech

November 14, 2012

Google Inc liable for defamation

In Trkulja v Google Inc LLC & Anor (No 5) [2012] VSC 533 in the Supreme Court of Victoria the jury decided that the plaintiff established an entitlement to damages against Google Inc for a defamatory imputation in a photo that “the plaintiff was so involved with crime in Melbourne that his rivals had hired a hit man to murder him”.

The plaintiff’s case against Google Inc, in respect of an article, failed because Google Inc established the defence of innocent dissemination for the whole of the period of publication. The plaintiff’s case against Google Australia failed.

The trial judge rejected Google Inc's application for judgment notwithstanding the jury’s verdict.

He awarded damages of $200,000 against Google Inc.

Google Inc’s first submission in support of its application for judgment notwithstanding the jury’s verdict was that, as a matter of law, Google Inc was not a publisher of the images.

Google Inc argued that to establish its liability for publication the plaintiff was required to lead evidence showing, first, Google Inc was in some degree accessory to the communication of the material complained of and second, that Google Inc had the required mental element, namely, an intention to publish the Images matter.

Judge Beach said:

"The plaintiff accepted (correctly in my view) that he had to establish that Google Inc intended to publish the material complained of. While much was made by counsel for Google Inc of the fact that there was no human intervention between the request made to the search engine and the publication of search results, and of the fact that the system was “fully automated”, the plaintiff’s point was that Google Inc intended to publish everything Google’s automated systems (which systems its employees created and allowed to operate) produced. Specifically, the plaintiff contended that Google Inc intended to publish the material complained of because while the systems were automated, those systems were the consequence of computer programs, written by human beings, which programs were doing exactly what Google Inc and its employees intended and required. On this basis, it was contended that each time the material complained of was downloaded and comprehended, there was a publication by Google Inc (the operator and owner of the relevant search engines), as intended by it. So it was submitted by the plaintiff that Google Inc was a publisher throughout the period in respect of which complaint was made...

The question of whether or not Google Inc was a publisher is a matter of mixed fact and law. In my view, it was open to the jury to find the facts in this proceeding in such a way as to entitle the jury to conclude that Google Inc was a publisher even before it had any notice from anybody acting on behalf of the plaintiff. The jury were entitled to conclude that Google Inc intended to publish the material that its automated systems produced, because that was what they were designed to do upon a search request being typed into one of Google Inc’s search products. In that sense, Google Inc is like the newsagent that sells a newspaper containing a defamatory article. While there might be no specific intention to publish defamatory material, there is a relevant intention by the newsagent to publish the newspaper for the purposes of the law of defamation...

in my view, it was open to the jury to conclude that Google Inc was a publisher – even if it did not have notice of the content of the material about which complaint was made. Google Inc’s submission to the contrary must be rejected. However, Google Inc goes further and asserts that even with notice, it is not capable of being liable as a publisher “because no proper inference about Google Inc adopting or accepting responsibility complained of can ever be drawn from Google Inc’s conduct in operating a search engine”...

This submission must also be rejected. The question is whether, after relevant notice, the failure of an entity with the power to stop publication and which fails to stop publication after a reasonable time, is capable of leading to an inference that that entity consents to the publication. Such an inference is clearly capable of being drawn in the right circumstances (including the circumstances of this case). Further, if that inference is drawn then the trier of fact is entitled (but not bound) to conclude that the relevant entity is a publisher. Google Inc’s submission on this issue must be rejected for a number of reasons, the least of which is that it understates the ways in which a person may be held liable as a publisher."

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Posted 14th November 2012 by David Jacobson in Legal, Web/Tech

April 2, 2012

Copyright and the digital economy: Review draft terms of reference

The Attorney-General has released draft terms of reference for the Australian Law Reform Commission's review of copyright and the digital economy.

Amongst other things, it is proposed the ALRC is to consider whether further exceptions should be provided to:
• facilitate legitimate use of copyright works to create and deliver new products and services of public benefit; and
• allow legitimate non-commercial use of copyright works for uses on the internet such as social networking.

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Posted 2nd April 2012 by David Jacobson in Legal, Web/Tech

September 23, 2011

ACCC misleading conduct action against Google dismissed

In Australian Competition and Consumer Commission v Trading Post Australia Pty Ltd [2011] FCA 1086 in which Google Inc was the Second Respondent the Federal Court has published its decision in respect of proceedings originally instituted in 2007 against Google (background). The ACCC alleged misleading and deceptive conduct in relation to sponsored links that appeared on the Google website.

