Monthly Archives: September 2012

Engage with social media, businesses advised

I was quoted in The Star on 27 September 2012 over my presentation on “Damned if you do, damned if you don’t: Social media add a new dimension to online advertising, marketing and brand integrity”.

Engage with social media, businesses advised

KUALA LUMPUR: Businesses must engage with the social media to remain relevant, a conference heard.

Speaking at the International Malaysia Law Conference, Paul Subramaniam recommended that businesses have a social policy at work, including on staff posting disparaging remarks about the company, setting up a dedicated team to monitor social media sites and creating a rapid response team.

“Time is critical. One day is an eternity in social media,” he said at the “Damned if you do, damned if you don’t: Social media add a new dimension to online advertising, marketing and brand integrity” topic at the conference yesterday.

Businesses, he added, should also be prepared to have an external legal team in case of a crisis.

He noted that injunctions were necessary to get the message across and defend one’s rights, although they might not be very useful in social media.

“The laws are not ready. There is still a long way to go,” he said when referring to the redefinition of rights, privacy limitations and copyright issues online.

Another speaker, Alex Charlton, QC, urged caution when ticking the consent box on social media sites to ensure that one did not inadvertently agree to sharing data with the world.

Meanwhile, speaker Foong Cheng Leong stressed on the importance to constantly engage with customers and to respond to comments and not delete them.

“It is important to address complaints promptly and to reply with courtesy and good English. We cannot prevent social media but we can prepare for it and have a contingency plan,” he said.

Foong said consumers’ grievances vented online often sparked heated comments on social media sites.

Event: International Malaysia Law Conference 2012

I will be speaking at the International Malaysia Law Conference 2012 on 26 September 2012 on the topic “Damned if you do, damned if you don’t: Social media add a new dimension to online advertising, marketing and brand integrity“. The other speakers are:

1. Lau Kok Keng, Partner, Rajah & Tann LLP, Singapore,
2. Sharon Tan, Advocate & Solicitor, Zaid Ibrahim & Co
3. Alex Charlton QC, 4 Pump Court, London

The session will be moderated by Deepak C. Pillai, Advocate & Solicitor, Haryati Deepak.

For brochure of the event, please click here. As for the programme structure, please click here.

Amendment to the Malaysian Franchise Act 1998

The new Franchise (Amendment) Bill 2012 (“Bill“) was tabled in the Malaysian Parliament in June 2012. At the time of writing, the Bill is not in force. [Postscript: Franchise (Amendment) Act 2012 is in operation as of 1-1-2013 [P.U. (B) 387/2012]]

The Bill amends the Malaysian Franchise Act 1998 (“Act“) to ensure that the Act is consistent and up-to-date with current development of franchise business in Malaysia. It would further strengthen the Act for the purpose of proper administration and enforcement of franchise law in Malaysia.

The amendments amend the Act substantially. In brief, the amendment:-

(1) expands the scope of the law to cover franchise transaction which is concluded outside Malaysia and operated within Malaysia.

(2) introduces new offences and increases fines.

(3) introduces new power to the Registrar of Franchise (“Registrar”).

We will highlight some notable amendments to the Act.

1. Definition of Franchise

The amendment seeks to strengthen the definition of “franchise” by eliminating the elements of franchise which are not crucial to define franchise business. The word ‘franchise’ is now defined as:-

 “franchise” means a contract or an agreement, either expressed or implied, whether oral or written, between two or more persons by which—

(a) the franchisor grants to the franchisee the right to operate a business according to the franchise system as determined by the franchisor during a term to be determined by the franchisor;

(b) the franchisor grants to the franchisee the right to use a mark, or a trade secret, or any confidential information or intellectual property, owned by the franchisor or relating to the franchisor, and includes a situation where the franchisor, who is the registered user of, or is licensed by another person to use, any intellectual property, grants such right that he possesses to permit the franchisee to use the intellectual property;

(c) the franchisor possesses the right to administer continuous control during the franchise term over the franchisee’s business operations in accordance with the franchise system; and

(d) in return for the grant of rights, the franchisee may be required to pay a fee or other form of consideration.

