1. COMPETITION - McCarthy Tétrault
1. COMPETITION - McCarthy Tétrault
1. COMPETITION - McCarthy Tétrault
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To return to the table of contents use Ctrl + Home or Ctrl + End. SEPT. – OCT. 2003<br />
NEWS .................................................................. 1<br />
<strong>1.</strong> <strong>COMPETITION</strong>.............................................................. 1<br />
FINLAND FICORA issues regulation on mobile phone No portability 1<br />
MEXICO Antitrust concerns: implementing sound regulation ............ 2<br />
TURKEY Dominance in the mobile telecoms market......................... 2<br />
2. COMPUTER CRIME...................................................... 3<br />
BRAZIL Law powers up piracy combat weapons............................... 3<br />
3. CONSUMER PROTECTION.......................................... 3<br />
AUSTRIA New rules on unsolicited commercial communication ....... 3<br />
UK Persistent misuse of electronic communications.......................... 4<br />
4. DIGITAL SIGNATURES ................................................ 4<br />
MEXICO New regulations on electronic signature ............................. 4<br />
5. DOMAIN NAMES .......................................................... 5<br />
FINLAND New act on Finnish domain names.................................... 5<br />
6. ELECTRONIC COMMERCE ......................................... 5<br />
CANADA Enforceability of webwrap agreements .............................. 5<br />
7. FINANCIAL SERVICES ................................................ 5<br />
LUX New law fostering IT outsourcing in the financial sector ............ 5<br />
8. INTELLECTUAL PROPERTY ....................................... 6<br />
BRAZIL Legal protection for software ................................................ 6<br />
EU Regulation on enforcement of intellectual property rights ............ 6<br />
INDIA India grants first exclusive marketing rights............................. 6<br />
INDIA New IP laws enter into force .................................................... 7<br />
INDIA Supreme Court clears telecast of Karishma ............................ 8<br />
9. MARKET ACCESS........................................................ 9<br />
BRAZIL Anatel announces creation of a new public service.............. 9<br />
CANADA Foreign ownership in the communications sector .............. 9<br />
10. MEDIA ........................................................................... 9<br />
INDIA MIB revises uplinking guidelines.............................................. 9<br />
1<strong>1.</strong> PRIVACY..................................................................... 10<br />
ARGENTINA Courts address the use of labor e-mail accounts....... 10<br />
ITALY New Code for privacy protection ........................................... 10<br />
12. TARIFFS...................................................................... 11<br />
UK Policy statement following review of two-part charging.............. 11<br />
13. TAX.............................................................................. 11<br />
BRAZIL ISS on IP-related services .................................................. 11<br />
INDIA Maintenance of PCs not subject to service tax...................... 11<br />
INDIA Server held to constitute permanent establishment .............. 12<br />
INDIA Service tax to BPO companies .............................................. 12<br />
INDIA Task force examines issue of taxing foreign clients .............. 13<br />
MEXICO Special telecom tax upheld ............................................... 13<br />
14. TELECOMMUNICATIONS .......................................... 13<br />
AUSTRIA New Telecommunications Act 2003 ................................ 13<br />
CHILE WI-FI technology is now a reality.......................................... 13<br />
HK Regulation of change of shareholdings of telecom companies.. 14<br />
HK Telecom service operators' access to private buildings ............. 14<br />
ITALY The Telecommunications Code............................................. 15<br />
MEXICO Strenghtening of COFETEL's authority............................. 15<br />
NEW ZEALAND Commerce commission recommends LLU............ 15<br />
UK Government decision released on use of GSM Gateways......... 15<br />
COMMENTARY .................................................16<br />
FRANCE Use of personal data for marketing purposes................... 16<br />
EDITOR / EDITORIAL BOARD .........................18<br />
TABLE OF CONTENTS BY COUNTRY ............19<br />
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NEWS<br />
<strong>1.</strong> <strong>COMPETITION</strong><br />
FINLAND<br />
FICORA ISSUES REGULATION<br />
ON MOBILE PHONE NO PORTABILITY<br />
On 28th May 2003, the Finnish Communications Regulatory Authority<br />
("FICORA") issued a regulation requiring mobile phone number portability.<br />
The regulation was issued in connection with Finland's new<br />
Communications Market Act, which, together with the regulation, came into<br />
force on 25th July 2003. Previously, only fixed network numbers and<br />
national premium service numbers were portable in Finland.<br />
Portability allows customers to change operators without having to change<br />
their mobile phone number. In Finland, FICORA grants mobile operators a<br />
3-digit operator prefix such as 040, 050, or 044. This prefix manifests to the<br />
calling party that the called number is a mobile number on a specific<br />
operator's network, and that the call charge will apply to that operator's<br />
charges. Where the operator-specific prefix is also included in the ported<br />
number, Finland's unique retail segment pricing could be in jeopardy. This<br />
is because the calling party will not know the operator's network to which<br />
the called number is connected, and thus what the call charge will be.<br />
Consequently, operators will be required to set up a toll-free service<br />
number from which callers can receive information identifying the network<br />
to which the called mobile phone number is connected.<br />
ISSUE 22 SEPTEMBER – OCTOBER 2003 1
The objective for implementing number portability is to facilitate the<br />
process for customers to switch from one operator to another. This, in turn,<br />
should enhance competition in the market. Under the newly implemented<br />
regulations, a mobile number is ported when a customer enters into a<br />
subscriber agreement with a new operator and receives a new SIM-card.<br />
The old subscriber connection remains operable until the new connection<br />
with the new operator is activated. Any additional services requested by<br />
the customer must be agreed to separately with the new operator, as the<br />
existing services will not transfer with the number. In practice, the<br />
subscriber is not charged for porting a number, since the law prohibits the<br />
former operator from charging the customer for the change. The former<br />
operator may, however, collect from the new operator a one-off payment<br />
equivalent to the costs of porting the phone number if the technical<br />
process of porting the number generates one-off costs. At the same time,<br />
the one-off payment cannot be so high as to deter the use of the service.<br />
While the new operator can pass on the costs of the port to the customer,<br />
in practice the new operator does not do so.<br />
According to the regulation, any delay in providing a connection to a new<br />
subscriber when the number is ported may not exceed five working days.<br />
The regulation further provides that the so-called "black-out" period<br />
between closing the old subscriber connection and opening a new<br />
connection may not exceed ten minutes. Customers' eagerness to change<br />
operators has caught most mobile phone operators by surprise, and has<br />
lead to severe delays in the time limits set for the change. FICORA has<br />
repeatedly emphasized the operators' duty to attend to their obligations<br />
and has issued a deadline for the operators to comply with the regulations.<br />
After the deadline of 6th October 2003, FICORA may consider imposing a<br />
conditional fine to those operators that still fail to meet the time limits.<br />
For more information visit:<br />
http://www.ficora.fi/englanti/tele/puhelinnumeron_siirrettavyys.htm<br />
or contact: craig.thompson@roschier.com<br />
MEXICO<br />
ANTITRUST CONCERNS:<br />
IMPLEMENTING SOUND REGULATION<br />
Many problems faced by the telecommunications sector today derive from<br />
the incumbent's abuse of power. Previously, we discussed the reasons<br />
why the Dominance Rules imposed on TELMEX a couple of years ago<br />
failed and were overturned. We have not discussed, however, what the<br />
qualifications of any regulatory agency in charge of governing antitrust<br />
matters in this sector should be, so that its resolutions can both withstand<br />
the test of judicial tribunals and afford legal certainty to all players in the<br />
Mexican market.<br />
Two agencies are involved in the process of determining the existence of<br />
substantial power in the relevant market and imposing specific obligations<br />
on the incumbent. On the one hand, the Mexican Federal Antitrust<br />
Commission (the "COFECO") is in charge of implementing the Mexican<br />
Federal Antitrust Law (the "LFCE") by determining the relevant markets<br />
and substantial power of the economic agent. Once COFECO makes such<br />
a determination, the Mexican Federal Telecommunications Commission<br />
(the "COFETEL") is in charge of imposing specific obligations against the<br />
incumbent.<br />
Deficiencies have arisen in the past precisely in the determination of the<br />
relevant market and substantial power. Under current regulations,<br />
COFECO has broad powers to interplay with different economic variables<br />
to determine what the relevant market is and what products, if any, may<br />
serve as adequate substitutes thereof. This discretionary power affects the<br />
"incumbent" insofar as it is unable to know beforehand the elements that<br />
will be considered by COFECO in its analysis, thus leaving it in a state of<br />
judicial uncertainty. A lack of clear and specific regulations as to the<br />
powers of the authorities, and of the standards for imposing penalties or<br />
other administrative sanctions, have been recurring deficiencies that were<br />
brought before Mexican courts to combat administrative resolutions and<br />
the constitutionality of the laws. If COFETEL will be in charge of imposing<br />
specific obligations, and if COFETEL is the agency that is most likely to<br />
have the necessary elements to make a thorough analysis in the<br />
determination of the relevant market and the substantial power, antitrust<br />
matters in the telecomm sector should be vested primarily in the hands of<br />
COFETEL, even if the administrative act through which the antitrust activity<br />
is condemned is made by COFECO. Naturally, this would require an<br />
amendment to the current antitrust and telecom regulation to include<br />
specific testing parameters and broaden COFETEL's powers participate in<br />
the analysis of the markets and the relevant market.<br />
The current draft of the new Federal Telecommunications Law aims to<br />
amend some of the deficiencies listed above by including specific criteria to<br />
determine the existence of a dominant player in the relevant market.<br />
However, COFETEL's actions are still limited to merely advisory activities<br />
to COFECO, which the latter may disregard with or without cause.<br />
For more information visit: www.cfc.gob.mx<br />
or contact: aam@bstl.com.mx<br />
TURKEY<br />
DOMINANCE IN THE MOBILE TELECOMS MARKET<br />
In a landmark decision, published in the Official Gazette on 22nd July<br />
2003, the Competition Authority (the "Authority") imposed a 7 trillion TL<br />
(approximately eur 4.5 million) fine on Turkcell, a major GSM services<br />
provider in Turkey. The Authority found that Turkcell was abusing its<br />
dominant position in the market to prevent the growth of other companies.<br />
The decision was rendered upon complaints made to the Authority by<br />
Basari Electronic ("Basari"), one of the former largest cell phone<br />
distributors, and Telsim, another GSM services provider that felt subject to<br />
Turkcell's domination from 1994 to 2000.<br />
The companies' complaints were based on Turkcell's dominance in the<br />
GSM services market. Basari claimed that Turkcell had applied dissimilar<br />
conditions to equivalent transactions. Turkcell placed Basari at a<br />
competitive disadvantage both by requesting a fee for the line and the sale<br />
of a SIMcard with a cellular phone, and by not paying the "sale support<br />
bonus" that they formerly paid to Basari. Turkcell had continued to pay this<br />
bonus to other distributor companies, which thus caused an increase on<br />
the prices of phones sold by Basari as compared to those of other<br />
companies. Telsim claimed that the major owner of Turkcell, Cukurova<br />
Holding, wrongly perceived the two separate GSM operating market and<br />
GSM devices market as one, which made it impossible for Telsim to enter<br />
into the market.<br />
The Authority provided a detailed analysis of how dominance in the<br />
relevant market should be determined. First, it pointed out that market<br />
share is a strong indication, but is not itself determinative, of dominance in<br />
the given market. On the other hand, evidence that market shares are<br />
consistently much higher than those of competitors' for a prolonged period<br />
strongly suggests dominance. Additionally, in a market where competitors<br />
are also trying to increase their subscribers' use of data and voice<br />
communication, the total values of such use should be considered to<br />
determine whether a company is in a dominant position. Accordingly, the<br />
fact that Turkcell had 8,037,000 subscribers, where, as of July 2000,<br />
ISSUE 22 SEPTEMBER – OCTOBER 2003 2
Telsim had 3,633,398 subscribers, demonstrates Turkcell's 6 years of<br />
constant leadership in the market, and indicates an overwhelming<br />
dominance of market share alone. Turkcell's dominance over Telsim is<br />
further established by the fact that an average Turkcell customer spoke for<br />
more than 125 minutes per month, where an average Telsim customer<br />
used only 45 minutes of speaking time.<br />
A company's dominance in a market also depends on the existence of<br />
barriers to market entry, such as a license that must be obtained from<br />
relevant authorities. This is the case for the GSM services market. Turkcell<br />
and Telsim were the first companies to obtain GSM licenses, followed by<br />
Aria and Ay-cell. However, obtaining a GSM license only secures the legal<br />
entry into the market, where achieving notable strength in the market<br />
