This Week’s Techlaw News Round-Up

June 9, 2023

UK law

High Court orders crypto exchanges to transfer assets into England and Wales

The High Court has issued a ruling in the case of Joseph Keen Shing Law v Persons Unknown and Huobi Global Limited. It granted an order requiring a cryptocurrency exchange to transfer a defendant’s cryptocurrency that was held outside England and Wales into the jurisdiction to help the claimant to enforce its judgment against those assets. The order required that the cryptocurrency had to be converted into fiat currency (currency not pegged to a commodity like gold) and then transferred to the Court Funds Office. The ruling was made in January 2023 but the decision has only just become available. Since then, the High Court has also ruled in Piroozzadeh v Persons Unknown Category A & Others [2023] EWCH 1024 (Ch). It discharged an interim proprietary injunction made against Binance for Tether deposited at the exchange. The judge criticised the claimant because they did not explain accurately how the Tether was held (in a pooled wallet) and because they did not explain how Binance would be able to freeze the Tether in practice.

UK government responds to Professor Dame Angela McLean’s recommendations

The UK government has published its response to the Pro-Innovation Regulation of Technologies Life Sciences Review, conducted by the Government Chief Scientific Adviser, Professor Dame Angela McLean. The government accepts all the recommendations in the report. The final report from the Review follows interim findings that were reflected in a letter from Sir Patrick Vallance to the Chancellor that was published on 15 March.

ICO fines two energy firms a combined £250,000 for making unlawful marketing calls

The ICO has fined two energy companies a total of £250,000 for making unlawful marketing calls to people and businesses on the TPS and CTPS. Maxen Power Supply Ltd and Crown Glazing Ltd both made unsolicited marketing calls to people and businesses while falsely claiming to represent other organisations, such as the National Grid, other energy suppliers or the UK government. The ICO has issued a £130,000 fine to Crown Glazing Ltd for making more than 500,000 direct marketing calls to people who had registered with the TPS at least 28 days prior, resulting in 37 complaints. Maxen Power Supply Ltd has been fined £120,000 after the ICO and TPS received more than 100 complaints about unsolicited marketing calls to businesses and people registered with the TPS and CTPS. Complaints indicated that people were receiving multiple calls on the same day, receiving repeated calls despite requests to opt-out, and were subject to ‘aggressive’ marketing tactics causing potential financial damage. The complaints also showed that Maxen Power Supply Ltd was making calls from overseas call centres that purported to be from National Grid or the recipient’s existing energy supplier. The firm claimed that it could help people save money on their energy bills by switching contracts, while asking for information about their current supplier and meter readings. The company denied responsibility for the complaints raised, claiming these international call centres were “independent contractors” and “third party intermediaries”. This cut no ice with the ICO.

ASA announces completion of Intermediary and Platform Principles Pilot year

The ASA and large companies in the digital advertising supply chain have now completed a pilot, which ran for one year from June 2022. The ASA collaborated with Adform, Amazon Ads, Google, Index Exchange, Magnite, Meta, Snap Inc., TikTok, Twitter and Yahoo. The pilot centred around six “Intermediary and Platform Principles” and aimed to explore putting on a more formal footing, and bringing consistency to the ways in which those companies cooperate with the ASA to promote advertisers’ awareness of the advertising rules online, and to help the ASA to secure compliance in cases where advertisers were unwilling or unable to stick to the rules. Under the pilot arrangements, participating companies agreed to volunteer information to the ASA to demonstrate how they operated in accordance with the Principles, with an understanding that different companies would be able to fulfil the Principles in differing ways. The ASA used that information, and other intelligence collected over the course of the pilot, to publish an interim report in December 2022, the purposes of which was to provide an independent, anonymised, aggregated account of how the participating companies were performing against the Principles up to that point. A final report will be published in Autumn 2023, reflecting on the full twelve months of the pilot.

TechUK publishes report on how the next government can use technology to build a better Britain

Teck UK has issued a plan for whoever forms the next government after the General Election to use technology to build a better Britain. It includes 18 points. Among other things, it suggests launching a new online safety sandbox to help deliver the aims of the Online Safety Bill, facilitate a new cross sector data and intelligence sharing initiative between the tech, telecoms and financial services industries and publish a “top five” priority list of smart data schemes to put consumers back in charge of their data. It also suggests enabling the criminal justice system to better leverage digital tools. An incoming government should also facilitate the uptake of new technologies such as AI and machine learning to deliver fintech services that speed up the delivery of a Centra Bank Digital Currency and shore up the fundamentals of the fintech system by delivering reforms on Digital ID and Smart Data.

