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The Global Legal Monitor is an online publication from the Law Library of Congress covering legal news and developments worldwide. It is updated frequently and draws on information from official national legal publications and reliable press sources. You can find previous news by searching the Global Legal Monitor.

Germany: Higher Regional Court Rules Agreement between Google and German Ministry of Health on “Knowledge Panels” Violates Competition Law

(Mar. 4, 2021) On February 10, the Higher Regional Court Munich I (Landgericht München I, LG München I) granted two applications for preliminary injunctions against the German Ministry of Health (Bundesministerium für Gesundheit, BMG) and Google Ireland, Ltd. (Google) requested by NetDoktor.de GmbH (NetDoktor). The court held that the agreement between the BMG and Google to prominently show “knowledge panels” populated with information from the National Health Portal of the BMG when people perform a Google search on diseases violates German competition law. Knowledge panels are “information boxes that appear on Google when you search for entities” and are meant to provide a “quick snapshot of information on a topic based on Google’s understanding of available content on the web.” They are placed next to or ahead of the other search results.

Facts of the Case

The applicant NetDoktor has been providing health information on its website for more than 20 years and is currently the number one market provider in Germany. The information presented fulfills scientific standards but explains it in an understandable way. The National Health Portal of the German Ministry of Health went online on September 1, 2020. The aim of the National Health Portal is to “provide quality-controlled, independent, and easily understandable health information online.” The applicant’s website generally shows up as the first or one of the first Google search results when people research health topics. The search engine from Google has a market share of around 90% in Germany. (LG München I, paras. 1–8.)

On November 10, 2020, Google and the BMG announced cooperation to make it easier for people to research health topics and find reliable information online. For that purpose, information from the National Health Portal is presented in a prominently displayed infobox (knowledge panel). A link inside the box allows the user to directly access the article on the National Heath Portal. The boxes appear either on the right-hand side next to the ads and the generic search results on a desktop or after the ads but before the generic search results on mobile applications. Currently, infoboxes are available for around 160 syndromes. Since the infoboxes have been introduced, general traffic to the website of the applicant has stayed constant; however, traffic for selected health terms and important keywords has declined. (Paras. 9–14.)

The applicant alleged that the cooperation between Google and the BMG violated competition law, in particular because the BMG did not act in an official capacity but as a private company. (Para. 17.)

Decision

The court granted the preliminary injunctions of the plaintiff. (Para. 63.) It agreed with the applicant and held that the BMG did not act in an official capacity and was therefore subject to competition law. Health portals have not always been, and must not necessarily be, operated by public entities, in the opinion of the court. It stated that the BMG had entered into an agreement with Google that resulted in a restriction of health-portal market competition. It explained that, because of the agreement, the best position to appear in search results—­the prominently displayed infobox—­was from the start not available to private providers of health portals. As a health portal operator, NetDoktor particularly depends on its search result visibility on Google, which has the biggest market share in Germany. Its visibility is severely limited by the infoboxes as they draw attention and distract users from the general search results. Most of the time, the infoboxes already satisfy the information needs of the users, in the opinion of the court. This leads to reduced user numbers, which could potentially lead to a loss in ad revenue numbers for NetDoktor. As a private provider, NetDoktor depends on this revenue to finance its portal, the court explained. (Paras. 73–96.)

The court further held that no exception to the general rules applied in this case. An exception may apply when the production or distribution of goods is improved or when technical or economic progress is promoted. Such agreements result in efficiency gains for the user—for example, reduced search efforts or improved health education. However, in this case, the court did not find that the advantages for the user outweighed the disadvantages, in particular as the agreement between Google and the BMG threatened to limit the diversity of opinion and media. (Paras. 89–109.)

The court did not rule on the general admissibility of the National Health Portal as this request was withdrawn by the applicant.

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International: Former Child Workers Sue Chocolate Companies Alleging Forced Labor in Cocoa Supply Chains

(Mar. 4, 2021) On February 12, 2021, the Washington, D.C.-based nongovernmental organization International Rights Advocates (IRAdvocates) filed a federal class action lawsuit on behalf of eight former child workers who allege they were trafficked from Mali and forced to harvest cocoa in Côte d’Ivoire beginning in 2011. The lawsuit accuses several multinational chocolate producers of aiding and abetting the illegal enslavement of children by purchasing cocoa from suppliers who used forced child labor.