requires substantial costs, such as infrastructure, marketing, sales and<br />
distribution expenses. Two of the most significant barriers to entry are<br />
"brand recognition" and "network externalities". Turkcell effectively<br />
maintains and increases its customer-base due a widespread use of its<br />
network, which naturally creates a difficulty for Telsim to maintain or<br />
increase its own market share.<br />
Another major barrier to entry was identified as the vertical integration of<br />
Turkcell that enables Turkcell to have an active role in the GSM devices<br />
market through exclusive relationships established between Turkcell and<br />
Turkcell Activation Centers and Turkcell Subscription Spots. Furthermore,<br />
3,700 newspaper kiosks are selling pre-paid lines through A-Tel, a<br />
subsidiary of Turkcell's major shareholder.<br />
In light of the foregoing, Turkcell was found to have a dominant position in<br />
the relevant market, since it has the power to apply its very own strategies<br />
to determine variables that affect the demand in the market (such as<br />
discounts and rebates) "independent of its customers and other<br />
competitors".<br />
As a result, with regard to the dealers working exclusively for Turkcell, the<br />
Authority decided that there was no noncompliance with the competition<br />
rules if these dealers are not working as cell phone distributor dealers at<br />
the same time. On the other hand, if these dealers work exclusively for<br />
Turkcell, it would be impossible for other operators to secure dealers, and<br />
hence, competition would be seriously restricted in the market.<br />
As per the Sim-Lock application, the Authority decided that Sim-Locks<br />
cannot be used unless the price of the device is partially paid for by the<br />
operator in return for a certain subscription period within the scope of a<br />
promotion. If the aforesaid condition is present and the device is sold with<br />
a Sim-Lock, the consumer should be notified that the device is being sold<br />
with a lock, and that the expiration date of the lock will be removed free of<br />
charge upon the consumer's request. Further, the consumer should be<br />
informed of certain advantages that will be maintained if the consumer<br />
decides to continue with his subscription. The consumer must also be<br />
notified that s/he is free to have the lock removed anytime s/he desires in<br />
return for a fee, which will be calculated depending on the remaining time<br />
for the promotion.<br />
For more information visit: http://www.rekabet.gov.tr/english.asp<br />
or contact: dpolat@hbo-law.com.tr<br />
2. COMPUTER CRIME<br />
BRAZIL<br />
LAW POWERS UP PIRACY COMBAT WEAPONS<br />
Brazilian Law No. 10695 (the "Law"), published on 2nd July 2003,<br />
amended the provisions of both the Penal Code and the Code of Criminal<br />
Procedure by broadening piracy prevention measures. The Law extends<br />
the minimum prison sentence for infringers of copyrights, who infringe with<br />
a view to obtain direct or indirect profits, to two years. It maintains the<br />
maximum prison sentence of four years.<br />
Under the Law, it is also a crime to market third-party copyrighted work<br />
without a license by means of cable, satellite, wave, or any other nonmechanical<br />
methods (the so-called "cyberpiracy"). Further, the Law now<br />
allows the police to seize counterfeit products, as well as the machinery<br />
and equipment used to manufacture them, without a search warrant.<br />
The Law establishes that reproduction of a work for personal and not-forprofit<br />
use is not considered a crime.<br />
For more information please contact: rapdecunto@pinheironeto.com.br<br />
3. CONSUMER PROTECTION<br />
AUSTRIA<br />
NEW RULES ON UNSOLICITED COMMERCIAL<br />
COMMUNICATION<br />
On 20th August 2003, the Austrian Telecommunications Act (the<br />
"Telekommunikationsgesetz 2003," or the "TKG 2003") implemented new<br />
rules on unsolicited commercial communication via electronic mail and<br />
SMS.<br />
Austria was one of the world's first countries to enact a general ban on<br />
such communication in 1999 by amending § 101 of the then-effective<br />
Telecommunications Act. Sending e-mail in bulk or for advertising<br />
purposes required prior consent from the recipient, and, once given, that<br />
consent was revocable at any time. In addition, the old Act granted<br />
protection against commercial e-mail under both competition law, as unfair<br />
competition, and civil law, as a violation of privacy or property.<br />
While drafting the new Telecommunications Act, the legislature gave in to<br />
concerns raised by the Chamber of Commerce that this rule could affect<br />
the development of electronic commerce in Austria, and it thus restricted<br />
the scope of the ban. Under § 107 para. 2 TKG 2003, sending e-mail and<br />
SMS in bulk (to more than 50 recipients) or for the purpose of direct<br />
marketing is impermissible without prior consent only if the recipient is a<br />
consumer. Moreover, § 107 para. 3 TKG 2003 provides that such prior<br />
consent is not required where the following conditions are met:<br />
• the sender received the contact details for such messages in the<br />
context of the sale of a product or service to his or her clients;<br />
• the message is for the direct marketing of his or her own similar<br />
products and services; and<br />
• the client is clearly and distinctly given the opportunity to object, free of<br />
charge, and in an easy manner to such use of their contact details<br />
when they are collected and on the occasion of each further sent<br />
message.<br />
ISSUE 22 SEPTEMBER – OCTOBER 2003 3
Sending such communication to recipients other than consumers is<br />
permissible without prior consent if the recipient is explicitly given the<br />
opportunity to object to receiving further messages (§ 107 para. 4 TKG<br />
2003). By its clear wording, the legislature emphasized that sending<br />
commercial communication to recipients other than consumers can no<br />
longer be considered unfair competition or a violation of privacy or<br />
property.<br />
In any event, sending commercial e-mail or SMS is impermissible if the<br />
identity of the sender, on whose behalf the communication is made, is<br />
disguised or concealed, or if no valid address is provided to which the<br />
recipient may send a request that such communication cease (§ 107 para.<br />
5 TKG 2003). According to § 109 para. 3 TKG 2003, a violation of these<br />
rules may warrant an imposable fine of up to $37,000.<br />
The question remains whether the distinction between consumers and<br />
non-consumers will assist the development of electronic commerce in<br />
Austria. However, it is evident that Austria failed to accurately implement<br />
Directive 2002/58/EC, which grants protection against the use of e-mail for<br />
the purpose of direct marketing without prior consent to each recipient that<br />
is a natural person (Art 13 para 1). The rights granted by Art 13 may not be<br />
restricted by the Member States according to Art 15 para 1 of the Directive.<br />
For more information please contact: thomas_fraiss@yahoo.de<br />
UK<br />
PERSISTENT MISUSE OF<br />
ELECTRONIC COMMUNICATIONS<br />
The Communications Act 2003 ("the Act") includes provisions aimed at<br />
empowering OFCOM to deal with behaviour which amounts to a 'persistent<br />
misuse' of an electronic communications system or network, but which falls<br />
short of constituting a criminal offence. The relevant powers of<br />
enforcement are provided to OFCOM in sections 128 & 131 of the Act.<br />
Under section 131, OFCOM is required to publish a statement outlining its<br />
general policy toward the exercise of its powers under the Act dealing with<br />
the persistent misuse of a relevant network or service. OFCOM published<br />
its policy statement in this regard on 28 August 2003.<br />
The Act defines "persistent misuse" as behaviour that has the effect, or<br />
likely effect, of causing someone to suffer annoyance, inconvenience or<br />
anxiety. The new rules are a consumer protection measure designed to<br />
protect consumers. OFTEL has stated that it considers that conduct will<br />
have the "likely effect" of causing annoyance, inconvenience or anxiety if<br />
such an effect is "probable", but not necessarily proven. In considering<br />
whether a person has "persistently" misused a network, OFTEL will look at<br />
the number, frequency and regularity of the alleged behaviour. It is not<br />
necessary that the conduct involve the same network or service on each<br />
occasion or that the same person be the target of the conduct in order for<br />
behaviour to be persistent.<br />
OFTEL has identified six general areas in which the persistent misuse of<br />
networks is most likely to occur: the misuse of automatic calling equipment<br />
to undertake short duration calls, recorded messages or fax messages<br />
without the consent of the recipient; silent or short duration calls (where the<br />
caller hangs up before the recipient has time to answer); number scanning<br />
to determine whether telephone numbers are in service or not; misuse of<br />
calling line identification (CLI) technology, such as the forwarding of<br />
misleading or inauthentic CLI information; dishonest or fraudulent activities<br />
such as directing consumers misleadingly to premium rate numbers; and<br />
misuse of allocated telephone numbers.<br />
For more information please contact: colin.long@olswang.com<br />
4. DIGITAL SIGNATURES<br />
MEXICO<br />
NEW REGULATIONS ON ELECTRONIC SIGNATURE<br />
On 29th August 2003, the Federal Official Gazette ("Diario Oficial de la<br />
Federación") published several amendments to the Federal Commercial<br />
Code (the "Code") on electronic commerce to regulate electronic<br />
signatures. The amendments aim to give more sustenance to prior<br />
amendments of May 2000, where several provisions on Data Messages,<br />
their implications in contract formation, and their validity as courtroom<br />
evidence were incorporated into the Code, the Federal Civil Code, and the<br />
Federal Law on Consumer Protection. Critics of the May 2000<br />
amendments claim they did not adopt all provisions of the UNCITRAL<br />
model law on Electronic Commerce. The amendments of 29th August 2003<br />
should remedy this deficiency by establishing rules that consider the<br />
delivery and receipt of data messages and the preservation of said<br />
messages.<br />
The main principles adhered to in the new amendments are: technological<br />
neutrality, contractual freedom of the parties, international compatibility,<br />
and functional equivalence of data messages, with respect to the<br />
information contained therein and the electronic signature vis à vis the<br />
handwritten signature. While the May 2000 amendments had simply<br />
mentioned the notion of an electronic or digital signature, the new<br />
amendments elaborate on this idea by adopting the provisions of the<br />
UNICTRAL Model law on Electronic Signatures. The new amendments<br />
thus give regard to public key infrastructure models and seek to grant the<br />
same validity to electronic signatures as that afforded to handwritten<br />
signatures. Under the amendments to the Code, the electronic signature<br />
will be deemed reliable if:<br />
• the data related to the creation of the signature is exclusive of the<br />
signatory;<br />
• the data related to the creation of the signature is under the exclusive<br />
control of the signatory;<br />
• it is possible to detect any alteration on the electronic signature after<br />
its signature; and<br />
• as to the integrity of data messages, it is possible to detect any<br />
alterations thereto after signature.<br />
As was the case with the UNCITRAL Model law on Electronic Signatures,<br />
the amendments imposed a series of obligations on:<br />
• the issuer of the message;<br />
• the providers of certification services (a concept that is also adopted in<br />
this amendment); and<br />
• the recipient of the message.<br />
Among said obligations, the signatory is bound to act diligently to establish<br />
reasonable means to avoid the non-authorized use of the data related to<br />
the creation of the signature, while the recipient is bound to verify the<br />
reliability of the electronic signature or of the validity of the certificate<br />
issued to support the corresponding signature.<br />
Notary publics and private entities will be able to apply to become<br />
certification service providers before the Ministry of Economy under certain<br />
rules to be enacted by the Ministry within 90 days from the publication of<br />
the amendments. The amendments will become enforceable on that date.<br />
Among other responsibilities, certification service providers must verify the<br />
identity of any applicant and any other relevant circumstances for the<br />
ISSUE 22 SEPTEMBER – OCTOBER 2003 4
issuance of a certificate; provide to the signatory the necessary means to<br />
create and verify an electronic signature; maintain a registry of all<br />
certificates issued by it; and establish a system that will ensure the integrity<br />
of the certificates. In an effort to foster the use of electronic signatures with<br />
other countries, the Code recognizes and gives validity to certificates or<br />
electronic signatures issued in other countries, as long as such certificate<br />
or electronic signature has an equivalent degree of reliability to the<br />
certificates and electronic signatures issued in Mexico.<br />
For more information visit: www.camaradediputados.gob.mx<br />
or contact: aam@bstl.com.mx<br />
5. DOMAIN NAMES<br />
FINLAND<br />
NEW ACT ON FINNISH DOMAIN NAMES<br />
Finland's new Act on Domain Names ("Act")entered into force on 1<br />
September 2003. On the day the new act entered into effect, the Finnish<br />
Communications Regulatory Authority (FICORA) received over 18,000<br />
domain name applications for ".fi" top level domain names. By September<br />
18th, FICORA had received more than 26,000 applications. Before the<br />
new act, only some 42,000 Internet names had been registered in Finland.<br />
Under the new Act applicants have greater freedom of choice in choosing<br />
domain names because, previously, Internet names had to correspond to<br />
the name of their business, organization or to trademarks and registration<br />
of common names or acronyms was forbidden. Certain restrictions still<br />
apply under the new Act. For instance, an Internet name cannot be<br />
indecent. It is also forbidden to register domain names that violate<br />
someone else's protected mark or name. Applicants for an Internet name<br />
are responsible for the legality of names they apply for. Furthermore<br />
registration of personal names remains prohibited and private individuals<br />
still may not register Finnish domain names unless they are private<br />