2. Amendments to the Requirements for Registration of Franchise

Previously a franchisor is only required to register the franchise before they make an offer to sell it. With the new amendment, a franchisor must also register his franchise before he can operate a franchise business.

If the franchiser fails to do so, he commits an offence and shall, on conviction, be liable—

(a) if such person is a body corporate, to a fine not exceeding RM250,000, and for a second or subsequent offence, to a fine not exceeding RM500, 000; or

(b) if such person is not a body corporate, to a fine not exceeding RM100,000 or to imprisonment for a term not exceeding 1 year or to both,

and for a second or subsequent offence, to a fine not exceeding RM250,000 or to imprisonment for a term not exceeding 3 years or to both.

Further, the newly introduced Sections 6a and 6b will make it compulsory for any franchisee of a local franchisor or local master franchisee and any franchisee of a foreign franchisor to register with the Registrar before commencing the franchise business.

In addition, a franchisee who has been granted a franchise from a local franchisor or local master franchisee shall register the franchise with the Registrar within 14 days from the date of signing of the agreement between the franchisor and franchisee.

3. Power to the Registrar to cancel registration of franchise business

The Registrar may cancel the registration of the franchise from the register if he is satisfied that—

(a) the franchisor has failed to submit his annual report to the Registrar as stipulated under section 16 for the duration of five years continuously;

(b) the franchisor is insolvent; or

(c) the franchisor is no longer granting rights under the franchise.

4. Amendment to Disclosure Documents

Franchisors will be required to file an application to get approval from the Registrar if there are any material changes to the disclosure document. It is an offence is the franchisor fails to do so.

The scope of the compulsory practice to submit disclosure documents 10 days before the franchisee signs the franchise agreement is also expended.

Franchisors must submit to the franchisee any amendments to the disclosure documents 10 days before the franchisee signs the agreement with the franchisor or after the disclosure documents is approved by the Registrar, whichever is applicable.

5. Annual Report

Franchisor is now given more time to submit its annual report to the Registrar which is from 30 days from the anniversary date of the registration to 6 months from the end of each financial year of the franchise business. This is in tandem with the practice of companies regulated under Companies act 1965. It also seeks to make it an offence for any person who breaches this provision.

6. Payment of Franchise fee, etc

Section 19 of the Act is amended to further clarify the obligation of the franchisor to state in writing in the disclosure documents, in the event that the franchisor requires any payment from the franchisee before signing of the franchise agreement.

7. Prohibition against similar business

The scope of prohibition against similar business provided under the section 26 of the Act is widened to cover guarantee by a franchisee including its directors, spouses and immediate family of directors, and his employees to prohibit them from disclosing confidential information.

8. Conduct of parties

A new obligation is imposed in addition to the obligations in section 29 of the Act.

The franchisee shall operate the business separately from the franchisor, and the relationship of the franchisee with the franchisor shall not at anytime be regarded as a partnership, service contract or agency.

9. New termination rights

The new section 31 states that a franchisee cannot terminate a franchise agreement before the expiration date except for good cause. Previously such obligation only binds a franchisor.

“Good cause” now includes the ground of “bankrupt and insolvent”.

10. Extension of franchise term

The new section 34 imposes on the franchisee, at his option, apply for an extension of the franchise term by giving a written notice to the franchisor not less than six months prior to the expiration of the franchise term.

11. Offence of holding out as a franchise

Section 37a introduces the offence of holding out as a franchise.

A person who assumes or uses in relation to its business, the term “franchise” or any of its derivatives or any other words indicating the carrying on of a franchise business, including the use of the word “franchise” or any abbreviation thereof as part of the name or title in documents, agreements, books, advertisements or publications, without approval of registration by the Registrar commits an offence.