One of the claims made by ACCC related to the use of "Kloster Ford": the business names "Kloster Ford" and "Charlestown Toyota" appeared in the title of Google sponsored links to Trading Post’s website. Kloster Ford and Charlestown Toyota are Newcastle car dealerships who competed against Trading Post in automotive sales. In other words, the ACCC said that Trading Post bought those names for use to link to its site when certain automotive sales searches were performed on Google even though Trading Post had no association with those names.

The ACCC had previously settled its action against Trading Post and declarations were made about its misleading conduct. The decision therefore mostly related to Google.

The ACCC alleged that the appearance of organic search results and sponsored links was essentially the same and therefore misleading. It also complained about misleading keywords in the headlines of particular advertisements.

After considering Google's technical evidence and trade marks policy Justice Nicholas dismissed the claims against Google.

He concluded:

"I do not accept that ordinary and reasonable members of the class would be likely to be lead to believe that either top left or right side sponsored links were not advertisements or that they were no different to organic search results. This conclusion applies not only to the Kloster Ford advertisement and the Charlestown Toyota advertisement but also to top left sponsored links and right side sponsored links generally..."

"Once it is accepted that the ordinary and reasonable members of the class would have understood, as was the fact, that the Kloster Ford advertisement and the Charlestown Toyota advertisement were advertisements, then it seems to me to follow that they would be most unlikely to have understood that any information conveyed by those advertisements was endorsed or adopted by Google. They would have understood that the message conveyed was a message from the advertiser which Google was passing on for what it was worth."

UPDATE 14 October 2011: The ACCC has appealed the decision
UPDATE 10 April 2012: ACCC's appeal successful.
UPDATE 12 February 2013: Google's High Court appeal succeeds

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Posted 23rd September 2011 by admin in Legal, Web/Tech

April 5, 2011

Roadshow v iiNet: film studios appeal to High Court

Following the dismissal of their appeal to the Federal Court Full Court (Roadshow Films Pty Limited v iiNet Limited [2011] FCAFC 23) from the trial judge's decision that iiNet did not authorise the infringements of copyright by the iiNet users, the film studios are seeking special leave to appeal to the High Court.
UPDATE 12 August 2011: special leave granted.
UPDATE 20 April 2012: High Court dismisses appeal.

In lengthy judgments the Full Court judges split 2:1 against the film studios but were all critical of iiNet and Judge Emmett suggested a better way in which the film studios should have given notice of their concerns.

For detailed analysis see Kimberlee Weatherall's post here.

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Posted 5th April 2011 by admin in Legal, Web/Tech

March 7, 2010

Sinch online legal services conference

I was pleased to be invited to speak at Simon Lewis' online legal services conference in Sydney on Thursday 4 March.

There was a great mix of "old hands", overseas speakers and local trailblazers with plenty of ideas and examples.

It was good to see 3 "biglaw" firms participating.

Adrian Dayton has posted his keynote slides here.

I gave an overview of Langes' online model.

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Posted 7th March 2010 by David Jacobson in Legal, Web/Tech

October 15, 2008

Telepresence

I've started travelling again and am experiencing the syndrome of the late flights getting later as planes are cancelled or put back because of earlier flights' engineering problems etc.

So Connie Moore's post on telepresence (the technology) and her first use of it is an encouraging sign.

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Posted 15th October 2008 by David Jacobson in Web/Tech

September 25, 2008

Lessons learned from Cyber Storm II: international cyber security exercise

A detailed report outlining Australia’s involvement in the recent international cyber security exercise, Cyber Storm II, has been released by Attorney-General Robert McClelland.

Cyber Storm II was held in March in conjunction with the US Department of Homeland Security National Cyber Security Division, the UK's Centre for the Protection of National Infrastructure, Public Safety and Emergency Preparedness Canada and New Zealand's Centre for Critical Infrastructure Protection.

Its key finding was that "Effective response is enhanced by routinely reviewing and testing Standard Operating Procedures (SOPs), Incident Response Plans and/or crisis management arrangements."

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Posted 25th September 2008 by David Jacobson in Web/Tech
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