This Week’s Techlaw News Round-Up

August 4, 2023

UK law

Platform Operators (Due Diligence and Reporting Requirements) Regulations 2023 made

The Platform Operators (Due Diligence and Reporting Requirements) Regulations 2023 (SI 2023/817) have been made. They come into force on 1 January 2024. They implement the OECD (2020), Model Rules for Reporting by Platform Operators with respect to Sellers in the Sharing and Gig Economy, OECD, Paris and the OECD (2021), Model Reporting Rules for Digital Platforms: Optional Module for Sale of Goods, OECD, Paris. They impose obligations on certain persons who operate digital platforms (reporting platform operators). Reporting platform operators are required to carry out due diligence on users of their platform (sellers), to report information about the sellers to HMRC and to provide a copy of the information to the sellers themselves.

Court of Appeal dismisses appeal in Bitcoin case but upholds appeal in related proceedings

The High Court had previously ruled that tweets that alleged that a computer scientists’ claim to have invented Bitcoin was fraudulent had caused serious harm to the scientist’s reputation. However, the scientist had presented deliberately false arguments about how serious the harm was. Therefore, the courts said that an award for more than nominal damages would be unfair. The scientists appealed. The Court of Appeal has now issued its decision in Wright v McCormack [2023] EWCA Civ 892. It said that the first instance judge had taken account of the claimant’s lies and his attempt to deceive the court as part of the process of ascertaining the claimant’s entitlement, namely a sum in damages that would be proportionate to the aims of compensating and appropriately vindicating the relevant aspect of the claimant’s reputation. In this case, where the libel was an accusation of dishonesty, the dishonest conduct of the litigation was relevant for that purpose. This follows from the particular nature of the interest protected by the law of defamation. Therefore, the Court of Appeal dismissed the claim.

In related proceedings (Wright & Ors v BTC Core & Ors [Rev1] [2023] EWCA Civ 868) the claimant had been seeking permission to serve a claim outside of the jurisdiction, and so has had to demonstrate that there was a serious issue to be tried. The High Court had previously ruled that there was no serious issue to be tried about whether copyright subsists in the Bitcoin file format was not fixed. The Court of Appeal has now overturned that decision. It said that the claimant had a real prosect of successfully establishing that the fixation requirement is satisfied and so allowed the appeal.

High Court rules in Twitter defamation case

The High Court has issued its ruling in the case of Davidoff & Ors v Hargrave [2023] EWHC 1825 (KB). The four claimants brought defamation proceedings in relation to: (a) the defendant’s quote-tweet of 7 May 2022, in which he commented on a tweet; and (b) the defendant’s post that was published on 9 June 2022 below an article in The Negotiator from 11 May 2022 headlines “Two estate agents apologise in court over online reviews about employer”. The court concluded that the parties were not permitted to adduce evidence regarding the defendant’s followers in relation to the question of whether the hypothetical reasonable reader would click on the hyperlink in the 7 May 2022 Tweet. The court also considered that the pleading of the reference innuendos relied upon by the claimants were defective, although it said that the claimant should be able to amend the pleading.

CMA consults on “change of circumstances” in Microsoft-Activision merger

As SCL readers will be aware, the CMA has controversially banned the merger of Microsoft and Activision. It has now stated that Microsoft has made a series of submissions to the CMA about developments since the publication of the CMA’s report on the transaction, including the acceptance by the European Commission of commitments offered by Microsoft and an agreement recently entered into between Microsoft and Sony. These submissions state that there has been a material change of circumstances since the CMA’s decision. It is not a usual part of the CMA’s process during a remedies implementation period to consult on submissions received in response to a consultation on a proposed undertaking or order. However, in light of the guidance provided by the Competition Appeal Tribunal on this specific case, it has decided it is appropriate to do so in this case. The CMA is asking for submissions about the notice by 4 August 2023. It will then consider submissions when making its final decision on remedial action. The statutory period for the CMA either to accept final undertakings or make a final order ends on 29 August 2023.

ICO issues reprimand for use of WhatsApp by medical staff

The ICO has issued a reprimand to NHS Lanarkshire, following staff’s unauthorised use of WhatsApp to share patients’ personal data over the court of two years. Between April 2023 and April 2022, 26 staff at NHS Lanarkshire had access to a WhatsApp group where patient data was entered on more than 500 occasions, including names, phone numbers and addresses. Images, videos and screenshots, which included clinical information, were also shared. While it was only made available for communicating basic information at the start of the pandemic, WhatsApp was not approved by NHS Lanarkshire for processing patient data and was adopted by these staff without the organisation’s knowledge. A non-staff member was also added to the WhatsApp group in error, resulting in the inappropriate disclosure of personal information to an unauthorised individual. NHS Lanarkshire did report the incident to the ICO once they became aware, but the ICO concluded that NHS Lanarkshire did not have the appropriate policies, clear guidance and processes in place when WhatsApp was made available to download. For example, there was no assessment of the potential risks relating to sharing patient data this way.

UK government consults on ban on cold calling for consumer financial services and products

As announced in the Fraud Strategy in May 2023, the government will extend the pensions cold calling ban to cover cold calling for all consumer financial services and products. The consultation explores how best to design and implement this ban to prevent scam calls from reaching the public, while allowing legitimate and beneficial communications from businesses to continue. The consultation also includes a call for evidence to collect information and data that will allow a more rigorous assessment of the impacts on businesses. The consultation ends on 27 September 2023.

EU law

European Commission launches consultation on template for the description of consumer profiling techniques

The European Commission is consulting on the template for the description of consumer profiling techniques and audit of such reports that designated gatekeepers will have to submit annually under Article 15 of the Digital Markets Act. Practice shows that gatekeepers collect and accumulate large amounts of data from end users, which makes it difficult for potential entrants and start-ups to compete with them. The Commission hopes that transparency will help to avoid deep consumer profiling becoming the de facto industry standard and will allow competitors to differentiate themselves through the use of superior privacy guarantees. It welcomes feedback on the minimum information listed in section 2 that gatekeepers should report on and provide to the Commission with the aim of meeting the objectives set out in recital 72 of the Digital Markets Act, including enhancing transparency and accountability regarding gatekeeper’s profiling techniques as well as facilitating fairness and contestability of their respective core platform services. The consultation ends on 15 September 2023.

European Parliament publishes draft report on addictive design of online services

The European Parliament Committee on the Internal Market and Consumer Protection has issued a draft report on addictive design of online services and consumer protection in the EU single market, which includes a motion for a Parliament resolution. The report also highlighted the harmful impact addictive online services had on people’s health and emphasised the urgent need to regulate addictive design of online services. The European Parliament is now calling on the European Commission to legislate against addictive design and urges the Commission to revise the Unfair Commercial Practices Directive Consumer Rights Directive and Unfair Contract Terms Directive to deal with these issues.

International law

IMF publishes report on digital tokens

The International Monetary Fund has published a report on digital tokens. It says that tokens are units digitally represented in a distributed ledger or blockchain. The various issues of this technology have the potential to transform a wide array of economic activities, from traditional commercial transactions to sophisticated financial undertakings. The paper explores the similarities and differences of tokens with traditional legal instruments in commercial law and how tokens could offer superior solutions, provided that proper legal foundations are established for their operation, including aspects of the law of securities and consumer protection law.