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Australia – Online TMT News.

21 July, 2014

 

Legal News & Analysis – Asia Pacific – Australia – TMT

 

ACCC Cannot Intervene In Telcos’ Commercial Arrangements

 
The Australian Competition and Consumer Commission (ACCC) has ceased arbitration of a dispute between a number of telecommunications providers following a Full Federal Court decision that the regulator did not have the power to intervene in commercial arrangements. The dispute was initially notified to the ACCC by Vocus Fibre Pty Ltd, Adam Internet Pty Ltd and Chime Communications Pty Ltd under the Telecommunications Act 1997 (Cth) concerning Telstra’s proposed changes to charges for access to its infrastructure, such as telephone exchanges and ducts, pursuant to agreements with the companies which allowed Telstra to vary the charges.Under the agreements, the ACCC had the power to arbitrate “failing agreements”.

 
Telstra had appealed the Federal Court’s decision, which had held that there was a dispute that could be arbitrated by the ACCC. The telcos argued that they had validly invoked their power to vary the existing terms and conditions under the agreement. The Full Federal Court agreed with this, overturning the lower court’sdecision. It held that, as the dispute related to the parties’ agreed terms and conditions, this could not be validly heard by the ACCC.

 

  • A link to the ACCC’s media release can be found here.
  • A link to the Full Federal Court decision can be found here.

 

Cupid Fails To Protect Lonely Hearts: Dating Site Operator Found To Have Breached Privacy

 
Dating website operator Cupid Media Pty Ltd (Cupid) has been found to have breached the Privacy Act 1988(Cth) by failing to take reasonable steps to secure users’ personal information. Cupid operates a number of niche dating websites, based on a user’s ethnicity, location and religion. The Australian Privacy Commissioner (the Commissioner) opened an own motion investigation into Cupid after media reports that alleged that unauthorised persons had acquired the personal information of Cupid users.

 
The Commissioner found that Cupid had breached a number of the National Privacy Principles (NPPs) which were applicable at the time, prior to their replacement by the Australian Privacy Principles in March 2014.

 

Although Cupid did not handle credit card or financial information, the Commissioner found that the company handled “sensitive” information relating to users’ ethnicity and sexual preference and was therefore required to undertake more stringent steps than companies which did not handle sensitive information. The company had failed to take reasonable steps to destroy or permanently de-identify personal information of accounts that were no longer active. Additionally, Cupid’s storage of passwords in plain text was a failure to take reasonable security steps, as it did not undertake password encryption strategies such as hashing and salting, which were basic security steps that were available to Cupid at the time of the data breach.

 
The Commissioner found that Cupid had responded appropriately to the data breach by identifying the software vulnerability and applying the patch released by the software security contractor to ensure the vulnerability was patched and the software met best practice standards. Cupid had also sent a notification to all affected users and automatically reset affected account passwords as well as monitoring servers. The Commissioner also highlighted the extensive privacy and data remediation program Cupid undertook after the breach, including the development and implementation of a data breach response plan. These measures were found to have addressed the Commissioner’s concerns and the investigation was closed.

 

  • A link to the Office of the Australian Information Commissioner’s media release can be found here.

 
Calls To 1800 And 13/1300 Numbers More “Friendly”

 
The Australian Media and Communications Authority (ACMA) has released a new framework for call charges from mobile phones to 1800 and 13/1300 numbers. This was developed in consultation with the Communications Alliance, which is the primary telecommunications industry body. Under the changes, mobile calls to 1800 numbers will now be free of charge to the caller and mobile calls to 13/1300 will be offered as part of “13-Friendly” mobile plans, which will charge these calls against an included-value allowance, instead of billingthem separately. These changes come as a response to concerns about the high cost of making calls to these numbers from mobiles and the particular disadvantage faced by vulnerable consumers who must make frequent calls to essential services that are only accessible via these numbers. The ACMA will monitor the implementation and availability of this framework by the industry.

 

  • A link to the ACMA’s media release can be found here.

 
Opportunities Narrow For Software Patents To Be Granted In The US

 
The US Supreme Court has ruled that abstract ideas implemented by a computer are not patent-eligible inventions: Alice Corporation Pty Ltd v CLS Bank International 573 US __ (2014). Alice Corporation Pty Ltd held three patents disclosing an arrangement for mitigating settlement risk using a computer system as a third-party intermediary. These patents covered the method for exchanging financial obligations (the method patent), a computer system configured to implement the method for exchanging obligations (the system patent) and a computer readable medium containing program code for performing the method of exchanging obligations (the media patent). CLS Bank International, which operates a global network facilitating currency transactions,sought to have the patent declared invalid.

 
In relation to the method patent, the Court held that intermediated settlement was a fundamental and longstanding commercial practice, and therefore fell within the definition of an “abstract idea”, which was not patentable. The fact that the method claims required generic computer implementation did not make this a patent-eligible invention. The system and media patents were also declared invalid as they did not add anything to the fundamental abstract idea.

 

  • A link to the decision can be found here

 

US Supreme Court Finds Unlicensed Television Streaming Breaches Copyright

 
The United States Supreme Court has held that television streaming service Aereo Inc (Aereo) breached the Copyright Act (the Act): American Broadcasting Companies, Inc v Aereo, Inc 573 US __ (2014). Aereo transmitted television shows over the internet, allowing subscribers to watch and record live programs. Subscribers pay between USD 8 and USD 12 for the service, but broadcasters do not receive licensing fees from Aereo. Aereo had argued that its services did not breach copyright, as each customer’s transmissions were isolated, so therefore did not fall within the definition of a “public performance” as required under the Act. However, the Court held that Aereo’s performances were “public” and therefore it required consent from broadcasters to retransmit the programs, as they were transmitted to multiple paying customers and in that way operated similarly to the cable television system. The case was returned to the district court, which will determine whether to issue a preliminary injunction.

 

  • A link to the decision can be found here.

 

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For further information, please contact:

 

Gordon Hughes, Partner, Ashurst
[email protected]

 

Ashurst TMT Practice Profile in Australia

 

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