SCL Conference Report: IT Law Hot Topics 2012

October 24, 2012

Roger Bickerstaff, Partner at Bird & Bird LLP, welcomed everyone to the sold-out conference at the Royal College of Surgeons in Lincolns Inn Fields, introducing the exciting programme to a packed house in an elegant venue.  The number of attendees was the highest ever for an SCL Annual Conference, which bodes well for SCL’s 40th anniversary year in 2013 when the Annual Conference will return to the same venue, but a larger room, on Tuesday 15 October 2013.

Cloud Computing

Professor Christopher Millard of Queen Mary, University of London spoke on trends in cloud computing and exploring why cloud computing is such a hot topic at the moment.  He talked of cloud computing being perceived as risky and potentially unreliable but said that industries had initially been wary of taking electricity from outside (generating their own electricity instead); within a few years everyone was buying from the grid and this might be reflected in the world of cloud computing.  He also talked about the Queen Mary project to analyse cloud computing contracts and the issues that arise, such as security and privacy, and whether providers will negotiate such contracts on a bespoke basis, as the perception is that they will not.  Another important point was that lawyers need to really understand the structure of the deals on which they advise, and from where services are being provided, for example, Dropbox uses Amazon’s infrastructure so there may be a chain of players in a particular deal.

After the morning coffee break, during which members took advantage of the opportunity to meet new contacts, Kit Burden of DLA Piper spoke on the Transition from Tower to the Cloud.  He set out to challenge perceptions that cloud computing contracts have to be different to other contracts and said that there was a holy trinity of important issues: service description, charges and service levels. He discussed the practical challenges and how to develop a cloud contracting strategy so that the company is in control. (He gave an example of where traders bought their own app on company credit cards and it did not have to go through the procurement department as it was under the company’s threshold and the CEO found out through a chance meeting at a conference).

Big Data

Before lunch there was a panel presentation on Big Data, chaired by Richard Graham of Edwards Wildman.  The other speakers were Bryan Glick of Computer Weekly, Carolyn Herzog, of Symantec Corporation and Scott von Poulton of Amazon UK.  Bryan talked about the growth of data since the invention of the printing press, making the point that technology is becoming commoditised and is ripe for innovation.  He explained that sometimes companies are innovative at the wrong time.  For example, in the early 2000s had an innovative clothes web site with customers having the ability to see clothes from different angles, but people were not ready for it.  Nowadays there are web sites using similar technology, such as Asos and Net-a-porter, which are successful businesses.

He also talked about how technology can be socially and culturally disruptive (for example the invention of the printing press arguably led to the Reformation).  Start-ups are among those best placed to make the most of the technology, but can be encumbered by the larger or more established players, who try to protect their incumbency (eg by using intellectual property laws to restrict consumer behaviour in the music and entertainment business).  He also said that technology can open up as many opportunities to get things wrong as to get them right.

Richard Graham then spoke about the legal issues, saying that there were similar issues arising around Big Data as there were around cloud computing, in particular around interoperability and intellectual property rights.  He talked about three broad categories of legal issues: licences-in, platforms and processing, and services-out.  He also considered an interesting US case considering the Vermont Prescription Confidentiality Law that prohibited pharmacies from selling or disclosing prescriber-identifying information when used for marketing purposes; he thought the case would have been dealt with differently in Europe.

The panel then discussed six case studies to highlight some of the issues in a practical context, such as cookies, where there is a gap between the perceived problem for consumers, and the steps web sites are being asked to implement.  They also discussed Google’s disagreement with the French regulator CNIL over its privacy policy and how regulators can be behind the times, for example, when the European Commission took action against Microsoft about bundling Internet Explorer with Windows.  Other topics for discussion were the accuracy of data, especially user-generated content, and how data is used.  Carolyn made the point that some practices (such as using Facebook to decide if applicants for loans are credit-worthy) might technically be legally permissible, but just feel ‘yucky’.  This led to Bryan commenting that organisations need to be open not only about what data they use but what algorithms they use to make decisions.