entrepreneurs. Foreign companies may apply for domain names if they<br />
have a branch entered in the Finnish Trade Register.<br />
Internet names may not be registered for the purpose of resale. One case<br />
has already been instituted by FICORA against a potential domain name<br />
squatter. Under the new Act FICORA can deregister unlawfully registered<br />
Internet names.<br />
For more information visit: http://www.ficora.fi/englanti/index.html<br />
or contact: craig.thompson@roschier.com<br />
6. ELECTRONIC COMMERCE<br />
CANADA<br />
ENFORCEABILITY OF WEBWRAP AGREEMENTS<br />
In "Canadian Real Estate Association (the "CREA") v. Sutton (Québec)<br />
Real Estate Services Inc.", Montreal, 500-05-074815-026, 10th April 2003,<br />
the Quebec Superior Court granted an interlocutory injunction against<br />
Sutton, ordering Sutton to cease downloading listings from the www.mls.ca<br />
website for the purpose of reposting the information on its own website.<br />
The Court found that Sutton's actions violated the "terms of use"<br />
agreement as posted on the mls.ca website. Such terms were subject to a<br />
webwrap approach to online contract formation rather than a clickwrap<br />
approach. While Sutton argued that it was not bound by CREA's terms of<br />
use because it had not clicked on an "I Agree" button, or had not otherwise<br />
manifested its consent, the Court held that CREA had an apparent right in<br />
the integrity of its website, and it granted the interlocutory injunction.<br />
This ruling's significance involves its place among other rare Canadian<br />
decisions that address the enforceability of webwrap terms of use<br />
agreements. The Court granted an interlocutory injunction here even<br />
though it held that the enforceability of the website terms of use should be<br />
determined on final judgment. The Court appears to have been influenced<br />
by the fact that Sutton "knew what it was doing". Further, despite there<br />
having been no clickwrap, the Court found evidence that Sutton knew that<br />
it was subject to CREA's terms of use by the fact that Sutton had posted its<br />
own "terms of use" agreement using a webwrap approach on its own<br />
website. The Court agreed that CREA had made a sufficient case of<br />
owning proprietary rights in its website listings, irrespective of the fact that<br />
such listings were posted by various third parties, including Sutton.<br />
The decision is also a relatively rare Canadian instance of judicial<br />
consideration and treatment of Internet technology, where the Court<br />
discusses Sutton's technological attempts ("stealthing") to sidestep CREA's<br />
technological attempts to block Sutton's ability to download and repost the<br />
MLS listings on its own website.<br />
For more information visit:<br />
http://www.canlii.org/qc/jug/qccs/2003/2003qccs11838.html<br />
or contact: cmorgan@mtl.mccarthy.ca<br />
7. FINANCIAL SERVICES<br />
LUX<br />
NEW LAW FOSTERING IT OUTSOURCING<br />
IN THE FINANCIAL SECTOR<br />
Outsourcing, or the use of third party provider, is a business strategy that is<br />
being considered more and more by financial institutions as they face<br />
increasing competition. Indeed, financial institutions view outsourcing as a<br />
valuable tool that enables them to focus on their core competencies while<br />
reducing their operating costs.<br />
Against this background, the Luxembourg Government has decided to<br />
foster the development of outsourcing services in the finical sector and, to<br />
this end, the Parliament adopted on 2nd August 2003 the Act No 5085 (the<br />
"New Law") amending the law of 5th April 1993 on the financial sector. The<br />
New Law entered into force on 1st October 2003.<br />
The main purpose of the New Law is to create new categories of<br />
professionals of the financial sector (the "PFS") subject to strict<br />
requirements (including, for example, professional secrecy) and to the<br />
permanent supervision of the financial sector regulatory authority, the<br />
"Commission de Surveillance du Secteur Financier".<br />
One such new category of PFS covers "IT systems and communication<br />
networks operators of the financial sector" (the "EDP Operator").<br />
Thus, EDP Operators are defined by the New Law as professionals<br />
responsible for the functioning of computer systems and communication<br />
networks of financial institutions, PFS, undertakings for collective<br />
investment (the "UCI") or pension funds.<br />
The scope of services which may be offered by EDP Operators includes<br />
data processing or data transfer as well as computer systems<br />
implementation and maintenance. However, pursuant to the New Law,<br />
ISSUE 22 SEPTEMBER – OCTOBER 2003 5
EDP Operators may only provide such services to financial institutions,<br />
PFS , UCIs or pension funds set up under Luxembourg or foreign laws.<br />
Pursuant to the New Law, EDP Operators will have, amongst other<br />
obligations, to obtain a license from the Ministry of Finance and to justify a<br />
share capital of at least one million and five hundred thousand euro.<br />
For more information visit:<br />
http://www.etat.lu/legilux/DOCUMENTS_PDF/MEMORIAL/memorial/a/200<br />
3/a1121408.pdf<br />
or contact: LE_GOUEFF@vocats.com<br />
8. INTELLECTUAL PROPERTY<br />
BRAZIL<br />
LEGAL PROTECTION FOR SOFTWARE<br />
On 30th June 2003, a decision of the 3rd Panel of Superior Court in<br />
Special Appeal No. 443.119/RJ extended to software the same protection<br />
that the law previously afforded to other intellectual works. The notable<br />
case marks the first time that the highest court recognized the<br />
copyrightable nature of software, which had already been expressly<br />
granted under Law 9609/98 (the "Software Law"). This decision is also<br />
notable for the penalty assessed - the infringer was penalized with<br />
damages in an amount equal to 3,000 copies of the counterfeit product.<br />
The Copyright Law provides for this amount of damages whenever<br />
identifying the number of counterfeit copies would be impossible task.<br />
For more information please contact: rapdecunto@pinheironeto.com.br<br />
EU<br />
REGULATION ON ENFORCEMENT OF<br />
INTELLECTUAL PROPERTY RIGHTS<br />
On 30th January 2003, the Council of the European Union proposed a<br />
regulation on the enforcement of intellectual property rights.<br />
The proposed directive (the "Directive") concerns customs action against<br />
goods that are suspected of infringing intellectual property rights. The vote<br />
on this Directive has been delayed to November because of the European<br />
Institution. The European Parliament member responsible for guiding the<br />
proposal has not yet produced the report on the draft legislation.<br />
Criticism of the proposal is significant, which is being compared to a<br />
controversial U.S. law. On the one hand, the Directive has drawn<br />
dismayed reaction from copyright holder lobbyists, in particular from the<br />
International Federation of the Phonographic Industry (the "IFPI").<br />
Copyright holders seek alternative measures by which to develop the<br />
regulation. They argue that more than 1 billion pirated music CDs have<br />
been sold; thus, where one in every three CDs is illegal, the IFPI has lost<br />
$4.6 billion due to piracy. Conversely, such large earning potential has<br />
garnered support for the Directive from certain large high-tech companies,<br />
such as Microsoft.<br />
On the other hand, civil liberties groups criticize the Directive on the<br />
ground that it poses a threat to civil liberties, innovation and competition<br />
policy.<br />
According to critics, large multinationals stand to reap the greatest benefit<br />
from such enforcement of intellectual property rights. Indeed, the Directive<br />
bans reverse engineering practice. Moreover, an analysis of the Directive's<br />
implementation predicts that the law would both damage European<br />
scientific research and limit consumers' rights.<br />
Finally, although the Directive permits modification of the patentability of<br />
computer-implemented inventions, according to computer scientists and<br />
developers, it would increase the grip of multinational companies on the<br />
software industry.<br />
For more information please contact: LE_GOUEFF@vocats.com<br />
INDIA<br />
INDIA GRANTS FIRST EXCLUSIVE<br />
MARKETING RIGHTS<br />
On 5th September 2003, India's Controller General of Patents, Designs<br />
and Trade Marks granted the first ever exclusive marketing right (the<br />
"EMR") in India to United Phosphorous for sale of its fungicide, which is<br />
sold under the brand "SAAF." The few applications, which were filed earlier<br />
by various companies, were not approved by the Controller on various<br />
grounds.<br />
EMR entitles the EMR holder to have the exclusive right by himself, his<br />
agents, or licensees to sell or distribute in India the article or the substance<br />
on and from the date of approval granted by the Controller for a period of<br />
five years or until the date of grant or rejection of patent application,<br />
whichever is earlier.<br />
The provisions for the grant of EMR were introduced in the Patents Act,<br />
1970 by the Patents (Amendment) Act, 1999, to bring the Patents Act,<br />
1970 in compliance with Agreement on Trade Related Aspects of<br />
Intellectual Property Rights (the "TRIPS"). TRIPS required insertion of<br />
EMR provisions with effect from 1st January 1995 pending introduction of<br />
the product patent regime in the developing countries. The product patent<br />
regime is scheduled to come into effect on 1st January 2005.<br />
EMRs can be granted with respect to substances intended for use or<br />
capable for being used as medicine or drug. However, no EMR can be<br />
granted with respect to chemical substances that are ordinarily used as<br />
intermediates in the preparation or manufacture of any of the medicines or<br />
substances.<br />
Under the amendment of 1999, Patent Offices are required to accept the<br />
product patent applications and keep them in what is known as the "Black<br />
Box" until 1st January 2005, when such applications will be examined for<br />
the grant of patent. In the meantime, the applicant can apply to obtain an<br />
EMR, which is granted if the following requirements are satisfied:<br />
For inventions made in India or outside of India if:<br />
• before filing an Indian application, applicant has filed an application for<br />
the same invention in a convention country on or after 1st January<br />
1995;<br />
• the approval to sell or distribute the article or substance in the basis of<br />
appropriate test conducted on or after 1st January 1995 is granted in<br />
such convention country; and<br />
• applicant has received the approval to sell or distribute the article from<br />
the authority specified in this behalf by the Central Government.<br />
For inventions made in India:<br />
• before filing an Indian application, applicant has filed an application on<br />
or after 1st January 1995 for method or process of manufacture for<br />
that invention relating to identical article or substance and has been<br />
granted the patent on such application; and<br />
• applicant has received the approval to sell or distribute the article from<br />
the authority specified in this behalf by the Central Government.<br />
ISSUE 22 SEPTEMBER – OCTOBER 2003 6
United Phosphorous had already received a process patent for SAAF in<br />
2001 while the product was introduced in the market and had been gaining<br />
market share. This first approval of an EMR, paves the way for more<br />
favorable EMR decisions till the start of 2005 when the "black box" will be<br />
opened and pharmaceutical patents will gain momentum.<br />
Delhi makes Trade Mark search mandatory before granting manufacturing<br />
license.<br />
In a move to curb the spread and sale of counterfeit drugs, the Drugs<br />
Control Department of the National Territory of Delhi has made search<br />
reports from the Registrar of Trade Marks mandatory before approving any<br />
drug-manufacturing license under a particular brand name.<br />
This initiative by the Delhi Drugs Authority was made pursuant to<br />
observations in the Supreme Court decision of Cadila Health Care Ltd. v.<br />
Cadila Pharmaceuticals Ltd. (decided 26th March 2001). In paragraph 41<br />
of the said judgment, the Supreme Court observed as follows:<br />
"Keeping in view the provisions of Section 17-B of the Drugs and<br />
Cosmetics Act, 1940 which inter alia indicates an imitation or resemblance<br />
of another drug in a manner likely to deceive being regarded as a spurious<br />
drug it is but proper that before granting permission to manufacture a drug<br />
under a brand name the authority under that Act is satisfied that there will<br />
be no confusion or deception in the market. The authorities should<br />
consider requiring such an applicant to submit an official search report<br />
from the Trade Mark office pertaining to the trade mark in question which<br />
will enable the drug authority to arrive at a correct conclusion."<br />
This provision of requiring search reports of trade marks if adopted in the<br />
other States in India will eliminate the chances of approval of a deceptively<br />
similar and look-alike brand of drugs. The Government of India has<br />
appointed Mashelkar Committee to study the various aspects of the<br />
growing threat from spurious drugs and give its report thereon. The<br />
committee has submitted its interim report. The drug regulatory officials<br />
have echoed their feelings and hope to get a positive response from the<br />
report in this regard.<br />
For more information please contact: vaibhav@nishithdesai.com<br />
INDIA<br />
NEW IP LAWS ENTER INTO FORCE<br />
On 15th September 2003, the Indian government effectuated the Trade<br />
Marks Act, 1999 (the "TM Act") and the Geographical Indications of Goods<br />
(Registration and Protection) Act, 1999 (the "GI Act"). India's induction of<br />
these laws fully complies with the Agreement on Trade Related Aspects of<br />
Intellectual Property Rights (the "TRIPS"). While the TM Act replaces<br />
earlier legislation - namely, the Trade and Merchandise Marks Act, 1958 -<br />
the GI Act is a new law that grants statutory protection to the Geographical<br />
Indications of Goods.<br />
Also on 15th September 2003, the government established the Intellectual<br />
Property Appellate Board in Chennai with benches at Ahmedabad, Delhi,<br />
Mumbai, and Kolkata. Now the Appellate Board will hear appeals from the<br />
decisions of the Registrar of Trade Marks and Geographical Indications.<br />
Trade Marks appeals that are currently pending before various High Courts<br />
stand to be transferred to the Appellate Board.<br />
TM ACT<br />
Among other salient features, the TM Act expands the definition of the<br />