While the lawsuit is primarily based on the U.S. Trafficking Victims Protection Reauthorization Act (TVPRA), 18 U.S.C.  § 1595 et. seq., it also relies on the Harkin-Engel Protocol, signed by the defendants 20 years ago in 2001. The protocol was a historically significant agreement to combat child slave labor in the cocoa industry, signed by the leaders of the cocoa industry, the International Labour Organization (ILO), and the international union representing the workers in the cocoa industry, the IUF. While explicitly acknowledging that cocoa beans should be grown and processed in a manner that complies with ILO Convention No. 182 on prohibiting and taking immediate action to eliminate the worst forms of child labor, the protocol also outlined an action plan for the cocoa industry. Côte d’Ivoire ratified Convention No. 182 in 2003, and the ILO Committee of Experts on the Application of Conventions (CEACR) has repeatedly noted its concern about the high number of children engaged in hazardous types of work in agriculture, including the cocoa sector.

The Harkin-Engel Protocol Action Plan and Deadlines

The 2001 protocol outlined a multistep action plan that included

  • a public acknowledgment of the problem of forced child labor in West Africa;
  • the formation of a multisectoral advisory group to investigate labor practices in West Africa, including the formulation of appropriate remedies;
  • a joint statement on child labor, to be signed at the ILO;
  • a binding memorandum of cooperation;
  • the establishment of a joint international foundation to oversee and sustain efforts to eliminate the worst forms of child labor in the growing and processing of cocoa beans; and
  • a commitment that by July 1, 2005, the industry would develop standards of public certification that cocoa beans were not grown and/or processed with any of the worst forms of child labor.

However, the protocol’s action plan targets were missed, repeatedly postponed, and adjusted in 2005, 2008, and 2010. The revised 2010 target to reduce child labor in the cocoa sector in West Africa by 70% by 2020 was also missed. According to a 2020 study by the National Opinion Research Center (NORC) at the University of Chicago, the use of child labor in the cocoa sector in West Africa has actually increased over the period.

Regional Agreements to Eliminate the Worst Forms of Child Labor

In addition to ILO Convention No. 182 and the Harkin-Engel Protocol, there are also regional efforts to eliminate the worst forms of child labor in West Africa. For example, the Economic Community of West African States (ECOWAS) has adopted a regional action plan to meet United Nations Sustainable Development Goal 8.7 to end all forms of child labor by 2025, and forced labor, trafficking, and modern slavery by 2030. Furthermore, article 15 of the African Charter on the Rights and Welfare of the Child provides that “every child shall be protected from all forms of economic exploitation and from performing any work that is likely to be hazardous.”

The former child workers’ lawsuit follows the December 2020 oral arguments in the U.S. Supreme Court in the consolidated case of Nestlé USA, Inc. v. Doe I and Cargill Inc. v. Doe I, which also concerned alleged child slavery, forced labor, and trafficking in the cocoa industry. However, the Nestlé and Cargill case is focused on whether the Alien Tort Statute (ATS), 28 U.S.C. § 1350—which allows foreigners to bring lawsuits in U.S. courts for serious violations of international law—applies to U.S. corporations or to alleged violations that occurred outside the U.S. While a decision in the Nestlé and Cargill case is expected this summer, Chief Justice John Roberts noted in oral arguments that Congress had enacted TVPRA to address international law violations such as this, and that the ATS may not apply.

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Switzerland: New Amending Law Adapts Several Acts to Developments in Distributed Ledger Technology

(Mar. 3, 2021) On February 1, 2021, some parts of the Act to Adapt Federal Law to Developments in Distributed Ledger Technology (DLT Act) (Bundesgesetz zur Anpassung des Bundesrechts an Entwicklungen der Technik verteilter elektronischer Register), an omnibus bill, entered into force. (DLT Act at 21.) The amendments to several civil and financial market laws enable the introduction of ledger-based securities that are represented on a blockchain. In particular, the amendments establish a legal basis for the trading of rights through electronic registers, provide rules for the segregation of crypto-based assets in the event of bankruptcy, and add a new license category for distributed ledger technologies (DLT) trading systems.