Such person shall, on conviction, be liable—

(a) if such person is a body corporate, to a fine not exceeding RM250,000, and for a second or subsequent offence, to a fine not exceeding RM500,000; or

(b) if such person is not a body corporate, to a fine not exceeding RM100,000 or to imprisonment for a term not exceeding 1 year or to both, and for a second or subsequent, offence to a fine not exceeding RM250,000 or to imprisonment for a term not exceeding 3 years or to both.

12. Increase in general penalty

The penalty for the offence where no penalty is expressly will be increased.

If such person is a body corporate, to a fine of not less than RM10, 000 and not more than RM50,000, and for a second or subsequent offence, to a fine of not less than RM20,000 and not more than RM100, 000.

If such person is not a body corporate, to a fine of not less than RM5, 000 and not more than RM25,000 or to imprisonment for a term not exceeding 6 months, and for a second or subsequent offence, to a fine of not less than RM10,000 and not more than RM50,000 or to imprisonment for a term not exceeding 1 year.

13. Increase in penalty for offence prescribed by Regulations

The maximum fine and imprisonment for contravention of regulations prescribed by the regulations made under the Act are increased to RM50,000 and 5 years respectively.

Download [Franchise (Amendment) Bill 2012]

Tweetjacked

This article appeared on Rage following my interview with The Star.

Tweetjacked

By KEVIN TAN and PHYLLIS HO

alltherage@thestar.com.my

ONE fine day, Chee Yun Sam, a 22-year-old model, started getting a barrage of angry tweets and messages from his friends.

Apparently, Chee had posted something rather racist on his Twitter account, and a lot of people weren’t taking too kindly to it.

Only problem was – and you guessed it – he had no idea what he had supposedly posted.

Chee had become a victim of “tweetjacking”, the popular new prank that’s making stuff like wedgies and the ol’ chalk-on-the-chair trick like SO last millennium.

What happened was a friend of Chee’s managed to get his hands on his smartphone, and used Chee’s Twitter account to post a joke.

That’s how most tweetjacks happen. You “hijack” someone’s Twitter account (or Facebook) and post something embarrassing, making it seem like it came straight from the account holder.

It’s usually innocent stuff, like confessions of love for a mutual friend (or Rebecca Black, which is equally embarrassing), or probably something gross like “I smell my socks every morning”.

But unfortunately for Chee, his friends didn’t just post some innocent joke.”It wasn’t a laughing matter at all,” he said. “My friend posted something that was quite racist. And people didn’t know I was being tweetjacked! Some of them took it really seriously and were very upset.”

While we at R.AGE always love a good, harmless prank (like the time we moved Sharmila Nair’s car to a different basement level. That sure taught her not to leave her keys lying around…), it seems tweetjacking, Facebook-jacking (which goes by a rather more unsavoury term on the Internet) and all kinds of social media-jacking can quite easily get out of hand.

And given how integral social media has become to so many of our lives and careers, your next tweetjack might not turn out to be so funny after all.

Protect yourself!

Denielle Leong, 18, has been Facebook and Twitter-jacked many times by her college buddies and even her boyfriend.

“Well on Facebook you’d normally see pretty disgusting stuff like ‘I like to lick my armpits’. Or sometimes it’ll be openly praising someone who is hot. It’s very different on Twitter, for some reason,” she said.

On Twitter, her account has been hijacked by her friends several times to post some flirtatious tweets, which obviously led to some rather awkward responses from her male friends.

“Some people really do retweet and buy everything they see, even the most random things. It just shows how people online are so gullible,” she said.

But probably the main reason why social media hijacking is becoming so common, is simply because the opportunities are everywhere now. An idle smartphone at a party, a Facebook account logged-on at the college library, an iPad that isn’t password protected… They’re all hijacks waiting to happen.

Despite having been hijacked so many times, Leong admits that she doesn’t always log off her accounts after using them on laptops and computers. She might be making herself a prime target for another prank, but she says she doesn’t mind – as long as it’s nothing harmful.