term "Trade Mark" to cover the shape of goods, their packaging, and their<br />
combination of colors. It also introduces the registration of both Service<br />
Marks and Collective Marks, granting statutory protection to such marks.<br />
Service Marks were not registrable under the 1958 legislation. Therefore,<br />
prior protection available for Service Marks was through an action of<br />
"passing off." Entries 35 to 42 in the Fourth Schedule of the Trademark<br />
Rules, 2002, list the classes of services. The classification complies with<br />
the Nice Classification of Goods and Services. Collective Marks will be<br />
owned by associations, including those representing accountants,<br />
engineers, or architects. The members of such associations will be allowed<br />
to use the Collective Mark to identify themselves with a level of quality and<br />
other requirements as set by the association.<br />
Additionally, the TM Act:<br />
• permits the filing of multi-class applications.<br />
• increases the term of registration and renewal from seven to ten years.<br />
• recognizes the concept of "well-known Trade Mark," thus prohibits the<br />
registration of a mark that is merely a reproduction or imitation of a<br />
well-known mark, even with respect to different goods or services.<br />
• recognizes offenses relating to falsification of Trade Marks and<br />
application of false trade descriptions - i.e., police may take<br />
cognizance of the complaint without obtaining order from the<br />
magistrate. Police are empowered to search and seize goods or other<br />
instruments involved in committing an offense. However, it will be<br />
mandatory for police to obtain the opinion of the Registrar as to facts<br />
involved in the offense relating to the Trade Mark. This requirement is<br />
likely to delay the search and seizure procedure.<br />
• widens the scope of the definition of the term "infringement." For<br />
instance, use of a registered Trade Mark as a part of a corporate name<br />
or use of a mark in comparative advertising if such advertisement is<br />
contrary to honest practices or is detrimental to its distinctive<br />
character, amounts to infringement.<br />
• obliterates the "disclaimer" provision.<br />
• increases, considerably, the application fees in the Trademarks Rules,<br />
2002. For example, the registration fee has been increased from Rs.<br />
300/- to Rs. 2500/-.<br />
GI ACT<br />
The GI Act was passed with the objective of providing protection to a<br />
Geographical Indication, including any agricultural, natural, or<br />
manufactured goods, or any goods of handicraft or industry, including<br />
foodstuff. Geographical Indications identify a good as originating in a place<br />
where a given quality, reputation, or other characteristic of the good is<br />
essentially attributable to its geographical origin. Among well known<br />
examples of Geographical Indications are "Champagne," "Bordeaux," and<br />
"Chianti." Each region is famous for its wine - the first two are regions in<br />
France and the third is a region in Italy. Examples in the Indian context are<br />
"Banarasi Saris," "Kolhapuri Chappals," "Lakhnowi Kurta," and "Darjeeling<br />
Tea."<br />
A Trade Mark that consists exclusively of marks or indications that serve to<br />
designate the geographical origin of goods or services cannot be<br />
registered under the TM Act. The purpose of a Trade Mark is to denote the<br />
origin of the goods from a particular trader. In the case of a geographical<br />
name, the name would lead the consumer to believe that the goods<br />
originate from that place and thus cause confusion and even deception.<br />
To be recognized as a Geographical Indication, a product must satisfy both<br />
the territorial aspect and that a given quality, reputation, or other<br />
characteristic should be essentially attributable to its geographical origin.<br />
All goods have been categorized in different classes in accordance with the<br />
International Classification of goods for the purposes of registration of<br />
Geographical Indications.<br />
ISSUE 22 SEPTEMBER – OCTOBER 2003 7
The GI Act provides for registration of a Geographical Indication and the<br />
authorized user thereof who is able to bring an action based on the<br />
registration.<br />
Registration of a Geographical Indication entitles the registered proprietor<br />
and authorized users to the exclusive right to the use of the Geographical<br />
Indication in relation to the goods in respect of which Geographical<br />
Indication is registered, the right to obtain relief in respect of the<br />
infringement of the Geographical Indication. Two or more authorized users<br />
of a registered Geographical Indication have co-equal rights.<br />
The registration of Geographical Indication is valid for a period of ten<br />
years, and may be renewed thereafter for further periods of ten years. The<br />
registration of an authorized user is valid for the earlier of ten years or on<br />
the date when registration of Geographical Indication, with respect to<br />
which the authorized user is registered, expires.<br />
The GI Act prohibits assignment, transmission, licensing, pledge,<br />
mortgage, or any such other agreement with respect to a Geographical<br />
Indication. The Act also provides for infringement and passing off actions,<br />
thus recognizing the common law right in a Geographical Indication, and<br />
includes civil as well as criminal remedies. Infringement has been defined<br />
to include unfair competition. Available remedies in a civil suit include an<br />
injunction, discovery of documents, damages or accounts of profits,<br />
delivering-up of the infringing labels, and indications for destruction or<br />
erasure.<br />
For more information please contact: vaibhav@nishithdesai.com<br />
INDIA<br />
SUPREME COURT CLEARS<br />
TELECAST OF KARISHMA<br />
Originally scheduled to be launched on 12th May 2003, Rupees One<br />
Billion, mega-serial Karishma: The Miracle of Destiny (the "Karishma") was<br />
telecast on Sahara Manoranjan after a 105-day delay on 25th August<br />
2003.<br />
Sahara Media Entertainment Ltd.'s (the "Sahara") 12th May launch of<br />
Karishma was brought to an unexpected halt just four days before its<br />
telecast. On 7th May 2003 - in a suit in which best selling romance novelist<br />
Barbara Taylor Bradford alleged copyright infringement of her book "A<br />
Woman of Substance" (© 1979) - the Single Judge Bench of the Calcutta<br />
High Court issued an ex-parte injunction order prohibiting the telecast of<br />
Karishma. The allegation of copyright infringement was based on an<br />
alleged statement by the film's producer, made during an interview, that<br />
Karishma was inspired by "A Woman of Substance."<br />
On Monday, 12th May 2003, flurries of appeals were brought. The Single<br />
Judge Bench refused Sahara's application for vacating the injunction. On<br />
the same day, on appeal by Sahara, the Division Bench of the High Court<br />
allowed the telecast of Karishma. Later that day, on Bradford's appeal, the<br />
Vacation Bench of the Supreme Court stayed the airing of Karishma by an<br />
ex-parte order. In the next hearing, the Supreme Court stayed the<br />
proceedings that had been brought before the High Court and restrained<br />
airing of Karishma until a decision was made as to Bradford's Petition. On<br />
19th May 2003, the Supreme Court remanded the matter to the Single<br />
Judge Bench of the High Court.<br />
Thereafter, in the High Court, Sahara contended that Karishma was based<br />
on a work entitled "parajita," by Sachin Bhaumick. Furthermore, he said<br />
that, apart from the rags-to-riches theme, there was no similarity between<br />
Karishma and Bradford's novel, and that only substantial similarity of<br />
thought, sequence, and expression could be termed as infringement and<br />
not mere similarity in idea, concept, or central theme.<br />
On 30th June 2003, the Single Judge Bench vacated the injunction granted<br />
on 7th May 2003, with a direction to begin the telecast on 7th July 2003.<br />
Bradford promptly challenged this order before the Division Bench, which<br />
ruled to extend the injunction until further hearings could take place, and<br />
directed Bradford to submit a copy of her book.<br />
Sahara submitted to the Division Bench that one of its business rivals was<br />
instrumental in filing suit against Karishma. Producer Akashdeep Sabir's<br />
counsel contested that during an interview his client had stated that the plot<br />
of Karishma had been copied from Bradford's book.<br />
On 21st July 2003, after considering the evidence, the Division Bench<br />
permitted the telecast of Karishma: A Miracle Of Destiny, dismissed<br />
Bradford's appeal, and refused to grant a stay of operation on its order as<br />
prayed for by Bradford. The Division Bench observed that the interview<br />
conducted by Pammi Somal shows, by its internal evidence, that<br />
Akashdeep Sabir, had not read the book by Bradford. Rather, in the<br />
interview Sabir had admitted to borrowing only the plot and some<br />
characters. Therefore, the Division Bench observed, "Copyright<br />
infringement cannot be established on this alone. No prima facie case has<br />
been made. Infringement can be established only by comparing and<br />
showing similarity of details, events, situations, expressions of language,<br />
and imagination. Learned leading Counsel of both sides had not even read<br />
the book. How can infringement be established when even the book had<br />
not been read" (RG Anand v/s Deluxe Films, decided by the Supreme<br />
Court was relied upon). The Division Bench also observed the balance of<br />
convenience and considered Sahara's contention that they had spent over<br />
Rupees One Billion and taken Rupees One Hundred and Ten Million from<br />
advertisers. The Division Bench observed "plaintiffs will hardly suffer any<br />
loss of value of their book; if an injunction is obtained after 15/20 episodes<br />
(assuming there is going to be an infringement), the plaintiffs will get<br />
practically their full relief, and the respondents will be in almost equal<br />
problems as not starting at all. The balance of convenience heavily favors<br />
the respondents." The Division Bench further observed that Bradford's<br />
interlocutory application was premature. Bradford was ordered to pay<br />
heavy costs to Sahara.<br />
If after watching Karishma, Bradford can in fact establish infringement, it<br />
appears from the order of Division Bench that she is free to move the High<br />
Court once again to pray for an injunction. The Division Bench observed<br />
that "If 15-20 episodes are shown, then details of similarity can be<br />
established; the plaintiffs might, "have a prima facie case then; they have<br />
none now."<br />
On 21st July 2003, Bradford moved the Supreme Court challenging the<br />
High Court order. On 4th August 2003, the Supreme Court dismissed<br />
Bradford's Petition, but set aside the order imposing heavy costs and<br />
damages on her.<br />
Perhaps the tortuous destiny of Karishma might have been curtailed if the<br />
two stories had been read sooner to determine whether there was in fact a<br />
copyright infringement.<br />
In suits based on copyright infringement, rival works should be examined at<br />
the earliest possible opportunity to ascertain whether a prima facie case for<br />
infringement is established. Since copyright exists in the expression of an<br />
idea and not in the idea itself, close comparison of "expression" is<br />
necessary to ascertain whether at least a prima facie case is made out.<br />
Balance of convenience and comparative hardship are also factors to be<br />
taken into consideration while granting or refusing interim injunction.<br />
In India, where civil litigation can take approximately 10 to 12 years to be<br />
final, the fate of parties in intellectual property infringement matters is<br />
ISSUE 22 SEPTEMBER – OCTOBER 2003 8
decided at the interim stage itself, since after time passes intellectual<br />
property often loses its value. Therefore, a practice has developed in<br />
intellectual property infringement matters where detailed evidence on<br />
affidavits is led at the interim stage and interim injunction matters are<br />
heard at length, sometimes for weeks, where the merits of the matter are<br />
argued in detail with the support of case law.<br />
It may or may not come to light whether the Karishma saga was<br />
orchestrated by a rival channel, as Sahara claimed, or whether it was just<br />
the unhappy result of a misdirected but genuine attempt to bring to book<br />
pirate Bollywood script writers, but the travails of "Karishma: The Miracle of<br />
Destiny" have clearly provided a considerable amount of publicity to the<br />
work itself.<br />
For more information please contact: vaibhav@nishithdesai.com<br />
9. MARKET ACCESS<br />
BRAZIL<br />
ANATEL ANNOUNCES CREATION<br />
OF A NEW PUBLIC SERVICE<br />
On 21st August 2003, ANATEL announced the creation of a new public<br />
service of electronic data communication, which will last until the end of<br />
2004. ANATEL's objective is to introduce public access to the Internet. Any<br />
company that is interested in rendering such service may participate on the<br />
bid.<br />
For more information please contact: rapdecunto@pinheironeto.com.br<br />
CANADA<br />
FOREIGN OWNERSHIP IN THE COMMUNICATIONS<br />
SECTOR<br />
Recently, two House of Commons Standing Committees predicted<br />
radically different futures for foreign ownership restrictions of<br />
telecommunication and broadcasting sector companies.<br />
In an April 2003 report, entitled "Opening Canadian Communications to the<br />
World", the Standing Committee on Industry, Science and Technology<br />
noted that foreign ownership restrictions had impeded raising capital in the<br />
past decade, and that these restrictions fell hardest on newer telecom<br />
companies. The Industry Committee recommended that the Canadian<br />
government remove the minimum ownership requirements, including the<br />
requirement of Canadian control applicable to telecommunications<br />
common carriers. The Industry Committee further recommended that a<br />
special parliamentary committee undertake a comprehensive review of the<br />
governance structure of both telecommunications and broadcasting<br />
sectors in Canada. The review should, at minimum, examine both the<br />
regulatory framework governing the telecommunications and broadcasting<br />
sectors, and the approaches that the federal government could adopt to<br />
continue to facilitate broadband deployment in rural and remote<br />
communities. Lastly, the committee should also examine the federal<br />
department organization of these industries, and review the jurisdiction,<br />
role, and mandate of the Canadian Radio-television and<br />
Telecommunications Commission (the "CRTC").<br />