For the remaining parts of the DLT Act that are not yet in force, implementing ordinances are needed. The public consultation on the draft omnibus ordinance (Mantelverordung) ran from October 19, 2020, to February 2, 2021. The remaining provisions are slated to enter into force on August 1, 2021.

The DLT Act addresses open questions that were highlighted in a December 2018 report from the Swiss Federal Council (the Swiss government) titled the Legal Framework for Distributed Ledger Technology and Blockchain in Switzerland.

Content of the DLT Act

Trading of Rights through Electronic Registers

Tokens in the form of cryptocurrencies are classified as intangible assets under Swiss civil law. Civil law does not provide any specific requirements for or obstacles to the transfer of tokens that represent a value such as cryptocurrencies. However, to improve legal certainty, the DLT Act regulates the transfer of rights on the blockchain by means of digital registers. It introduces a new category of ledger-based securities (Registerwertrecht) in the Code of Obligations (Obligationenrecht, OR). (OR art. 622, para. 1; art. 973d.) The wording of the provision is technology-neutral and does not mention the term DLT, but describes its characteristics instead. The technical details for the digital register are not regulated either; the law provides only a basic framework. (Message Regarding the DLT Act at 259.)

A ledger-based security is defined as a right that, according to an agreement of the parties, is registered in a ledger-based security register and can be asserted and transferred only via this register. (OR art. 973d, para. 1.) The ledger-based security register must fulfill the following requirements:

  1. It gives creditors, but not the debtor, power of disposal over their assets by means of a technical process.
  2. Its integrity is protected through appropriate technical and organizational measures to prevent unauthorized modifications, such as joint management by several participants that are independent of each other.
  3. The content of the rights, the functioning of the register, and the register agreement are recorded in the register or in the accompanying data.
  4. Creditors may access information and register entries that concern them, and may test the integrity of the register entry that concerns them without the help of third parties. (Id. art. 973d, para. 2.)

Debtors of ledger-based securities are obligated and allowed to render performance only to a creditor whose name is registered in the ledger-based security register. (Id. art. 973e, para. 1.) A bona fide purchaser may rely on the content of the register (protection of good faith). (Id. art. 973e, para. 3.) The transfer of the ledger-based security is subject to the terms of the registry agreement. (Id. art. 973f, para. 1.) Debtors of ledger-based securities are obligated to provide information on the content of the ledger-based right and the functioning and integrity of the ledger-based security register to potential purchasers. They are liable for any damages incurred due to incorrect or misleading information or information that does not fulfill the legal requirements. Agreements that exclude or limit their liability are void. (Id. art. 973i.)

Segregation of Crypto-based Assets in the Event of Bankruptcy

The DLT Act introduces special provisions for the treatment of crypto-based assets in bankruptcy proceedings. Crypto-assets will be segregated when the custodian has exclusive actual power of disposal over the crypto-assets. The claim is justified when the debtor is obligated to have the assets readily available for a third party and they can be assigned to that third party, or when the assets can be assigned to several people and it is evident which share of the community assets belongs to the third party. (Federal Act on Debt Collection and Bankruptcy art. 242a, as amended by the DLT Act.)

An additional legal provision is introduced to provide for the segregation of data in the bankruptcy estate to which the beneficiary is able to demonstrate a special entitlement. (Id. art. 242b.) An example would be data of a company that is stored with a cloud provider. (Message Regarding the DLT Act at 266.)

New License Category for DLT Trading Systems

The Financial Market Infrastructure Act (FinMIA) adds DLT trading systems to the list of financial market infrastructures. In addition, ledger-based securities are included in the definition of “securities,” and “DLT securities” are added as a new category. (FinMIA art. 2, letter a, no. 5a, art. 2, letters b, bbis, as amended.) Financial market infrastructures require authorization from the Swiss Financial Market Supervisory Authority (FINMA) before they can commence operations. (Id. art. 4, para. 1.) A DLT trading system is defined as “an institution for multilateral trading of DLT securities whose purpose is the simultaneous exchange of bids between several participants and the conclusion of contracts based on non-discretionary rules and which fulfills at least one of the following requirements:

  1. Participants are admitted according to article 73c, paragraph 1, letter e.
  2. It is an entity for the central custody of DLT securities based on uniform rules and procedures.
  3. It clears and settles transactions in DLT securities based on uniform rules and procedures.” (Id. art. 73a, as amended.)

