This Week’s Techlaw News Round-Up

May 19, 2023

UK law

More amendments proposed for the Online Safety Bill

The UK government has published a press release stating that additions to the Online Safety Bill will make it a crime to encourage someone to cause serious self-harm, regardless of whether or not victims go on to injure themselves and those convicted face up to 5 years in prison. The new offence will add to existing laws which make it illegal to encourage or assist someone to take their own life. Police or prosecutors will only have to prove communication was intended to encourage or assist serious self-harm amounting to grievous bodily harm. This could include serious injuries such as broken bones or permanent physical scarring. The offence will apply even where the perpetrator does not know the person they are targeting. This aims to end trolling that risks serious self-harm or life-changing injuries. Encouraging someone to starve themselves
or not take prescribed medication will also be covered. The new offence will be created following a recommendation from the Law Commission in 2021. The Online Safety Bill is
currently passing through the House of Lords and is at Committee stage.

Artificial Intelligence (Regulation and Workers’ Rights) Bill proposed

An Artificial Intelligence (Regulation and Workers’ Rights) Bill has been proposed. It is a private member’s Bill, so is unlikely to become law unless supported by the UK government. However, private members’ Bills often help to direct policy, so it will be interesting to follow developments in this area. The Bill would regulate the use of artificial intelligence technologies in the workplace and would make provision about workers’ and trade union rights in relation to the use of artificial intelligence technologies. Second reading is scheduled to take place on Friday 24 November 2023.

CMA issues further update on the Competition Appeal Tribunal mobile gaming/cloud
browser judgment and subsequent order

The CMA has published an update on its mobile gaming and cloud browser investigation. It states that on 20 April 2023, the CAT made an order setting out the consequences for the market investigation and the obligations on the CMA flowing from the CAT’s judgment. The order can be found on the CAT’s website. The order suspends the 18-month period the CMA has to prepare and publish its report on the market investigation, with effect from 31 March 2023 and preserves the current position in the market investigation until the CMA’s appeal, if permitted, is determined. The CMA will not progress the market investigation during this time. Market participants are also not be required to take any steps in relation to the market investigation. On 13 April 2023, the CMA requested permission to appeal from the CAT in relation to the CAT’s judgment of 31 March 2023.

ASA issues annual report

The Advertising Standards Authority has issued its annual
. It has now been regulating advertising for sixty years. The report sets out how its system has evolved to cover online advertising and respond to societal changes. It has also included case studies about how it uses AI and machine learning to help it regulate proactively, tackling key issues including crypto ads, greenwashing, unlabelled influencer ads, targeting of children and more. Its compliance team increased enforcement in some key areas of concern, including cryptocurrencies, cosmetic procedures, e-cigarette promotions and debt management. Influencer cases increased by 11%, and made up just over 25% of all online cases. Cases about claims on advertisers’ own social media, website or app declined by 2%, and made up over 40% of all online complaints.

UK government publishes semi-conductor strategy

The UK government has published its long-delayed semi-conductor strategy, in which it says it will invest £1 billion in semi-conductors (which according to the Times, is substantially less than other countries are investing). The strategy focuses on three areas: growing the domestic sector, mitigating
the risk of supply chain disruptions, and protecting the UK’s national security, including using its powers under the National Security and Investment Act.

ICO fines two businesses £180,000 for making unlawful marketing calls

The ICO has issued fines totalling £180,000 for two companies that made more than 480,000 unlawful marketing calls to businesses signed up with the Corporate Preference
Service. The ICO’s investigation found that Ice Telecommunications Ltd, Crewe and UK Direct Business Solutions Limited, Sunderland made repeated and
persistent calls to businesses, with some calls described as rude and argumentative. The ICO received more than 120 complaints about the two companies, which had also continued to make calls despite repeated warnings.

Ofcom opens investigation into Secure Live Media Ltd

Ofcom has opened an investigation into Secure Live Media Ltd (SLM), in respect of the video-sharing platform service CamSoda and SLM’s compliance with its statutory obligations as the provider of a VSP service under Part 4B of the Communications Act 2003. Part 4B of the Act came into force on 1 November 2020 and sets out the statutory
framework for the regulation of VSPs. In particular: since 6 April 2021, persons providing a VSP service have been obliged to notify Ofcom of their
intention to provide (or continue to provide) the VSP service; and a person who provides a VSP service must, in relation to that service, take such of the measures set out in Schedule 15A of the Act as are appropriate for (among other
things) the purpose of protecting persons under the age of 18 from videos containing restricted material. In January 2023, Ofcom opened an enforcement programme into age assurance measures on UK-established adult VSPs. It carried
out an initial assessment into CamSoda, and has reason to believe that: SLM is the provider of CamSoda, which is a VSP service within the scope of Part 4B of
the Act and has not been notified to Ofcom; CamSoda hosts material that would fall within the definition of ‘restricted material’; and SLM may not have taken and implemented such of the measures set out in Schedule 15A of the
Communications Act 2003 in relation to the service as are appropriate for the purposes of protecting under 18s from videos containing restricted material. The investigation will examine these questions further to determine whether SLM has contravened or is contravening sections 368V and/or 368Z1 of the Act. Ofcom will gather further information and intends to publish an update by the end of October 2023.