By contrast, in a June 2003 study of the Canadian broadcasting industry<br />
entitled "Our Cultural Sovereignty: the Second Century of Canadian<br />
Broadcasting," the Standing Committee on Canadian Heritage<br />
recommended that existing foreign ownership limits for broadcasting and<br />
telecommunications be maintained. The Heritage Committee held the view<br />
that broadcasting is an essential preserve of Canadian culture and<br />
imagination, and that, should Canadians give up control of their cultural<br />
sovereignty, they may never get it back. The Heritage Committee proposed<br />
fundamental reforms to the structure and composition of the CRTC. It<br />
called on the government to consider that a single Communications Act be<br />
administered by a single department of communications. The new<br />
Communications Act would replace the Telecommunications Act, the<br />
Broadcasting Act, and the Canadian Radio-television and<br />
Telecommunications Act. The Committee further recommended revamping<br />
the current support programs for Canadian broadcasting; creating a new<br />
institution - a broadcasting monitor - that would report to Parliament on the<br />
health of the broadcasting system; and launching a local initiative fund to<br />
promote community and local broadcasting. The Heritage Committee also<br />
showed strong concerns with respect to cross-media ownership.<br />
For more information visit: www.parl.gc.ca/infoCom/CommitteeReport.asp<br />
or please contact: cmorgan@mtl.mccarthy.ca<br />
10. MEDIA<br />
INDIA<br />
MIB REVISES UPLINKING GUIDELINES<br />
On 26th March 2003, the Indian Government, in its Guidelines for Uplinking<br />
of News and Current Affairs TV Channels from India (the "Guidelines"),<br />
imposed a 26% cap on the foreign direct investment (the "FDI") in<br />
television news companies desirous of uplinking from India. This was on<br />
par with the FDI cap prevalent in the print medium relating to newspapers<br />
and periodicals dealing in news and current affairs.<br />
The Government has now revised the Guidelines issued on 26th March<br />
2003 by amending the eligibility criteria for uplinking. As per the revised<br />
Guidelines, the applicant company desirous of uplinking news and current<br />
affairs channel(s) from India is considered eligible, if it fulfils the following<br />
criteria:<br />
OWNERSHIP<br />
FDI should not exceed 26% of the Paid-up Equity of the applicant<br />
company. While calculating the 26% FDI, the foreign holding component, if<br />
any, in the equity of the Indian shareholder companies of the applicant<br />
company will be duly reckoned on pro rata basis so as to arrive at the total<br />
foreign holding in the applicant company.<br />
Equity held by the largest Indian shareholder should be at least 51% of the<br />
total equity (excluding the equity held by Public Sector Banks and Public<br />
Financial Institutions) in the New Entity.<br />
The term largest Indian shareholder includes any or a combination of the<br />
following:<br />
• in the case of an individual shareholder: (i) the individual shareholder;<br />
(ii) a relative of the shareholder within the meaning of Section 6 of the<br />
Companies Act, 1956; (iii) a company/ group of companies in which<br />
the individual shareholder/HUF to which he belongs has management<br />
and controlling interest.<br />
• in the case of an Indian company: (i) the Indian company (i.e. a<br />
company having a resident Indian or a relative/HUF, either singly or in<br />
combination holding at least 51% of the shares); (ii) a group of Indian<br />
companies under the same management and ownership control.<br />
Provided that in case of a combination of all or any of the entities<br />
ISSUE 22 SEPTEMBER – OCTOBER 2003 9
mentioned above, each of the parties should have entered into a<br />
legally binding agreement to act as a single unit in managing the<br />
matters of the applicant company.<br />
To prevent control by foreign companies and to ensure that the spirit of the<br />
uplinking norms is maintained the following requirements have also been<br />
brought in:<br />
DISCLOSURES<br />
At the time of filing of application, the applicant is required to make full<br />
disclosure of Shareholders Agreements, Loan Agreements, and such other<br />
Agreements that are finalized or proposed. Any subsequent changes<br />
having bearing on these agreements must be disclosed to the Ministry of<br />
Information and Broadcasting (the "I&B") within 15 days.<br />
The applicant is required to provide the names and details of (i) proposed<br />
directors who are not resident Indians, (ii) any foreigners/NRIs to be<br />
employed or engaged by the company as either consultants (or in any<br />
other capacity) for more than 60 days in a year, or as regular employees.<br />
Prior permission for alteration of shareholding pattern and agreements:<br />
Company must obtain prior permission from I&B before effecting any<br />
alteration in the foreign shareholding patterns and the shareholding of the<br />
largest Indian shareholders, or any alteration in any other Agreements.<br />
THOSE IN CONTROL SHOULD BE RESIDENT INDIANS<br />
At least 3/4th of the Directors of the company and all key Executives and<br />
Editorial staff, CEO of the applicant-company, and/ or head of the channel<br />
are required to be resident Indians.<br />
REPRESENTATION ON BOARD<br />
The representation on the Board of Directors of the company should as far<br />
as possible be proportionate to the shareholding.<br />
Applicant company to retain control:<br />
• all appointments of key personnel (executive and editorial) are to be<br />
made by the applicant company without any reference from any other<br />
company, Indian or foreign.<br />
• the applicant company should have complete management control,<br />
operational independence and control over its resources and assets<br />
and must have adequate financial strength for running a news and<br />
current affairs TV channel.<br />
These safeguards appear to have been considered, in the wake of a<br />
controversial uplinking application, by STAR News. STAR News and its<br />
group companies are facing allegations that a foreign company is using<br />
"shell companies" and "dummy investors" to exercise proxy editorial and<br />
financial control. STAR News, whose application is pending approval, has<br />
been given time until 28th September 2003 to comply with the new<br />
Guidelines. Currently, Star is negotiating with prospective local partners to<br />
finalize the dominant Indian partner as required by the new Guidelines and<br />
have sought an extension of the compliance deadline.<br />
The Government has also decided in principle to rework the print medium<br />
FDI norms, so as to bring them at par with the electronic medium,<br />
wherever necessary.<br />
For more information please contact: vaibhav@nishithdesai.com<br />
1<strong>1.</strong> PRIVACY<br />
ARGENTINA<br />
COURTS ADDRESS THE USE<br />
OF LABOR E-MAIL ACCOUNTS<br />
The Secretariat of Communications, relying upon its Executive Power, is<br />
currently working on a project bill identified as Legal Protection of E-mails<br />
(the "Project"). Section 3 of the Project establishes that:<br />
• e-mail accounts provided by an employer for an employee as a<br />
consequence of a labor relation shall be considered to be the<br />
employer's property, and<br />
• the employer shall have the right to access and control the information<br />
of such e-mail accounts, if the terms and conditions of use and access<br />
have been notified to the employee.<br />
Two labor courts recently addressed the issue of e-mail accounts provided<br />
by an employer for an employee, and ruled under the same line of<br />
reasoning as the Project. However, the courts arrived at different results<br />
due to the particular facts and evidence of each case.<br />
In the first case, Labor Court of Appeals 9 held that the termination of the<br />
labor relation of an employee who had used the labor e-mail account for<br />
personal benefits was not a reasonable cause to fire the employee. The<br />
court took into account the fact that the employer had not notified or<br />
communicated to the employee the terms and conditions of use and<br />
access of the labor e-mail, as suggested by the Project. Accordingly, the<br />
employee's use of the e-mail account for personal matters was not<br />
sufficient to warrant a termination of employment.<br />
On the other hand, in a separate case, a First District Labor Court held that<br />
reasonable use of labor e-mail did not include receiving and forwarding<br />
pornographic texts or images. Here, the Court affirmed that the employee<br />
had been advised on several occasions about the labor e-mail policies,<br />
which opposed the employee's conduct.<br />
In spite of the different results, both courts coincided on the need to notify<br />
or communicate labor e-mail policies to employees, while emphasizing the<br />
validity and enforceability of those policies, as well as the employer's right<br />
to control the e-mail accounts.<br />
For more information please contact: gonzaloz@mille.com.ar<br />
ITALY<br />
NEW CODE FOR PRIVACY PROTECTION<br />
On 30th June 2003, the Italian Council of Ministers finally approved a new<br />
personal data protection code (the "Code") that will take effect on 1st<br />
January 2004.<br />
The new text unifies fragmented provisions from amended and integrated<br />
Law 675/1996, the Italian framework on personal data protection, which<br />
introduced several innovations in line with the Personal Data Protection<br />
Authority case law ("Garante per la protezione dei dati personali"), and<br />
European Directive 2000/58, regarding privacy and the Internet. The body<br />
of rules maintains an opt-in regime. However, the notification system<br />
represents an important innovation. While the current regime requires<br />
every party that is not specifically exempted to provide notice to the<br />
Authority, the new Code reverses the approach by enumerating specific<br />
cases that will require notification. Further, the Code, in line with the<br />
European trend, reduces to thirty months the maximum conservation term<br />
ISSUE 22 SEPTEMBER – OCTOBER 2003 10
of phone traffic data for use in crime assessment and prevention and<br />
introduces new dispositions concerning the privacy of the parties to a legal<br />
proceeding.<br />
Finally, the Code includes a regime of detailed new safety measures<br />
intended to safeguard databanks. The different measures are divided into<br />
three categories: dispositions applicable to processing with electronic<br />
instruments; dispositions to protect sensitive information or judicial acts;<br />
and minimum measures for all kinds of data processing.<br />
For more information visit: www.garanteprivacy.it<br />
or please contact: f.cugia@lexjus.com<br />
12. TARIFFS<br />
UK<br />
POLICY STATEMENT FOLLOWING REVIEW OF TWO-<br />
PART CHARGING<br />
The Director General of Telecommunications has concluded his review<br />
into the feasibility of establishing a system of two-part charging for<br />
wholesale interconnection and issued his final statement on 1st September<br />
2003.<br />
The Director General has concluded that the introduction of two-part<br />
charging is not appropriate in light of the costs and uncertain benefits it<br />
offers.<br />
Two-part charging involves the levying of separate tariffs for the setting up<br />
of a call (call set-up) and the maintaining of the connection for the duration<br />
of the call (call duration). Currently, BT averages the cost of both of these<br />
elements of call interconnection and charges a single, blended rate, levied<br />
on a pence per minute (PPM) basis.<br />
The issue of two-part charging has been considered by OFTEL on a<br />
number of occasions during the period since 1999. It was argued that twopart<br />
charging provided a more efficient means of aligning cost recovery for<br />
each call against its cause.<br />
In the consultation document, Policy review of two-part charging, issued in<br />
January 2003, the Director General indicated that he would only consider<br />
adopting two-part charging if the benefits of the approach significantly<br />
exceeded the direct costs of implementation.<br />
However, the Director has determined that, in fact, the potential costs of<br />
developing, implementing and maintaining a system to account for two-part<br />
charging would exceed the benefits likely to result to consumers, and<br />
would add a further burden on OFCOM at a time of considerable<br />
regulatory change.<br />
The Director General also considered that several of the proposed benefits<br />
of two-part charging were uncertain, including whether any resulting<br />
benefits would flow through to the retail level and uncertainty about the<br />
proper split between the call set up and duration components of the<br />
charge.<br />
For these reasons, the Director General concluded that it was not clear<br />
that any potential benefits of two-part charging, which would be derived at<br />
the wholesale level, would outweigh the costs of setting up and monitoring<br />
this approach, which BT estimated at approximately £5 million over the<br />
next five years.<br />
For more information please contact: colin.long@olswang.com<br />
13. TAX<br />
BRAZIL<br />
ISS ON IP-RELATED SERVICES<br />
On 1st August 2003, Supplementary Law No. 116 came into force in Brazil,<br />
and amended the current regulations on the Tax on Services (the "ISS").<br />
Besides adding several services to the list of ISS triggering events,<br />
Supplementary Law 116/03 establishes that the ISS will be levied on all<br />
services rendered to Brazilian entities, even if such services are fully or<br />
partially provided abroad. Where services are rendered abroad, the ISS will<br />
be paid by the principal instead of the service provider.<br />
Accordingly, the ISS may be assessed at a rate of up to 10% on services<br />
rendered by a foreign entity to a Brazilian company in the following areas,<br />
among others: information technology; licensing and assignment of rights<br />
to use software or trademarks; agency of industrial property, artistic, and<br />
literary rights; photographic, phonographic, and cinematographic work;<br />
technical and administrative assistance, even where it involves the<br />
assignment of personnel or technicians to Brazil; franchising; press<br />
agency, journalism and public relations; and art work.<br />
For more information please contact: rapdecunto@pinheironeto.com.br<br />
INDIA<br />
MAINTENANCE OF PCS NOT SUBJECT TO SERVICE<br />
TAX<br />
The Ministry of Finance (the "Ministry") has issued a series of notifications<br />
to clarify the scope and taxability of some of the new services that have<br />
been brought within the service tax net. The Indian industry had been<br />
anxious about the scope of these new services, and hence representations<br />
