Legal Aspects Case Study – M-trends Ltd
CSD4080 Coursework on Legal Aspects
Legal Consultancy Report – Clothing Retail Industry
You are hired as a consultant to give legal advice on the case study below. You are to produce a report not exceeding 6000 words (excluding references). Relevant legislation and case law from the UK/EU must be given to support your answers where appropriate. The whole coursework is worth 100 marks. Your report should contain a title page, table of contents, the section heading for each question as given below and a bibliography (sources and quotes used should be referenced – please cite references in the text). Use 1.5 spacing and font 12 (Times New Roman). ALL work MUST be your own. You are expected to do further research beyond the lecture notes. Avoid plagiarism. Do not copy and paste text from the Internet or other sources. Short passages and legislation can be quoted but they must be referenced. Any two or more coursework scripts having similar text may result in those scripts being cited for plagiarism (and given a fail grade for the whole module).
CASE STUDY
M-Trends Ltd is a research and consultancy firm specialising in business intelligence primarily focusing on marketing in the clothing retail industry. They employ data scientists and other experts and provide actionable information to help their clients (executives, managers and other corporate personnel) make informed marketing decisions based on analyses of big data. These analyses help their clients to determine where to place their marketing campaigns, whom to target, and how to best allocate their resources among other activities. M-Trends collects data from several sources including databases, databanks, consumer surveys and research organisations. Typically M-Trends submits monthly standardised market analysis reports (to their clients), but also provide consultancy reports based on specific requests from clients.
M-Trends regularly conducts surveys with members of the public to ask for information on their buying habits. The method of data collection is as follows: (a) Each interviewee is randomly approached and asked whether they would like to answer a survey on their buying habits in exchange for a discount voucher that can be redeemed at stores of various business partners; (b) if they agree they are then asked to provide the following information: name, residence area, gender, age range, ethnicity, sexual orientation, religion, profession and salary range; (c) then are asked to complete a survey questionnaire; and (d) finally on completion of the questionnaire they are given a discount voucher.
M-Trends uses the information obtained from the public for various types of analyses including market segment analysis, based on one or more of the following attributes: gender, age range, ethnicity, sexual orientation, religion profession, salary range. All information collected from the public is stored in a central database and is freely accessible to all analysts. To date, M-Trends have over five million survey records. In of July 2018 an M-Trends database was hacked resulting in thousands of records being compromised. The management team decided to keep this incident silent fearing bad publicity, then asked their data controller to make sure that the servers were safe. Recently a fired disgruntled employee Mr Keith Dawson told a friend about the hacking incident at M-Trends. Mr Dawson’s friend remembered taking part in a survey for M-Trends and recently immediately wrote to M-Trends to find out whether they were still using his data, for what purpose and to demand that they delete his data.
Among some of the databanks used by M-Trends is the UK Diamond Databank which contains historical and current statistical data on various industry sectors. M-Trends are authorised to use any data from the database in their analyses and to prepare reports. Analysts at M-Trends generally collect data from the Diamond Databank to aid in sales analyses and market forecasting among other activities. Typically, the data collected from the Diamond Database is analysed and used either on its own or combined with other data to produce charts and reports. In November 2017, in response requests from over 100 clients seeking information of fashion predictions for the summer of 2018, an analyst produced forecast reports for these clients primarily using data collected from the Diamond Databank. By the end of August 2018 none of the predictions were correct resulting in many clients losing revenue and terminating their ties with M-Trends. This also resulted in huge loses for M-Trends, who blamed the predictions on the incorrect data provided by Diamond Bank. Two weeks ago, Diamond Bank produced a report on a technical investigation which concluded that some of their data were corrupted due to technical failures in the databank at the time that it was accessed in November 2017. The Manager of M-Trends was particularly upset because before subscripting to the Diamond Databank the sales representative assured him that the Diamond Databank always provided the most accurate and up-to-date information. Further, recently access to the Diamond Databank was unavailable for three weeks due to adverse weather conditions which caused damage to the IT infrastructure of Diamond Databank.