EU law

New tax transparency rules agreed for cryptoassets

The European Commission has welcomed the political agreement (general approach) reached by EU Finance Ministers on new tax transparency rules for all service providers facilitating transactions in crypto-assets for customers resident in the EU. The rules complement the Markets in Crypto-assets (MiCA) Regulation and Transfer in funds Regulation
(TFR) and are consistent with the OECD initiative on the Crypto-Asset Reporting Framework. The Directive aims to improve member states’ ability to detect and counter tax fraud, tax evasion and tax avoidance, by requiring all crypto-asset
providers based in the EU – irrespective of their size – to report transactions of clients residing in the EU. Moreover, the updated Directive has been extended in scope to include reporting obligations of financial institutions regarding e-money and central bank digital currencies and the automatic
exchange of information on advance cross-border rulings used by natural persons. The new reporting requirements on crypto-assets, e-money and central
bank digital currencies will enter into force on 1 January 2026. Final adoption of the new rules will be possible when the consultative opinion of the European Parliament becomes available.

MEPs raise doubts on granting adequacy decision for EU-US Data Privacy Framework

The European Parliament has adopted a resolution which challenges the adequacy of the EU-US Data Privacy Framework
as a mechanism for safeguarding personal data transferred from the EU to the US, and calls for further negotiations to ensure the Framework will deliver the adequate level of protection required by the EU GDPR.

IAB publishes new Transparency and Consent Framework

The IAB has published a updated version of the Transparency and Consent Framework. It contains further standardisation of the information and choices that should be
provided to users over the processing of their personal data, and to how these choices should be captured, communicated, and respected. The new Framework is necessary due to changes in case law and regulatory guidance. The IAB says that
it aims to better meet the expectations of regulators and needs of end-users. The IAB has also published a blog
on the new framework, setting out how organisations should prepare.

EDPB adopts final version of Guidelines on facial recognition technology in the area of law enforcement

public consultation, the EDPB has adopted a final version of its Guidelines on facial recognition technology in the area
of law enforcement. The guidelines provide guidance to EU and national
lawmakers, as well as to law enforcement authorities, on implementing and using
facial recognition technology systems. Among other things, the guidelines
stress that facial recognition tools should only be used in strict compliance
with the Law Enforcement Directive. Moreover, such tools should only be used if
necessary and proportionate, as set out in the Charter of Fundamental Rights.
In the guidelines, the EDPB repeats its call for a ban on the use of facial
recognition technology in certain cases, as it had requested in the EDPB-EDPS
joint opinion on the proposed AI Act.

Commission publishes European Media Industry Outlook

European Commission has published its European
Media Industry Outlook
, analysing trends in the
audiovisual, video game and news media industries. It provides market data and
identifies challenges and underlying technological trends common to the media
industries. Among other findings, it stresses the structural impact of the
ongoing shift in media consumption in favour of digital players. According to
the report, growth is mostly driven by segments such as video on demand, mobile
gaming or immersive content. The report also highlights the relevance of
strategic assets such as intellectual property rights for media companies. It
also stresses that an early yet wise uptake of innovative technologies and
techniques (eg AI virtual production) is fundamental to adapt, to open up new
markets and to become more competitive. Moreover, audience driven strategies
should serve as a basis to build successful business models.

of Justice of the European Union rules on the interpretation of the Consumer
Rights Directive

Court of Justice of the European Union has issued its decision in Case
C-97/22 DC v HJ
. It confirmed that the
Consumer Rights Directive (2011/83/EU) exempts a consumer from any obligation
to pay for performance provided under an off-premises contract, where the
trader concerned did not provide the consumer with the information required by Article
14(4)(a)(i) of the Directive and that consumer exercised their right of
withdrawal after the performance of that contract. The CJEU rejected the
argument that the trader should be compensated because the consumer has been
unjustly enriched.

Commission proposes changes to the EU Customs Union

European Commission has adopted proposals
to reform the EU Customs Union. It includes a Communication and proposals for
three regulations amending the Union Custom Code and a directive amending
related EU VAT legislation. The area which will be of most interest to SCL
members will be those on e-commerce. The proposals will require online
platforms to ensure that goods sold online into the EU comply with all customs
obligations. This is a major departure from the current customs system, which
puts the responsibility on the individual consumer and carriers. Platforms will
be responsible for ensuring that customs duties and VAT are paid at purchase,
so consumers will no longer be hit with hidden charges or unexpected paperwork
when the parcel arrives. At the same time, the reform abolishes the current
threshold whereby goods valued at less than €150
are exempt from customs duty. The reform also simplifies customs duty
calculation for the most common low-value goods bought from outside the EU.

publishes action plan for deployment of AI systems

French data protection authority CNIL has published an action
on AI. The plan aims to
guide the development of generative AI. It has four key strands: to understand
the functioning of AI systems and their impact on people; enabling and guiding
the development of privacy-friendly AI; federate and support innovative players
in the AI ecosystem in France and Europe; audit and control AI systems and
protect people. The work also aims to prepare for the draft European AI Act.