were made to the Ministry to obtain clarity on the same. Some of the<br />
important clarifications are discussed hereunder.<br />
From 1st July 2003, maintenance or repair services under contracts<br />
became subject to service tax at the rate of 8%. Pursuant to the bid made<br />
by Indian corporations, the Ministry has, in public interest, exempted<br />
maintenance and repair of computers, computer systems, and computer<br />
peripherals from the levy of service tax by Notification No. 20/2003, dated<br />
21st August 2003. Clearly all IT companies engaged in maintenance and<br />
repair services will benefit from this decision.<br />
Additionally, the Ministry has also made it clear in Circular No. 62/11/2003,<br />
dated 21st August 2003, that maintenance or repair services (other than<br />
maintenance and repair of computers, computer systems, and computer<br />
peripherals) rendered prior to 1st July 2003 will not be taxable irrespective<br />
of when the bills are raised or payments are made.<br />
The Ministry clarified under a separate Notification No. 19/2003, dated 21st<br />
August 2003, that in the case of the new category of service<br />
"commissioning or installation of plant, equipment, or machinery," where<br />
there is a turnkey contract - involving commissioning or installation along<br />
with supply of plant, machinery, or equipment - the assessee will have the<br />
option to pay the service tax either on 33% of the gross amount charged,<br />
or on the actual amount of service fee billed to the client.<br />
The Ministry also clarified by Notification No. 20/2003, dated 21st August<br />
2003, the scope of IT service under business auxiliary service. Thus, any<br />
service of back office processing that primarily relates to the operation of a<br />
computer system will be considered as IT services and will be exempt from<br />
ISSUE 22 SEPTEMBER – OCTOBER 2003 11
service tax. However, services such as pay roll processing, account<br />
management, etc., rendered even through the use of computer programs,<br />
cannot be termed as activities that primarily relate to computer systems,<br />
since the use of a computer in these services is secondary while the<br />
primary activity is that of business-related work. Accordingly, such services<br />
will attract a service tax of 8%. The mere fact that a computer or a laptop<br />
has been used for providing the service does not, ipso facto, make the<br />
service an IT service. IT service essentially means any service related to<br />
designing, developing, or maintaining computer software, or computerized<br />
data processing, system networking, or any other service primarily related<br />
to the operation of computer systems.<br />
For more information please contact: vaibhav@nishithdesai.com<br />
INDIA<br />
SERVER HELD TO CONSTITUTE<br />
PERMANENT ESTABLISHMENT<br />
A recent resolution between the U.S. competent authority and its Indian<br />
counterpart as regards VISA's obligation to pay taxes in India does not<br />
provide good news to this credit card major. VISA will now be required to<br />
shell-out the taxes demanded by the Indian revenue authorities, as the<br />
U.S. competent authority has concurred with the views of the Indian<br />
revenue authorities that VISA is liable to tax in India.<br />
The Indian revenue authorities had held that the revenues attributed to<br />
VISA operations carried out in India were taxable in India because VISA<br />
had a fixed place of business in India. The revenue authorities reckoned<br />
that the server through which business was transacted constituted a<br />
Permanent Establishment (the "PE") of VISA in India.<br />
Under Article 5 of the Indo-U.S. Double Taxation Avoidance Agreement<br />
(the "Treaty"), a PE means a fixed place of business through which an<br />
enterprise operates either wholly or partly, and includes a place of<br />
management, a branch, an office, a factory, a workshop, etc. Furthermore,<br />
as per Article 7 of the Treaty, the business profits of a U.S. company can<br />
be taxed in India only if it has a PE in India and such profits can be taxed<br />
only to the extent that these are attributable to the PE in India.<br />
The Indian revenue authorities had sought to tax VISA for that portion of its<br />
profits that could be attributed to its Indian operations by concluding that<br />
the server located in India constituted a PE of the company in India. VISA<br />
had contested the income tax demands raised on it and had approached<br />
the competent authority of the U.S. as per the Mutual Agreement<br />
Procedure (the "MAP") prescribed under the Treaty.<br />
The U.S. competent authorities have now settled the issue in favor of the<br />
Indian revenue authorities by holding that that VISA has a PE in India. The<br />
U.S. authorities have sought a reassessment of income tax demand raised<br />
on VISA, based on acceptance of the fact that the company has a PE in<br />
India.<br />
MAP proceedings are confidential in nature and, therefore, the details of<br />
the same are not published for public reference.<br />
For more information please contact: vaibhav@nishithdesai.com<br />
INDIA<br />
SERVICE TAX TO BPO COMPANIES<br />
The 2003-2004 budget has increased the service tax rate from 5% to 8%,<br />
and has brought ten new services within the tax net.<br />
Among the new taxable services is one "provided by a commercial concern<br />
in relation to business auxiliary service."<br />
The phrase "business auxiliary service" has been defined as any service in<br />
relating to:<br />
• "promotion or marketing or sale of goods produced or provided by or<br />
belonging to the client; or<br />
• promotion or marketing of service provided by the client; or<br />
• any customer care service provided on behalf of the client; or<br />
• any incidental or auxiliary support service such as billing, collection or<br />
recovery of cheques, accounts and remittance, evaluation of<br />
prospective customer or public relation services, and includes services<br />
as commission agent, but does not include any information technology<br />
service."<br />
Thus, the definition for "business auxiliary service" encompasses a wide<br />
range of activity. Services like client query processing, billing, accounting,<br />
payroll, telemarketing, etc. are now in the ambit of service tax.<br />
Furthermore, Notification 2/2003, dated 1st March 2003, has withdrawn an<br />
earlier notification that exempted from service tax activity involving<br />
payments received in foreign exchange. The combined effect would mean<br />
that most of the services that are typically rendered by BPO companies<br />
and call centers to their foreign or Indian clients could attract a service tax<br />
of 8%.<br />
Services rendered by BPO companies will not be subject to service tax if<br />
the services can be classified as "information technology services." An<br />
explanation provides: "For the removal of doubts, it is hereby declared that<br />
for the purposes of this clause 'information technology service' means any<br />
service in relation to designing, developing or maintaining of computer<br />
software, or computerized data processing or system networking, or any<br />
other service primarily in relation to operation of computer systems."<br />
Analysis of the above explanation reveals that the phrase "information<br />
technology service" has been defined in a very restrictive manner, and thus<br />
would cover only those services that relate to the design, development,<br />
maintenance, and operation of computer software/computer systems and<br />
system networking. Most of the above-mentioned categories do not apply<br />
to services provided by BPO companies; computerized data processing is<br />
the only exception that could be pertinent to BPO operation. However,<br />
several services of a BPO company, like medical transcript, billing, etc.,<br />
may not fall within the category of computerized data processing and<br />
hence the service tax may be applicable.<br />
The Budget's explanatory memorandum, however, seems to indicate<br />
otherwise. The relevant portion of the memorandum reads: "Business<br />
promotion and support services including customer care services. These<br />
services include launching of products, customer education programmes,<br />
conduct of seminars, help desk services, managing front offices, enquiry<br />
bureaus, etc. however computer enabled services, namely, data<br />
processing, networking, back office processing, computer facility<br />
management shall not be subjected to service tax."<br />
The language of the explanatory memorandum suggests that government's<br />
intention was to exclude computer enabled data processing, as well as<br />
computer enabled back office processing services, from the service tax.<br />
However, the definition of "business auxiliary services" covers most of the<br />
back office processing services as taxable services except the services<br />
that are computerized data processing services. The phrase "computerized<br />
data processing" is more restrictive than the phrase "computer enabled<br />
data processing." Furthermore, computer enabled back office processing is<br />
absent from the section altogether. This leads one to deduce that the<br />
action does not match the intention.<br />
In conclusion, keeping in mind the tremendous growth potential of this<br />
industry and the desire of Indian government and industry to be hub of<br />
back office services, it is necessary for the Government to clarify whether<br />
ISSUE 22 SEPTEMBER – OCTOBER 2003 12
its intention as expressed in the explanatory memorandum, but<br />
inadvertently not contained in section, applies.<br />
For more information please contact: vaibhav@nishithdesai.com<br />
INDIA<br />
TASK FORCE EXAMINES ISSUE OF TAXING<br />
FOREIGN CLIENTS<br />
The Indian Government recently set up a task force to examine whether a<br />
foreign company, which has outsourced some of its business operations to<br />
a BPO service provider in India, would be subject to tax in India.<br />
Incidentally, the Indian BPO service provider itself is generally eligible for a<br />
tax holiday benefit up until 31st March 2009.<br />
This issue has become relevant in light of the recent amendment to the<br />
meaning of the term "business connection" in the Finance Act, 2003,<br />
wherein the relationship between an Indian agent and a foreign entity can<br />
be termed as a business connection. Therefore, under certain<br />
circumstance, it is possible to subject the foreign company to tax in India.<br />
There does not seem to be any cause for worry among BPO service<br />
providers that provide services to a large number of clients, as such<br />
providers are unlikely to constitute "dependent agents" of their clients.<br />
However, the task force is examining whether clients of captive BPO<br />
service providers could be brought within the Indian tax net. Transferpricing<br />
norms will likely also be examined, and rules for transactions<br />
between the captive BPO service provider in India and the foreign parent<br />
may be tightened.<br />
In their meetings with the task force, industry representatives have strongly<br />
suggested a cautious approach to any amendment in the tax regime to<br />
ensure that the Indian BPO sector does not lose out to competitors in other<br />
jurisdictions.<br />
For more information please contact: vaibhav@nishithdesai.com<br />
MEXICO<br />
SPECIAL TELECOM TAX UPHELD<br />
In 2002, Congress passed a tax known as Special Tax on Product and<br />
Services (the "Impuesto Especial sobre Productos y Servicios", or the<br />
"IEPS") for the main purpose of taxing certain products and services that<br />
were deemed to be luxury products or services. Among the services to be<br />
taxed, at a 10% tax rate, were telecommunications services, excluding<br />
basic telephony and Internet access and use. As expected, hundreds of<br />
"amparo" proceedings were initiated by telecom companies before Federal<br />
courts seeking determinations of the inapplicability of such tax and arguing<br />
that the tax is unconstitutional where it discriminates between services.<br />
In June 2003, the Federal Supreme Court upheld the constitutionality of<br />
the IEPS on telecommunications service providers. It upheld a license to<br />
install, operate and exploit telecommunications services, finding that the<br />
exemption given to basic telephony and Internet was justified as those<br />
services are fundamental to the country's development.<br />
In light of the decision, cable operators and other telecom providers are<br />
pushing Congress to pass a resolution to repeal the IEPS on telecomm<br />
services. Among other arguments, the cable companies say that they have<br />
lost significant revenue as a direct result of the tax. Until now, only paging<br />
companies have been able to obtain an exemption on the tax.<br />
For more information visit: www.canieti.com.mx<br />
or please contact: aam@bstl.com.mx<br />
14. TELECOMMUNICATIONS<br />
AUSTRIA<br />
NEW TELECOMMUNICATIONS ACT 2003<br />
On 20th August 2003, the new Austrian Telecommunications Act 2003 (the<br />
"TKG 2003," or the "Act") came into force to implement the new EU<br />
regulatory package. The Act's most significant change to the former regime<br />
involves the new significant market power (the "SMP") definition and<br />
market analysis-procedure. The TKG 2003 departs from the prior sectorspecific<br />
definition of SMP and instead applies the respective definition of<br />
general EU competition law. Furthermore, the NRA must determine<br />
operators having such SMP in the course of a market analysis, which the<br />
NRA must conduct for every identified relevant market. Such relevant<br />
markets will be defined by an NRA regulation that is based on the<br />
Commission's Recommendation on Relevant Product and Service<br />
Markets.<br />
Another major change to the former regime is the abandonment of<br />
individual licenses. As a result, all telecommunication services may be<br />
provided on the basis of a general authorization. The prospective service<br />
provider must merely notify the NRA of the intended commencement of its<br />
services. The NRA has installed a specific web interface for this purpose.<br />
Communication parameters and frequency spectrum continue to be<br />
allocated individually by the NRA since they are considered to be scarce<br />
resources.<br />
One issue that the EU Directives left to the Member States is that of<br />
whether to allow frequency spectrum trading. The TKG 2003 chose to<br />
facilitate frequency spectrum trading under NRA supervision. The transfer<br />
of frequency spectrum from one operator to another is therefore only<br />
legitimate with the regulator's consent. In assessing the admissibility of<br />
frequency trading, the NRA must take into account the effects of such<br />
transfer on competition in the relevant market. This regulatory consent<br />
