Talking Shop April 2020

This newsletter focuses on key news and updates for retail and consumer-facing businesses around the world, including our regular briefings on the COVID-19 pandemic and its impact on the sector.

At the end of the newsletter, you can also find details of our recent news and upcoming events, which we think might be of interest to you and your team.

Please get in touch, or visit our webpage for more information about Bird & Bird's Retail & Consumer Group.

In this newsletter:

• COVID-19
• Competition
• Social Media
• Tech
• News & Events

COVID-19

Regulatory guidance for retail business manufacturing and supplying personal protection products in the UK

Retail businesses across the world are repurposing their production lines in an effort to address the shortage of personal protective equipment (PPE) and hand sanitiser, which are crucial to the fight against COVID-19. French luxury group, LVMH, and Estée Lauder Companies have started making hydroalcholic gel in factories previously reserved for the production of luxury beauty products. Fashion giants, including H&M and Burberry, are also pivoting their supply chains to make PPE for front-line medical staff.

Whilst the speed of response from the retail sector has been extraordinary, companies should remain vigilant that any new products comply with regulatory requirements. To assist with this, the UK government, alongside regulatory bodies, have relaxed the regulatory regime for certain products needed to combat COVID-19. This article outlines the key requirements that companies producing PPE or hand sanitiser for the first time should be aware of.

Rent rebate scheme to support sectors affected by the COVID-19 outbreak in Sweden

The COVID-19 virus outbreak has had a major economic impact across Sweden, especially on companies operating in the restaurant, hotel and retail sectors. In order to support otherwise viable companies through the crisis, and to reduce the number of jobs lost, the Swedish Government has presented several crisis packages with measures to reduce costs, strengthen liquidity and improve access to financing.

Among other generally applicable initiatives, a specific rent rebate scheme has been introduced for the hotel, restaurant and retail sectors. The scheme was approved by the European Commission under the State aid Temporary Framework on 15 April and the Government introduced the scheme on 16 April through the Regulation (SFS 2020:237) on state aid when certain tenants obtain a rent rebate.

COVID-19 in Poland: a retailers' perspective

On 19 April 2020, the Polish Council of Ministers issued a decree that changes previous restrictions implemented by the Decree of 10 April No. 658 to prevent the spread of COVID-19 in Poland. This Decree introduces a number of regulations that affect the retail sector.

The Polish government decided to commence a gradual withdrawal from the restrictions. On 20 April, the first stage of lifting the restrictions came into effect. The process will be divided into three more stages. The dates the remaining stages enter into force will be determined on an ongoing basis based on the dynamics of new COVID-19 cases.

COVID-19 update for retailers in the UAE

As seen in other countries, the UAE has also started to ease some of the restrictions imposed in response to Covid-19. Whilst parts of shopping malls (such as ATMs, supermarkets and pharmacies) have remained open throughout, there will be a gradual reopening of the other parts of shopping malls.

Both the Government of Dubai and the Abu Dhabi Department of Economic Development have issued their own directives and guidelines to assist mall operators reopening their shopping malls.

Reopening will be subject to a number of precautionary measures, many of which consumers are now accustomed to – such as mandatory PPE (masks and gloves), temperature checks for anyone entering and social distancing signage.

In this article we have outlined some additional restrictions which are less familiar, but that retailers need to know.

Changes in the operation of Hungarian companies due to the COVID-19 pandemic

Government Decree 102/2020 (IV. 10.) (the “Decree”), which entered into force on 11 April 2020, amends the ordinary decision-making rules of companies in response to the state of emergency. In general, the purpose of the Decree is to ensure an uninterrupted operation even in the current emergency situation.

Competition

US food delivery companies hit with anti-trust law suit

Locked down or not, customers increasingly rely on deliveries from local restaurants. What if delivery companies imposed "no price competition clauses" on restaurants as a requirement for participating in delivery apps? Essentially, restaurants would agree to not to charge dine- in customers lower prices than those charged to delivery companies (before the delivery markup), with a view to driving customers to the aggregator's platform.

Should these types of agreements be viewed as price fixing? This issue is set to be tested in the US, following a proposed class action complaint recently filed before a New York City federal court.

Read more >

Social Media

Social media helps consumers understand the brands they use every day, but what does it all mean for franchisors?

It’s 2020 and everyone is on social media. Whether it’s a microblogging social networking site or a photo and video sharing platform, it seems every brand is trying to connect more with consumers by using social media. Social media is also big business. One post from a user with great engagement can command up to hundreds of thousands of dollars.

The beauty of social media is that both new and old brands are using it to showcase their “personalities”. Whether it’s through their use of memes or funny online spats, with some of our favourite fast food brands regularly getting involved, social media is where consumers go to get a better understanding of the brands they use every day. But what does it all mean for a franchisor?

Read more >

Swedish case law: Influencers have to properly identify marketing content, but only if it is marketing

A Swedish influencer and a sunglass company agreed that the influencer was to publish one post on Instagram, and one post on her blog to market the sunglass company. The influencer got financial compensation from the company and the company also paid for a photographer and a trip to Zanzibar, where the photos for the posts were taken.

During a supervisory action, the Swedish Consumer Agency noticed a total of 30 social media posts published by the influencer (on Instagram, Facebook, the influencer's blog and YouTube) in which the influencer was posing with sunglasses from the company or which pictured only the sunglasses. The Consumer Ombudsman filed a summons application against the influencer's company due to these posts, claiming that the posts constituted unfair marketing and therefore should be prohibited.

Read more >

Tech

Blockchain and smart contracts in retail

Blockchain has recently celebrated its tenth anniversary, but for many in the retail sector, it is still seen as "something for the future". However, many retailers and tech companies are actively looking at ways to deploy blockchain technology (and its close relation, smart contracts) in their business. A recent report by the UCL Centre for Blockchain Technologies analysed 105 different projects across the US, EMEA and Asia using blockchain in some form in the supply chain (of which 15% are already in production).

Two of the key use cases that are being widely discussed in the retail sector - and the focus of this article - relate to product provenance and supply chain management. However, retailers are exploring other use cases, from revolutionising loyalty programmes and digitising product warranties to potentially allowing for the development of peer-to-peer marketplaces that could compete with the likes of eBay, Uber or Airbnb.

News & Events

Our Dutch "Retail & Consumer &" live webinar series launches on 19 May with a session on the new draft franchise legislation in the Netherlands

In this new series of events, our Retail & Consumer team will provide expert insights into relevant hot topics in the retail market. The events will focus on exploring new developments in legislation together and will also create new networking opportunities.

The Retail & Consumer & Franchise session on 19 May will focus on the new draft franchise legislation in the Netherlands. Bird & Bird laywers Roelien van Neck and Lisette den Butter will present on the Dutch Franchise Act that was submitted to the House of Representatives in the Netherlands on 10 February 2020, and explore the content of the Dutch Franchise Act bill and discuss what the relevant next steps are.

The event will be relevant for anyone involved in or planning to be involved in franchising in the Netherlands. It will be held in English.

Read more >

Our international Retail & Consumer team has earned a number of rankings in the Legal 500 EMEA 2020 guide, including in Food, Retail and Luxury Goods.