Lawyer Foong Cheng Leong, 31, the Kuala Lumpur Bar Council’s IT committee co-chairman, agrees that social media-jacking is actually “harmless”.

The problem is – as it is with all pranks – some people tend to go overboard, inadvertently posting things that are too sensitive, or sometimes even unlawful. “Publishes that are unlawful include posts that are deemed as defamatory, seditious, obscene, malicious – the breaking of the law in section 233 of Communication and Multimedia act,” said Foong.

Basically that means if you post something as part of a tweetjack that breaks those laws, you – and the friend whose account you jacked – could potentially face a fine of up to RM50,000, a jail sentence of up to one year, or both.

And with the recent amendments to the Evidence Act, Foong says that social media users should protect their accounts and monitor their publishes even more carefully. “Now, all the more young people have to be aware of their publishes, because every post will hold the publisher (account owner) accountable,” he said. “Only the account owners will be considered as the publisher until proved otherwise.

“That’s when tweet-jacking can be a problem – if the tweetjacker does not own up and admit that he or she is the person who published the (unlawful) post,” he added.

But even if you aren’t breaking the law, a social media hijacking can still do a lot of damage. Imagine for instance, if your employer stumbles upon a tasteless joke on your Facebook or Twitter account.

Joshua Desmond, 26, who, funnily enough, works as a social media planner in a digital advertising firm, was the victim of one particularly tasteless tweetjacking.

“I don’t get tweetjacked very often, but it happens from time to time,” said Desmond. “The tweets are normally just for laughs.”

But then one day, the stuff got real.

A friend used Desmond’s account to make a joke about his sexuality, which most of his followers understood to be a tweetjack. But there was one friend who didn’t get the joke, and decided to tell Desmond’s parents about it.

“My dad just rang me up one day and asked me about it, and he sounded very serious,” said Desmond. “I still remember how upset he was when he called me.

“Even after I convinced them it was only a prank, they were still upset and told me not to let it happen again. It wasn’t something funny to them at all.”

Password protection

Apart from the odd prank that gets really embarrassing, or the unlawful post that could get you in trouble with the law, social media hijacking could also put your personal safety at risk.

Foong advises people to keep personal information like house addresses, mobile phone numbers, and PIN numbers off social media, because if someone was able to hijack your account to make a silly joke, someone could also potentially access that information for something more malicious altogether.

In any case, it’s important to not only protect your smartphones and to always log out from your social media accounts, but also to make sure you have a safe password.

According to Foong, there is actually a rather common set of passwords which people tend to choose from.

“Many people use common passwords like ‘abc123’, and those passwords are easy to crack,” said Foong. “Believe it or not, the most common password in the world is ‘password’.”

Unfortunately, Sarenraj Rajendran, 22, an American Degree Programme student, had to learn that lesson the hard way.

One of Sarenraj’s friends somehow managed to guess his Facebook password, but that wasn’t such a big deal. Things turned ugly when he found out that Sarenraj used the same password for his Internet service account.

As a prank, the friend made all kinds of changes to his account settings, and even purchased some upgrades – additional email storage and an online anti-virus package. They were only 17 back then.

“I got to know about it when my ‘hijacker’ friend went around telling other friends, and even presented the proof of purchase to brag about what he had done.”

Social media expert David Lian, the Asia Pacific Digital Lead of PR agency Text 100, says the integration between all the different forms of social media makes these hijackings potentially much more damaging.

“These days, all your social networks are connected. Facebook, Foursquare, Instagram… Even your email addresses. If someone has access to one of your accounts, they could easily have access to all your accounts.

“They could even have access to credit card information on some of these applications,” said Lian.

The problem with us running this story, of course, is that people now know that “Tweet-jacking may not be dangerous if people know the limit. But at the end of the day, everyone should prevent themselves from the risk of the dangers of it. This really taught me to really be careful when it comes to protecting my personal social media. I can’t let things like that happen again,” said Chee.

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