Apps: The Risks and Rewards

Following an excellent lunch during which there was more lively debate by attendees, the focus switched away from cloud computing.  The afternoon session was chaired by Mark Taylor of Hogan Lovells.  Again the presentations followed the panel presentation format, and the speakers were Oliver Bray of RPC, Melville Carrie of Chelsea Apps Factory and Claudia Gorman of Miniclip.

Oliver outlined some broad themes for the session, in particular, whether lawyers are engaging in this area or are they leaving it to the bloggers to raise issues.  He also mentioned the recent BBC story on Android apps leaking personal data and wondered if we are sitting on a timebomb – will something serious go wrong?

He discussed consumer law issues, mentioning the Consumer Rights Bill and outlining the Spreadex case.  His next topic was the various intellectual property issues facing Pinterest and data protection issues where the real world meets social media, as well as talking about a few apps he had discovered while researching the area for the SCL conference.  He also said that apps were a bit of a legal blindspot and regulators had not caught up yet.  However, the US seemed to be more on top of regulating this area than the UK or the EU, who have produced very little guidance on the topic, although the GSMA and Mobile Marketing Association have produced guidelines. He finished his talk by saying that lawyers are in a privileged position as they talk to all the players from developers to regulators to consumers and so can make a real difference.

Claudia talked about how Miniclip was dealing with some of the issues that arose from apps, such as child users, intellectual property rights, and money.  Many apps work on the ‘fremium’ model, whereby you can start using the app for free but have to pay more to get to higher levels or get extra weapons.  She gave the example of one app she has come across which was an ‘ABC’ app and you had to pay more to progress beyond H. Parents disliked having little or no control over their children buying apps and extra levels etc. She also said that the user experience is crucial and the small screen space of a mobile phone meant that you could not have a lot of legal information without detracting from the interesting content.

Melville Carrie followed on from Claudia’s talk, outlining the work of his company in developing enterprise apps and talked in detail about how you can present information to users so that they understand what they are signing up for, within the confines of a small screen.  He gave one example of an app with a pop-up screen that shows the user terms the first time you use it, and then went into more detail about a wine-buying app.  He said that the terms of use were 4,380 words long; he suggested splitting the terms into seven main headings, giving users bite-sized pieces of content. 

There was a lively audience discussion about other possible approaches and the merits of this approach which continued into the afternoon tea break.

Mobile Payments

The final session of the afternoon looked at mobile payments and continued the panel presentation approach with Brian Kennelly of Blackstone Chambers, Ben Regnard-Weinrabe of Hogan Lovells and David Shanks of Google presenting.  David outlined the various models for mobile payments, with Ben talking about the legal issues that arise with each model.  There was an animated discussion about, among other things, whether consumers will see any benefits from using their phones to pay, rather than a card, and therefore if there is likely to be any take-up, and how consumer-to-consumer payments could be facilitated.

Finally, Brian discussed the competition law issues that arise – he said that regulators are interested in mobile payments because there is a great deal of money involved.  However, they are employing a wait and see approach to assess where the technology goes, and to avoid a repeat of what happened with Microsoft.  The European Commission has already rejected a complaint from Paypal, Google and Three about a joint venture between the other UK mobile network operators.  This was despite their having 90% of the market, but the European Commission thought that there were alternatives, and was not convinced that, even with their dominance, the joint venture players could control the market.  Even if they did, it would be obvious to regulators and they would intervene.  He pointed out that the European Commission might take a different approach with a company like Facebook. At the end of the session there was a lively question and answer question. 

Dynamic Feel

There was a dynamic feel to the conference and this continued into the evening with wine and canapés in the lovely RCS Library, sponsored by Recommind.  At the beginning of the day Roger Bickerstaff had said that he wanted SCL to be a true community and had encouraged people to get out and talk to people they didn’t know. This call seems to have been acted on by the attendees as there was buzzing conversation throughout the day.

Thanks go to all of the speakers for their fantastic presentations and the audience who asked some thought-provoking questions on some fascinating subjects. 

Helen Hart is a former solicitor and is currently working as a freelance editor and writer on legal topics.