Gambling Commission issues assessment of online games design changes

The Gambling Commission has issued a report assessing the changes made to online games design. The changes that were introduced included a limit on the speed of spins, a prohibition on features that speed up play or give an illusion of control over the outcome, a ban on autoplay and a ban on sounds or imagery which give the illusion of a win when the return is in fact equal to, or below, a stake. It also placed a requirement on operators to clearly display to the player their total losses or wins and time played during any online slots session. When monitoring gambling behaviours and attitudes after the changes were introduced; no increase in staking activity in response to the limit on spin speeds; and no evidence of a significant, negative impact on the enjoyment of gamblers. The report shows that despite a cap on the maximum spin speed, the proportion of stakes at the highest values decreased in the months following the changes and the proportion of sessions lasting in excess of an hour also decreased. General engagement with slots increased over the same time period. Additionally, survey responses found that reported gambling on multiple games or tabs, simultaneously decreased and did not detect any harmful unintended consequences.

EU law

CJEU rules on meaning of communication to the public by satellite in Satellite Broadcasting Directive

The Court of Justice of the European Union has ruled in the case of AKM (Fourniture de bouquets satellitaires en Autriche) Case C-290/21. It provided guidnace about how to interpret Article 1(2)(b) of the Satellite Broadcasting Directive (93/83/EEC). Article 1(2) defines the concept of “communication to the public by satellite” in the Directive. The ruling followed a referral by the Austrian courts. The CJEU ruled that Article 1(2)(b) meant that a satellite package provider must obtain the required authorisation of the holders of the copyright and related rights for the communication to the public by satellite only in the member state in which the programme-carrying signals were introduced into the chain of communication leading to the satellite.

European Commission consults on draft template for compliance report under EU DMA

The European Commission is consulting on a draft template for the compliance report that gatekeepers will have to submit under the Digital Markets Act. The consultation ends on 5 July 2023. The Commission will designate the gatekeepers under the DMA by 6 September 2023. Designated companies will then have six months to comply with the list of obligations and prohibitions in the DMA and subsequently issue a report demonstrating their effective compliance. They will also have to update the compliance reports annually.

European Commission welcomes provisional agreement on the modernisation of EU consumer rules for online financial services

The European Commission has welcomed the provisional agreement reached between the European Parliament and the Council on the updated Directive concerning financial services contracts concluded at a distance. As proposed by the Commission in May 2022, the Directive aims to amend the rules established back in 2002, strengthen consumer rights and foster the cross-border provision of financial services in the single market. Over the last 20 years, distance marketing of consumer financial services has changed rapidly. Financial providers and consumers have abandoned the fax machine and financial services are increasingly sold online. In addition, the impact of the COVID-19 pandemic and related lockdowns has accelerated the use of online shopping in general. The rules introduced in the Directive aim to serve as a safety net for the financial services that are not covered by sector specific legislation. They include actions ensuring that withdrawing from a contract is as easy as signing it, that any consumer can have the right to talk to a real person instead of a machine when the explanation provided via online tools like chatboxes is not clear enough, clear guidelines for providing information before signing a contract, and special rules to protect consumers from being manipulated,  when concluding financial services contracts online. As the next step, the European Parliament and the Council will now have to formally adopt the policitical agreement.

EDPB adopts final version of Guidelines on the calculation of administrative fines

The European Data Protection Board has adopted a final version of the Guidelines on the calculation of administrative fines. The guidelines aim to harmonise the methodology data protection authorities use to calculate fines and include harmonised “starting points”. Three elements are considered: the categorisation of infringements by nature, the seriousness of the infringement and the turnover of the business. The guidelines set out a five-step methodology, considering the number of instances of sanctionable conduct, possibly resulting in multiple infringements; the starting point for calculating the fine; aggravating or mitigating factors; legal maximums of fines; and the requirements of effectiveness, dissuasiveness and proportionality. Following public consultation, an annex was added with a reference table summarised the methodology and two examples of practical application.