The Trading Bulletin: September 2024

Welcome to our Trading Law Bulletin, where we share the latest developments on data protection, financial services, health and safety, environmental issues, and marketing.

Data protection updates

ICO consults on allocating controllership across the generative AI supply chain

The consultation focuses on the allocation of roles and responsibilities in the generative AI supply chain (without addressing specific obligations in detail) and provides a non-exhaustive list of scenarios of processing activities. The ICO is seeking evidence on additional processing activities and actors not included in the consultation, alongside the relevant allocation of accountability roles. The ICO's consultation closes on 18 September.

The ICO's new tool for privacy notices

The ICO has launched a free new tool to help small businesses and sole traders create bespoke privacy notices and protect people’s information rights. Under UK data protection law, every organisation that holds people’s information must explain why and how it is used so that individuals understand what is happening with their data. The tool has sections specific to small organisations in a variety of economic sectors (with sections designed for small organisations in sectors such as retail and manufacturing).

For more information, you can find the article here.

Digital Information and Smart Data Bill

The Digital Information and Smart Data Bill (DISDB) is intended to enable new innovative uses of data to be safely developed, reform data sharing and standards, improve data laws, and ensure data is well protected by giving the ICO new and stronger powers. The DISDB will, amongst other things, establish digital verification services for certified providers, and set up smart data schemes for sharing customer data on request.

Review pages 39 – 41 of the 'King's Speech 2024: background briefing notes' for further information.

Cyber Security and Resilience Bill

The new Cyber Security and Resilience Bill (CSRB) is set to strengthen the UK’s cyber defences and critical infrastructure, ensuring that the digital services which companies rely on are secure. The CSRB will make crucial updates to the existing regime by expanding the remit of regulation to protect more digital services, supply chains and critical public services, empowering regulators of cyber security measures by introducing cost recovery mechanisms and additional powers, and mandating increased incident reporting to improve understanding of threats.

Pages 94 – 95 of the 'King's Speech 2024: background briefing notes' provide more background.

Financial Services Updates

Simplifying Retail Conduct Rules

The FCA has published a Call for Input to review its retail conduct rules and guidance following the introduction of the Consumer Duty. The deadline for comments is 31 October 2024 and aims to identify areas of complexity, duplication and over-prescription whilst improving flexibility. For example, among other things the FCA is seeking input on removing rules or guidance in the FCA Handbook that cover quite similar ground to Consumer Duty provisions. Please let us know if you intend to respond or would like to discuss this with us.

Digital Wallets

Digital wallet usage has grown rapidly in the UK; estimated to account for 14% of in-store and 38% of e-commerce transactions by value in 2023 (Apple Pay, Google Pay and PayPal being the most commonly used wallets). The FCA, working with the Payment Systems Regulator (PSR), is seeking to explore the risks and opportunities associated with digital wallets. Whilst wallets which tokenise existing bank cards generally fall out of the FCA's regulatory remit, wallets which hold customer funds as e-money are typically inside the FCA's perimeter.

The consultation document discusses in detail how digital wallets have been adopted across the retail sector and the FCA/PSR want to engage stakeholders across the payments and wider financial services landscape, including digital wallet and technology providers as well as their service users and other parties with an interest in digital wallets.

To read more about the FCA's Call for Information click here.

The Consumer Duty – one year on

It is now one year on from the introduction of the Consumer Duty and firms should have completed their first annual board report. The FCA held an event to mark the first anniversary of the duty. The event highlighted various examples of good and bad practice the FCA has observed and also set out the FCA's priorities.

The FCA highlighted that the Consumer Duty is an ongoing journey for improvement and the FCA will be continuing to implement initiatives to address harm or potential harm to retail customers, gain a greater understanding of how the duty is implemented and to share more information on best practice.

Health & Safety/Environmental Updates

Morrisons case confirms employers must take reasonably practicable steps to ensure the safety of each and every employee not just the majority

A recent ruling in the Court of Appeal has upheld Morrisons' £3.5 million fine for health and safety related breaches. The court held that an employer should be taking reasonably practical steps to mitigate against health and safety risks arising out of an employee's specific circumstances, even where no such risk would have arisen had it not been for such circumstances.

See our article which explores the possible impact of this decision on employers.

Product Safety

Retailers selling into Europe should be aware of the EU’s new General Product Safety Regulation which is set to land in December 2024. It modernises the EU general product safety framework and addresses the new challenges posed to product safety by the digitalisation of our economies. See more here.

It is also worth noting that the Kings Speech indicated the UK may follow suit in updating its product safety laws to either mirror or diverge from the updated EU rules as appropriate.

Indefinite extension to the use of CE marking for UK businesses

The Product Safety and Metrology etc. (Amendment) Regulations 2024, which will come into effect on 1 October 2024 will allow the use of CE markings to continue indefinitely for 18 groups of goods placed on the Great British market, a full list of which can be found here.

Please contact us if you are unsure whether your business can continue using CE markings.

Government publishes illustrative base fees for first year of extended producer responsibility for packaging (EPR)

The Department for Environment, Food and Rural Affairs (Defra) has published a document setting out illustrative base fees for the first year of Extended Producer Responsibility, which is 2025 to 2026. The document provides estimated fees for each of the eight categories of packaging materials (aluminium, fibre-based composites, paper or board, plastic, steel, wood, glass, and other). Final figures are likely to be published imminently.

Marketing Updates

Spring into action to avoid CMA enforcement action for harmful online selling practices: learnings from the CMA's new guidance

The CMA has recently produced new guidance on reference pricing. Whilst the guidance is targeted at the mattress sector, the CMA state they will have regard to these principles when considering enforcement action in relation to the use of reference pricing in other sectors.

See our article here.

Artificial integrity: scrutinising accurate AI claims

As artificial intelligence becomes more readily available and a bigger part of our everyday lives, the ASA has released advice for marketers using AI terminology to promote their products.

For further information, visit the ASA's website.

Investigation into Grocery Loyalty Prices

Back in November 2023, the CMA opened an investigation into supermarket loyalty schemes over concerns that the bulk of promotions were exclusive to members and that signing up to such schemes, required a smartphone and data sharing.

This analysis is ongoing, but the CMA have announced they are "unlikely to find widespread evidence" that supermarkets are unfairly and artificially inflating non-loyalty pricing to make member prices more appealing.

Find out more about the CMA's review.