requirement is designed to prevent the undesired strengthening or creation<br />
of dominant positions by the hoarding of frequency spectrum.<br />
The text of the TKG 2003 is accessible at the website of the regulatory<br />
authority, (http://www.rtr.at).<br />
For more information visit: http://www.rtr.at<br />
or please contact: Stephan.polster@dbj.at<br />
CHILE<br />
WI-FI TECHNOLOGY IS NOW A REALITY<br />
The Chilean Undersecretary of Telecommunications (the "Subtel") now<br />
permits use of wireless fidelity (the "Wi-Fi") equipment, according to the<br />
Chilean Official Gazette Exempt Resolution N°991 (the "Resolution"),<br />
published on 26th August 2003. Wi-Fi technology allows laptops and<br />
handheld computers to access broadband speed Internet within a limited<br />
distance from an access point or "hot spot".<br />
The new regulation:<br />
• provides that bands subject to Wi-Fi equipment can operate within real<br />
estates (not open areas);<br />
• sets forth the maximum radiation emissions allowed for Wi-Fi<br />
equipment; and<br />
• provides that certain bands shall be limited for use within closed areas<br />
such as houses, buildings, offices, factories and warehouses, etc.<br />
ISSUE 22 SEPTEMBER – OCTOBER 2003 13
It should be noted that while the Resolution does not require a telecom<br />
permit for use of Wi-Fi equipment, importers or manufacturers of such<br />
goods must obtain a certificate from Subtel attesting that they sufficiently<br />
comply with Chilean technical requirements.<br />
Subtel's Resolution is concordant with its policies to encourage new<br />
technologies and to increase free competition among different operators in<br />
the market. Additionally, Subtel has indicated that it is evaluating the use of<br />
Wi-Fi technology in open areas.<br />
As a result of the Resolution, five companies to date are providing Wi-Fi<br />
services in Chile, and many others are expected to soon follow.<br />
For more information please contact: asilva@carey.cl,<br />
msanhueza@carey.cl or nbakovic@carey.cl<br />
HK<br />
REGULATION OF CHANGE OF<br />
SHAREHOLDINGS OF TELECOM COMPANIES<br />
The Telecommunications Ordinance has been amended to give the<br />
Telecommunications Authority (the "Authority") power to regulate the<br />
change of carrier licensees' shareholdings. The amendment was passed<br />
on 18th July 2003, but its principal provisions will take effect at a later date<br />
as determined by the Secretary for Commerce, Industry and Technology.<br />
The Authority also issued draft guidelines on 4th August 2003 to explain<br />
how it will enforce the amended provisions. The guidelines are available<br />
for public consultation until 29th September 2003.<br />
Once the new rules enter force, any person who intends to own a<br />
significant equity share in a telecom carrier will need to consider both the<br />
effects on competition in the telecom market and whether consent from the<br />
Authority is required.<br />
For more information visit: http://www.ofta.gov.hk/report-paperguide/paper/consultation/cp20030804.pdf<br />
or please contact: dae@jsm.com.hk<br />
HK<br />
TELECOM SERVICE OPERATORS'<br />
ACCESS TO PRIVATE BUILDINGS<br />
TELECOM OPERATORS' RIGHT OF ACCESS<br />
Telecom operators may access private buildings only to install and<br />
maintain facilities that are necessary to provide services to building<br />
residents. Operators may access only the common parts of buildings, and<br />
may not carry on marketing and promotional activities in buildings.<br />
Before entering a building, a telecom operator should obtain prior<br />
permission from building management. Without such permission, building<br />
management may take action against the telecom operator for<br />
unauthorized entry and/or nuisance. If building management refuses to<br />
grant access upon request, the telecom operator can:<br />
• approach the Office of the Telecommunications Authority for<br />
mediation;<br />
• apply to a magistrate for an order requiring building management to<br />
comply; or<br />
• apply to the Telecommunications Authority for a certificate certifying<br />
that it has a statutory right of access.<br />
TELECOM OPERATORS' OBLIGATIONS<br />
The telecom operator is required to:<br />
• cause as little damage as possible to the building;<br />
• pay the full cost of installation; and<br />
• pay the electricity bill for the power supply to their equipment (unless<br />
building management agrees otherwise).<br />
COORDINATOR FOR TELECOM OPERATORS<br />
In the event that there is more than one telecom operator interested in<br />
accessing the same building, one of these telecom operators should be<br />
appointed as a coordinator to lease with building management.<br />
The coordinator's main responsibilites are to:<br />
• work out a consolidated proposal;<br />
• coordinate installation work to minimize disruption to residents; and<br />
• act as one contact point among the Office of the Telecommunications<br />
Authority, building management, and the telecom operators involved.<br />
Points to note by the building's incorporated owners and office of building<br />
management<br />
Although telecom operators are entitled to access the common parts of<br />
buildings, those parts remain the property of land managed by building<br />
management. Accordingly, as long as the telecom operators' statutory right<br />
of access is not curtailed or inhibited, building management may, in good<br />
faith, negotiate with telecom operators as to the technical and operational<br />
details of the access. Guidelines suggest the following:<br />
Before commencement of installation or maintenance work, building<br />
management should:<br />
• provide relevant building drawings and layout plans of the common<br />
parts, if available, to the telecom operator;<br />
• respond promptly to the telecom operator's request for site visits within<br />
14 days upon receipt of a written request from the telecom operator,<br />
and give at least 5 working days advance notice to the telecom<br />
operator of the agreed date of the site visit;<br />
- obtain a consolidated proposal which contains all the requirements of<br />
the telecom operator;<br />
• review the proposal by considering the date and time for carrying out<br />
the relevant work, the arrangement for workmen to access the<br />
building, the installation method and location of the equipment, and the<br />
arrangement for operation and maintenance of the equipment in<br />
future; and<br />
• confirm with the telecom operator the acceptance of the proposal, and<br />
provide a start-date for the relevant work.<br />
After installation or maintenance work is commenced, building<br />
management should:<br />
• permit and assist the telecom operator to access the common parts of<br />
the building and the in-building telecommunications system in order to<br />
install the required equipment; and<br />
• make available space in the common parts and the in-building<br />
telecommunications system to the telecom operator.<br />
Overall, building management should NOT:<br />
• impose any fees, deposit, or access charge on the telecom operator<br />
for access to the building or the use of the common parts of the<br />
building;<br />
• demand that the telecom operator employ the contractor or company<br />
nominated by building management to install the telecom operator's<br />
antenna, cable and/or equipment; or<br />
• limit the choice of technology to be used or predetermine the access<br />
method of the telecom operator.<br />
For more information please contact: dae@jsm.com.hk<br />
ISSUE 22 SEPTEMBER – OCTOBER 2003 14
ITALY<br />
THE TELECOMMUNICATIONS CODE<br />
On 31st July 2003, the Italian Government approved the<br />
Telecommunications Code, implementing the EU regulatory framework for<br />
electronic communications.<br />
Among the Code's important innovations are:<br />
• simplification of the licensing regime, thus aligning it with the simplified<br />
general authorization procedure as provided by the Authorization<br />
Directive; in this respect, the operator shall obtain authorization, where<br />
the Ministry does not expressly deny it, and can immediately execute<br />
the telecommunications activity.<br />
• introduction of spectrum trading; this will assist those operators who<br />
are already experiencing financial difficulties.<br />
• a process for identifying and notifying additional markets under the<br />
market analysis procedure;<br />
• simplification of the administrative procedures in order to guarantee<br />
the implementation of non-discriminatory and transparency principles,<br />
including those procedures affecting the release by local entities of<br />
rights of way and installation of communications networks on and/or<br />
under public and private properties;<br />
• measures for the development of broadband services; and<br />
• a provision of convergence and interoperability between networks and<br />
services of electronic communication.<br />
For more information visit: www.comunicazioni.it<br />
or please contact: f.cugia@lexjus.com<br />
MEXICO<br />
STRENGHTENING OF COFETEL'S AUTHORITY<br />
We have previously reported on the failed process to enact a new federal<br />
telecommunications law for more than one year. Among the most<br />
important changes sought by such reform were to define the scope of<br />
authority that the Mexican Federal Telecommunications Commission<br />
("COFETEL") would have vis-à-vis the Ministry of Communications and<br />
Transportation ("SCT") on telecom topics.<br />
About a month ago, the Minister of Communications and Transportation<br />
indicated that he would seek to amend the SCT's internal regulations to<br />
clarify the respective powers of the Undersecretary of Communications<br />
and Transportation and COFETEL. The amendment should address the<br />
complaints of the industry with respect to an overlapping of authority<br />
between the SCT and COFETEL on issues such as the granting of<br />
licenses to install, operate and exploit a public telecommunications<br />
network. This is one of the reasons why some argue COFETEL has lacked<br />
importance in the sector and has become a silent witness to the many<br />
obstacles faced by the industry in the recent year.<br />
The industry may view the initiative at the SCT's website<br />
(http://www.sct.gob.mx) in the weeks prior to its enactment. The initiative is<br />
expected to vest COFETEL with the authority to regulate the radio electric<br />
spectrum while the corresponding licenses will be granted by the SCT.<br />
International matters that had been dealt with by COFETEL will now<br />
become SCT's responsibility.<br />
For more information visit: www.sct.gob.mx<br />
or please contact: aam@bstl.com.mx<br />
NEW ZEALAND<br />
COMMERCE COMMISSION<br />
RECOMMENDS LLU<br />
The Commerce Commission has recommended unbundling the local loop<br />
of Telecom New Zealand Limited ("Telecom"), which is the incumbent<br />
telecommunications operator in New Zealand.<br />
The Telecommunications Act 2001 (the "Act") established a<br />
telecommunications-specific regulator (known as the Telecommunications<br />
Commissioner) within New Zealand's anti-trust regulatory body, the<br />
Commerce Commission. The Act provides for access seekers or access<br />
providers of a "designated service" or "specified service" to apply to the<br />
Commerce Commission for a determination of the terms on which the<br />
service must be supplied. Determinations on designated services can<br />
include both price and non-price terms, whereas designations on specified<br />
services can only include non-price terms.<br />
Section 64 of the Act requires the Commerce Commission to undertake a<br />
review of whether unbundling Telecom's local loop is desirable and to<br />
deliver a final report to the Minister of Communications by 20th December<br />
2003. In the draft report, released on 18th September 2003, the Commerce<br />
Commission has recommended:<br />
• designating unbundling of Telecom¿s local loop networks;<br />
• designating unbundling of Telecom¿s fixed Public Data Network;<br />
• designating access to co-location and backhaul services;<br />
• applying benchmarking and cost-based pricing as the applicable<br />
pricing principles.<br />
The Commerce Commission is seeking submissions on the draft report by<br />
16th October 2003 and intends holding a public conference on it from 28th<br />
to 31st October 2003 in Wellington.<br />
For more information visit:<br />
http://www.comcom.govt.nz/telecommunications/llu/draft18sept2003.pdf<br />
or please contact: david.boswell@bellgully.com<br />
UK<br />
GOVERNMENT DECISION RELEASED<br />
ON USE OF GSM GATEWAYS<br />
On 18th July 2003 the Government released its final decision on the status<br />
of end-user equipment connected to mobile networks, including so-called<br />
"GSM gateways". These devices enable fixed telephone networks to<br />
connect to the mobile network by using a fixed device to mimic a mobile<br />
handset and access mobile network operators' base stations in the same<br />
way as a normal mobile customer, thus utilising the GSM radio frequency.<br />
It has long been a contentious area as to whether the commercial use of a<br />
GSM gateway to carry third-party traffic is a breach of the Wireless<br />
Telegraphy Act 1949 ("the WTA"). As the gateways use GSM frequencies,<br />
which are only licensed to GSM operators, the gateway operators may fall<br />
outside the scope of the WTA. Section 1(1) of the WTA requires all<br />
wireless telegraphy apparatus to be licensed, or specifically exempted from<br />
the need for a licence. To this end, the Wireless Telegraphy (Exemption)<br />
Regulations 1999 were enacted to authorise network customers to use<br />
their mobile handsets without the need for individual licences.<br />
Following a consultation process, the Government has now confirmed that<br />
the private use of GSM gateways will continue to be protected by the<br />
exemption. This will also extend to protect, for example, parties who install<br />
ISSUE 22 SEPTEMBER – OCTOBER 2003 15
gateways as extensions to their PABX systems or where companies' selfprovide<br />
termination services for their staff. However, other than for private<br />
use, the provision of GSM gateway services to third parties will remain<br />
unlawful under the WTA.<br />
The Radiocommunications Agency, which is the agency responsible for<br />
enforcing the WTA requirements until the new super-regulator, Ofcom,<br />
takes over at the end of 2003, has suggested that commercial GSM<br />
gateway providers come to a suitable, pragmatic arrangement with mobile<br />
operators allowing them to continue to provide the services, under the<br />
authority of the mobile operator's licence. There would appear to be little<br />
commercial likelihood of mobile operators consenting to this activity.<br />