A new young employee suggested to the management of M-Trends that they could consider harvesting data from Facebook to broaden and enhance their market analyses. Specifically, that they should try to access information to perform analyses on fashion trends and market segmentation by harvesting Facebook photos (of the owners of Facebook pages) along with other information such as age, gender, and location.
One of the main reports produced by M-Trend is a monthly report “M-Report” giving a multicity (London, Manchester, Birmingham and Edinburgh) analysis of the clothing retail industry. They are encrypted with a unique password for each subscriber and sent via email on the last Friday of every month. Each issue includes unique statistics, comparative graphs, charts, commentary and one section marked confidential information (detailing additional information of commercial value). The M-Report provides trends apparent from the entire month’s market activity. It contains information on the relative strength of the various markets, the kinds of items are in demand, specific trends in each city and buying patterns related to various criteria among other information. In addition to the confidential section the most important aspects of the reports are pieces of information (numbers) representing “buying power” of different market segments, “short term trends” and other market analyses calculated using confidential algorithms. To protect against disclosure of such valuable information (and other contents of the Reports) to non-subscribers, M-Trends limits subscriptions to individuals (someone at the managerial level) and encrypts the reports. M-Trends has never offered institutional subscriptions or group licenses. Every subscriber, moreover, must execute a subscription agreement that strictly prohibits unauthorized copying or dissemination of the M-Reports or their contents. Bernard Walcott, the marketing manager of a UK company ClothesRuS Ltd subscribes to the M-Report. Upon receiving the report, he prints a copy to read, and forward copies via email to members of his research team consisting of three staff so that they are aware of market news. He reads his printed copy at home before bedtime and makes notes after reading the report. Using facts contained in the report he prepares a report for the marketing staff of all 20 branches of ClotherRuS in the UK, which is circulated through a secure company intranet site.
QUESTIONS [100 marks]
In your answers you are expected to cite specific sections of any relevant legislation or authorities used. Limited short quotes of sections of laws can be made if necessary but students are not expected to quote whole sections of laws.
1. Discuss the legality of M-Trend’s method of collecting data from members of the public citing relevant legislation. In your answer citing appropriate authorities you should explain if anything was done incorrectly and advise on what should have been done. [12 marks]
2. Discuss the legality of M-Trend’s use of information gathered from members of the public for analyses citing relevant legislation. [8 marks]
3. In light of the information given in the case study, discuss any failings by M-Tends of their data protection obligations (other than issues discussed in in Questions 1 and 2) and advise them accordingly citing relevant legislation. [20 marks]
4. Advise M-Trends on the legality of the letter sent to them by Mr Dawson’s friend seeking to find out whether they were still using his data, for what purpose and to demand that they delete his data. They would also like to know whether they must comply with the request to delete data. [10 marks]
5. M-Trends has decided that it no longer wants to use the services of Diamond Bank and seeks legal advice. In light of Diamond Databank’s licence agreement (given with this assignment) and any other authority, advise M-Trends on the following:
- Who has ownership of the Intellectual property rights of any of the charts and reports prepared using data from Diamond Bank? Explain why.
- Can M-Trends sue Diamond Databank and claim damages for the corrupted data provided in light of the Licence terms?
- Can M-Trends sue Diamond Databank and claim damages for the corrupted data provided in light of the Licence terms in light of the assurances of the sales representative for Diamond Bank?
- Can M-Trends sue Diamond Databank and claim damages for not being able to access the database for three weeks?
- How must they formally end the contract with Databank?
- Are there any contractual responsibilities upon ending the contract? [24 marks]
6. Advise M-Trends Ltd on the legality of harvesting Facebook photos (of the owners of Facebook pages) along with other information such as age, gender, ethnicity and location. Briefly explain what is legally possible to access from Facebook and how. [6 marks]
7. Discuss the legality of the following below citing any possible breaches of existing laws.
- Bernard prints the M-Report to read at home.
- Bernard forwards the M-Report to his research team via email.
- Bernard uses facts from the M-Report to create a report for other branches of ClothesRuS. [20 marks]