Small DLT trading systems, meaning those that pose only a low risk to financial stability and to financial market participants, may be exempted from some of the regulatory requirements. The Swiss Federal Council is authorized to determine threshold values. (Id. art. 73f, as amended.)

Other Amendments

 In addition, the DLT Act provides several amendments that became necessary to add to other laws due to the topics regulated in the DLT Act. The Banking Act is amended to expand the existing Fintech license and to introduce consequential changes due to the new bankruptcy provisions. (Banking Act art. 1b, paras. 1 & 4(d), art. 4sexies; art. 16, para. 1bis; art. 37d, as amended.) The Financial Services Act (FinSA) is amended to include ledger-based securities in the definition of “securities.” (FinSA art. 2, letter b, as amended.) The Swiss National Bank will supervise systemically important DLT trading systems. (National Bank Act art. 19, para. 1, as amended.) DLT trading systems are included in the definition of “financial intermediaries” and must therefore abide by the anti-money laundering rules. (Anti-Money Laundering Act art. 2, para. 2, letter dbis–dquater, as amended.)

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Pakistan: Supreme Court Bars Use of Death Penalty for Inmates with Serious Mental Illness

(Mar. 3, 2021) On February 10, 2021, a five-member bench of the Supreme Court of Pakistan in a landmark judgment barred the use of the death penalty for inmates with serious mental illness or disorders who are “unable to comprehend the rationale behind their execution.”

Background

The apex court was hearing three appeals from prisoners on death row—Kanizan Bibi, Imdad Ali, and Ghulam Abbas—who are suffering from schizophrenia. Kanizan Bibi was sentenced to death in 1991 for the crime of murder by a sessions court, and several of her appeals and petitions were dismissed by the president of Pakistan, the Lahore High Court and the Supreme Court. On December 2, 2010, the Supreme Court rejected an appeal of the Lahore High Court’s dismissal of her petition to convert her death sentence to life imprisonment on the grounds of mental ailment, but subsequently “her execution was stayed for three weeks by the President of Pakistan and she was referred to Punjab Institute of Mental Health (PIMH), where she was found to be suffering from schizophrenia.” The current appeal arose after the chief justice received a report submitted by the superintendent of the Central Jail, Lahore and “took suo motu notice” of her case. Her appeal was conjoined with the appeals of Imdad Ali and Ghulam Abbas. Ali, who was sentenced to death for committing murder in 2002, has been on death row for 18 years. Ali’s previous appeals and petitions, including a petition to examine his mental health condition, were also rejected by the president of Pakistan, the Lahore High Court, and the Supreme Court. The current petitions, filed by his wife and the inspector general of prisons of the province of Punjab, include a call for a review of a 2016 judgment of the Supreme Court denying a delay in carrying out the death sentence imposed on Ali. In its decision, the court commuted the sentences of Kanizan and Imdad, while directing the prison officials to file a fresh mercy petition for Ghulam Abbas, to be taken up by the president of Pakistan, because there was “nothing on record to show whether the ground of mental illness was taken into consideration while dismissing [the previous mercy petition].” Both Kanizan and Imdad are to be moved to a “government-run mental health facility.”

A 2019 Amnesty International report cites a report submitted by the Federal Ombudsman of Pakistan to the Supreme Court which states that 4,225 people were under sentence of death in the country as of July 2019. The government had imposed a moratorium on the death penalty from 2008 to 2014. According to Reuters, “[s]ome 518 people have been executed in Pakistan since 2014 when the government lifted [the] moratorium on capital punishment.”