Indeed, the gateway service provider, Floe Telecom Ltd, lodged a<br />
complaint with Oftel on 7 August 2003 against Vodafone, after the mobile<br />
operator periodically suspended Floe's access on the grounds that its<br />
gateway activities were unlawful. Floe has alleged that it has a valid<br />
contract in place with Vodafone that makes its gateway activities legal.<br />
Floe alleges that Vodafone's actions amount to an unlawful refusal to<br />
supply.<br />
For more information please contact: colin.long@olswang.com<br />
COMMENTARY<br />
FRANCE<br />
USE OF PERSONAL DATA<br />
FOR MARKETING PURPOSES<br />
By S. LIPOVETSKI (slipovetsky@kahnlaw.com)<br />
and F. PERBOST (fperbost@kahnlaw.com)<br />
The principal source of legislation regulating data protection in France is<br />
Law No. 78-17 of 6 January 1978 known as "Loi Informatique et Libertés"<br />
(the "Law"). The Law is expected to be amended to comply with the<br />
provisions of European Directive 95/46/EC of October 24, 1995 (the "EU<br />
Data Protection Directive"). The draft law implementing the EU Data<br />
Protection Directive (the "Draft Law") passed its first reading on 1st April<br />
2003.<br />
At present, personal data may be used for marketing purposes if the<br />
purpose is identified in the filing with the French data protection authority<br />
(the "CNIL") and if the persons whose data are collected are informed or<br />
gave their consent.<br />
The Law only requires the consent of the data subject (i.e. opt-in) when<br />
automatic processing of sensitive personal data (as indicated above) is<br />
involved.<br />
In parallel, the Law provides for a general opt-out principle: the data<br />
subject may oppose the collection of his or her personal data for legitimate<br />
reasons.<br />
To enable the individual to exercise his or her right to object to the<br />
collection of personal data, the Law requires that persons whose data are<br />
being collected receive the following information:<br />
• whether their responses are mandatory or optional;<br />
• the consequences of their failing to provide a response;<br />
• persons (both individuals and legal entities) which will receive their<br />
data; and<br />
• their right to access their data and to obtain the correction of incorrect<br />
data.<br />
This information must be provided to the data subject at the time of<br />
collection of data and at a later date if the information changes. If the data<br />
subject is not informed of the persons who will receive his or her data at<br />
the time of collection of the data, he or she must be provided with this<br />
information prior to the transfer of the data to another person.<br />
The major innovation of the Draft Law is to establish a general opt-in<br />
system where all individuals must give their consent to the collection of<br />
data relating to them.<br />
Under the Draft Law, the following information shall be provided to the<br />
persons on whom the data are collected:<br />
• identity of the data controller,<br />
• purpose of the processing,<br />
• whether their responses are mandatory or optional;<br />
• the consequences of failing to provide a response;<br />
• persons (both individuals and legal entities) who will receive their data;<br />
• the right to access their data and to correct incorrect data, and the<br />
right to to oppose to the collection of such data; and<br />
• to prevent the transfer of personal data to any country that is not a<br />
State member of the European Community, if any.<br />
Often companies wish to use personal data to send to its customers<br />
unsolicited information about products or services. Most of the claims<br />
received by the CNIL deal with the exercise of the rights specified in the<br />
Law by persons on whom data are collected, and in particular, with the<br />
right to oppose receiving unsolicited mails.<br />
According to the terms of Article L 33-4-1 of the Posts and<br />
Telecommunications Code (inserted by Order n° 2001-670 of 25 July<br />
2001, Article 16), it is prohibited to directly canvass, using automatic calling<br />
machines or fax machines, telecommunications network subscribers or<br />
users who have not consented to receiving such calls. It is also provided<br />
that operators or their distributors shall provide free of charge to those<br />
subscribers or users who so wish, the means to give their consent to<br />
receiving calls referred to in the above subparagraph. They shall make<br />
available to any person who so requests the list of these subscribers or<br />
users.<br />
At present, the means to give such consent are not determined.<br />
In addition, Article L121-20-5 of the Consumer Code (inserted by Order no.<br />
2001-741 of 23 August 2001 art. 5 and art. 12) specifies that direct<br />
canvassing by a professional, by means of automatic calling machines or<br />
faxes, of consumers who have not expressed their agreement to receive<br />
such calls is prohibited. Distance communication methods other than those<br />
mentioned in the previous paragraph, involving personal communication,<br />
may only be used where the consumer has not raised an objection. The<br />
conditions under which the consumer expresses his/her agreement to<br />
receive the calls mentioned in the first paragraph, information that the<br />
professional must supply to the consumer regarding his opportunity to raise<br />
an objections as well as the conditions under which objection registers are<br />
kept are to be prescribed by a Council of State decree. Such Council of<br />
State decree has not been adopted.<br />
The sending of unsolicited e-mail is subject to the opt-out principle at<br />
present but should be subject to the prior consent of the persons who are<br />
solicited as soon as a French draft law ("Projet de loi sur l'économie<br />
numérique") is adopted. The last version of the draft law is a version dated<br />
June 26, 2003, modified by the French Senate and transmitted to the<br />
French National Assembly for its second reading. This draft law specifies<br />
that the use of automated calling systems without human intervention<br />
(automatic calling machines), facsimile machines (fax) or electronic mail for<br />
the purposes of direct marketing may only be allowed to subscribers who<br />
ISSUE 22 SEPTEMBER – OCTOBER 2003 16
have given their prior consent. Regarding electronic mail, the requirement<br />
to obtain prior consent applies if the person is registered with the Registry<br />
of Commerce and Companies.<br />
However the Projet de loi sur l'économie numérique provides that where a<br />
natural or legal person obtains from its customers their electronic contact<br />
details for electronic mail in the context of the sale of a product or a<br />
service, the same person may use these contact details for direct<br />
marketing of its own products or services provided that customers clearly<br />
and distinctly are given the opportunity to object, free of charge and in an<br />
easy manner, to such use of contact details both when they are collected<br />
and on the occasion of each message in case the customer has not initially<br />
refused such use.<br />
A use of personal data for marketing purposes without informing the<br />
person on whom the data are collected of this use and not for the purposes<br />
specified in the data controller's filing with the CNIL, may give rise to<br />
criminal sanctions. According to the terms of Article 226-18 of the Criminal<br />
Code, the collection of data by fraudulent, unfair or unlawful means, or the<br />
processing of personal information relating to a natural person despite this<br />
person's opposition, where this objection is based on legitimate grounds, is<br />
punished by a fine of 1 500 000 euros (for companies). More specific<br />
sanctions should be adopted with respect to unsolicited communications by<br />
way of a decree.<br />
The Projet de loi sur l'économie numérique specifies that the CNIL will<br />
receive, by any means, including by electronic mail, claims relating to non<br />
compliance with the provisions regarding electronic advertising.<br />
At present, the CNIL can only give warnings or denounce to the<br />
prosecution department any violation of the Law. Its powers will be<br />
extended as it will be possible for the CNIL to order any person to stop<br />
unlawful processing or to order the interruption of the data processing for a<br />
three-month-duration.<br />
The CNIL will probably be entitled to impose fines not to exceed 150,000<br />
euros (300,000 euros without exceeding 5% of the turnover in case of<br />
repeated breach within a five years period from the date of the previous<br />
fine).<br />
ISSUE 22 SEPTEMBER – OCTOBER 2003 17
EDITOR / EDITORIAL BOARD<br />
EDITOR IN CHIEF: Stephan LE GOUEFF,<br />
, Luxembourg<br />
MANAGING EDITOR: Neil I. JACOBS, NI Jacobs & Associates, New York<br />
Country Firm Contact E-mail Site<br />
Argentina Estudio Millé Gonzalo ZORRILLA gonzaloz@mille.com.ar www.reis.com.ar/estudiomille<br />
Austria Dorda, Brugger & Jordis Stephan POLSTER Stephan.polster@dbj.at www.dbj.at<br />
Belgium Altius Herman DE BAUW herman.debauw@altius.com http:///<br />
Brazil Pinheiro Neto - Advogados Raphael de CUNTO rapdecunto@pinheironeto.com.br www.pinheironeto.com.br<br />
Canada<br />
<strong>McCarthy</strong> Tétrault<br />
Michel RACICOT (Montreal)<br />
Charles MORGAN (Toronto)<br />
mracicot@mccarthy.ca<br />
cmorgan@mtl.mccarthy.ca<br />
www.mccarthy.ca<br />
Chile Carey y Cía. Ltda. Alfonso SILVA asilva@carey.cl www.carey.cl<br />
China Lehman, Lee Xu Blaine TURNACLIFF bturnacliff@lehmanlaw.com www.lehmanlaw.com<br />
Colombia Cavelier Abogados Daniel PEÑA cavelier@cavelier.com www.cavelier-abogados.com<br />
Egypt Kamel Law Office Mohamed KAMEL kmlaw@kamelaw.com www.ie-eg.com/kamellaw<br />
Finland Roschier Holmberg Attorneys Ltd Craig THOMPSON Craig.thompson@roschier.com www.roschier.com<br />
France Kahn & Associés Sabine LIPOVETSKY slipovetsky@kahnlaw.com www.kahnlaw.com<br />
Germany Wessing Jürgen A. HEILBOCK j.heilbock@wessing.com www.taylorwessing.com<br />
Hong Kong Johnson Stokes & Master David ELLIS dae@jsm.com.hk www.jsm.com.hk<br />
India Nishith Desai Associates Vaibhav PARIKH vaibhav@nishithdesai.com www.nishithdesai.com<br />
Ireland McCann Fitzgerald Damian COLLINS<br />
Mccann-<br />
Fitzgerald@pophost.eunet.be<br />
www.mccann-fitzgerald.ie<br />
Israel Soroker-Agmon, Advocates&Patent Attorneys Jonathan AGMON mail@ip-law.co.il www.ip-law.co.il<br />
Italy LexJus Fabrizio CUGIA f.cugia@lexjus.com http:///<br />
Lebanon Alem & Associates Leila LAILA leila@alemlaw.com www.alemlaw.com<br />
Luxembourg LE_GOUEFF@vocats.com Stéphan LE GOUEFF LE_GOUEFF@vocats.com www.vocats.com<br />
Malaysia Zaid Ibrahim & Co. Julian DING julian.ding@my.zaidibrahim.com http:///<br />
Mexico Barrera, Siqueiros y Torres Landa, S.C. Andrés ACEDO aam@bstl.com.mx www.bstl.com.mx<br />
Netherlands Kennedy Van der Laan Martine DE KONING martine.de.koning@kvdl.nl www.kvdl.nl<br />
New Zealand Bell Gully David G. BOSWELL david.boswell@bellgully.com www.bellgully.com<br />
Norway Thommessen Krefting Greve Lund Arne RINGNES Arne.ringnes@tkgl.no www.tkgl.no<br />
Portugal Vieira De Almeida & Associados Margarida COUTO mc@vieiradealmeida.pt http:///<br />
South Africa Webber Wentzel Bowens Peter GREALY peterg@wwb.co.za www.wwb.co.za<br />
Spain Gomez Acebo & Pombo Almudena ARPON de MENDIVIL Aam@gomezacebo-pombo.com www.gomezacebo-pombo.com<br />
Sweden Advokatfirman Lindahl Erik BERGENSTRÄHLE erik.bergenstrahle@lindahl.se www.lindahl.se<br />
Switzerland Bär & Karrer Michele BERNASCONI m.bernasconi@baerkarrer.ch www.baerkarrer.ch<br />
Turkey Hergüner, Bilgen & Özeke Kayra UCER kucer@hbo-law.com.tr http:///<br />
UAE Afridi & Angell Antony WATSON aaadh@emirates.net.ae www.afridi.com<br />
UK Olswang Colin LONG colin.long@olswang.com www.olswang.co.uk<br />
ISSUE 22 SEPTEMBER – OCTOBER 2003 18
TABLE OF CONTENTS BY COUNTRY<br />
NEWS ITEMS<br />
Country Title Category<br />
ARGENTINA Courts address the use of labor e-mail accounts PRIVACY<br />
AUSTRIA<br />
BRAZIL<br />
CANADA<br />
New rules on unsolicited commercial communication<br />
New Telecommunications Act 2003<br />
Law powers up piracy combat weapons<br />
Legal protection for software<br />
Anatel announces creation of a new public service<br />
ISS on IP-related services<br />
Enforceability of webwrap agreements<br />
Foreign ownership in the communications sector<br />
CONSUMER PROTECTION<br />
TELECOMMUNICATIONS<br />
COMPUTER CRIME<br />
INTELLECTUAL PROPERTY<br />
MARKET ACCESS<br />
TAX<br />
ELECTRONIC COMMERCE<br />
MARKET ACCESS<br />
CHILE WI-FI technology is now a reality TELECOMMUNICATIONS<br />
EU Regulation on enforcement of intellectual property rights INTELLECTUAL PROPERTY<br />
FINLAND<br />
HONG KONG<br />
INDIA<br />
ITALY<br />
FICORA issues regulation on mobile phone No portability<br />
New act on Finnish domain names<br />
Regulation of change of shareholdings of telecom companies<br />
Telecom service operators' access to private buildings<br />
India grants first exclusive marketing rights<br />
New IP laws enter into force<br />
Supreme Court clears telecast of Karishma<br />
MIB revises uplinking guidelines<br />
Maintenance of PCs not subject to service tax<br />
Server held to constitute permanent establishment<br />
Service tax to BPO companies<br />
Task force examines issue of taxing foreign clients<br />
New Code for privacy protection<br />
The Telecommunications Code<br />
<strong>COMPETITION</strong><br />
DOMAIN NAMES<br />
TELECOMMUNICATIONS<br />
TELECOMMUNICATIONS<br />
INTELLECTUAL PROPERTY<br />
INTELLECTUAL PROPERTY<br />
INTELLECTUAL PROPERTY<br />
MEDIA<br />
TAX<br />
TAX<br />
TAX<br />
TAX<br />
PRIVACY<br />
TELECOMMUNICATIONS<br />
LUXEMBOURG New law fostering IT outsourcing in the financial sector FINANCIAL SERVICES<br />
ISSUE 22 SEPTEMBER – OCTOBER 2003 19
Country Title Category<br />
MEXICO Antitrust concerns: implementing sound regulation <strong>COMPETITION</strong><br />
MEXICO<br />
New regulations on electronic signature<br />
Special telecom tax upheld<br />
Strenghtening of COFETEL's authority<br />
DIGITAL SIGNATURES<br />
TAX<br />
TELECOMMUNICATIONS<br />
NEW ZEALAND Commerce commission recommends LLU TELECOMMUNICATIONS<br />
TURKEY Dominance in the mobile telecoms market <strong>COMPETITION</strong><br />
UK<br />
Persistent misuse of electronic communications<br />
Policy statement following review of two-part charging<br />
Government decision released on use of GSM Gateways<br />
CONSUMER PROTECTION<br />
TARIFFS<br />
TELECOMMUNICATIONS<br />
COMMENTATY<br />
FRANCE<br />
Use of personal data for marketing purposes<br />
Contact “the l.i.n.k.” at: editor@the-link.lu<br />
© opyright: Stephan LE GOUEFF, , Luxembourg<br />
This newsletter may be reproduced and distributed in full, with no edits or changes, free of charge.<br />
The posting of the newsletter on a web site requires the consent of the Editor in Chief.<br />
ISSUE 22 SEPTEMBER – OCTOBER 2003 20