Holding and Recommendations of the Court

The court held that “if a condemned prisoner, due to mental illness, is found to be unable to comprehend the rationale and reason behind his/her punishment, then carrying out the death sentence will not meet the ends of justice.”(Judgment ¶ 66.) However, the court also added that not every mental illness would automatically qualify for an exemption from carrying out the sentence. According to the court,

[t]his exemption will be applicable only in that case where a Medical Board consisting of mental health professionals, certifies after a thorough examination and evaluation that the condemned prisoner no longer has the higher mental functions to appreciate the rationale and reasons behind the sentence of death awarded to him/her. To determine whether a condemned prisoner suffers from such a mental illness, the Federal Government (for Islamabad Capital Territory) and each Provincial Government shall constitute and notify, a Medical Board comprising of qualified Psychiatrists and Psychologists from public sector hospitals.

In paragraph 87 of the judgment, the court also laid out a set of recommendations and directives for reform that included establishing a “High Security Forensic Mental Health Facilities in teaching and training institutions of mental health for assessment, [and] treatment and rehabilitation of under trial prisoners and convicts who have developed mental ailments during their incarceration.” In the same paragraph, the court also directed the federal and provincial governments to immediately constitute medical boards “comprising of three qualified and experienced Psychiatrists and two Psychologists from public sector hospitals for examination and evaluation of the condemned prisoners who are on death row and are suffering from mental illness to ensure that such mentally ill condemned prisoners who no longer have the higher mental functions to appreciate the rationale and reasons behind the sentence of death awarded to them are not executed.”

In paragraph 37, the court also recognized the need to avoid using “stigmatic labels such as ‘unsound mind,’ ‘lunatic,’ and ‘insane’” in laws and rules, and directed that such terms occurring in the Pakistan Penal Code, the Criminal Procedure Code, and the Prison Rules should be replaced by the terms “mental disorder” or “mental illness.”  One of the directives was to amend the relevant laws and rules in the light of observations given in the judgment.

Reactions to the Decision

The Human Rights Commission of Pakistan and other organizations in a joint statement praised the court’s decision to protect severely mentally ill people in the criminal justice system from receiving capital punishment, asserting that “[t]his historic judgment will benefit many people, having a significant impact on marginalised communities who suffer at the hands of a criminal justice system with few protections in place for the vulnerable.” Sarah Belal, executive director of Justice Project Pakistan, also said in a statement that “[t]his is a historic judgment that validates our decade-long struggle to get the courts to recognise mental illness as a mitigating circumstance against the imposition of the death penalty. We are grateful to all the honourable judges on the bench for affirming the rights of the most vulnerable prisoners through explicit recognition of domestic safeguards and international human rights principles.”

Al Jazeera reported Amnesty South Asia Campaigner Rimmel Mohydin’s statement that “[t]his historic precedent puts a stop to the execution of other prisoners with similar conditions, many of whom have yet to be diagnosed. However, ultimately the death penalty itself must be abolished, and we urge Pakistan to re-establish an official moratorium on all executions as a first step in that direction.” U.N. human rights experts also welcomed the decision and called for the government “to build on the Supreme Court’s crucial decision and to revisit the death penalty more generally . . . [and] ensure that the death penalty is never carried out against individuals who were children at the time of the offence[;] that, in other situations, it is strictly limited to cases involving intentional killing, in line with international standards[;] and that under no circumstances should it be applied to allegations of blasphemy.”

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Brazil: Chamber of Deputies Approves Autonomy of Brazilian Central Bank

(Mar. 2, 2021) On February 10, 2021, the Brazilian Chamber of Deputies approved Draft Law No. 19/2019, which grants autonomy to the Brazilian Central Bank (Banco Central do Brasil). The law defines the period for the mandates of the president and directors of the Central Bank, which must not coincide with that of the president of the republic. As the proposal originated in the Federal Senate, it will now be sent for presidential approval.

The law characterizes the Central Bank as an autarchy of a special nature with no ties, tutelage, or hierarchical subordination to any ministry, guaranteeing technical, operational, administrative and financial autonomy. According to the law, the bank’s main objective will continue to be ensuring price stability, but it must also ensure the stability and efficiency of the financial system, smooth out fluctuations in the level of economic activity, and promote full employment.

The law provides that the terms of office of the bank’s president and directors will be four years and that their terms will be staggered such that the president of the republic will appoint the majority of the board and the president of the bank only in the third year of a presidential term. Appointments of the bank president and directors of the bank will continue to depend on Senate confirmation.

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