ASA issues statement on crypto-assets, CMA publishes response to consultation on Data: A new direction, CMA also issues consultation on Retained Horizontal Block Exemption Regulations and more in this week’s round-up of UK, EU and international techlaw news developments not covered elsewhere on the SCL website.
ASA issues statement on crypto-assets
The Advertising Standards Authority has issued a statement saying that it is aware that people are concerned about crypto-asset advertising, particularly regarding cryptocurrencies and non-fungible tokens. The ASA says that this is is a “red alert” priority issue and so it is taking action. Crypto-assets have exploded in popularity in recent years, but there’s a real danger that people may be drawn in to invest life savings that they later lose based on poor understanding. The ASA wants to ensure that ads do not mislead consumers about a product’s risks or act irresponsibly in their promotion. To that end, it is currently investigating a number of crypto-asset ads across different media, where it has concerns about: lack of appropriate risk warnings; the trivialisation of investments in cryptocurrency ads taking advantage of consumers’ inexperience or incredulity; and irresponsible advertising (for example, creating a sense of urgency to invest). It will be providing clarity around its expectations of crypto-asset advertising through its rulings, which it intends to publish in mid-December. It then intends to carry out proactive monitoring and enforcement to tackle non-compliant ads for crypto-assets and will continue to review its policies and rules around crypto-asset advertising.
CMA issues response to consultation on Data: A new direction
The Competition and Markets Authority (CMA) has responded to the Data: A new direction consultation, led by the Department for Digital, Culture, Media & Sport. The CMA welcomes the key aim of the government’s data strategy to support vibrant competition and innovation to drive economic growth. It says that data, including personal data, is an increasingly important component of modern digital economies and is a key enabler of increased competition. An effective and proportionate data protection framework can help drive strong competition in digital markets and play a key role in enabling businesses and consumers to share the benefits of the data economy. The CMA has provided comments in its response on the important synergies between the data and competition regimes and to certain specific questions in the consultation, either where the CMA might have concerns about a proposal or where it considers that its views may help in the effective development of the proposal.
CMA issues consultation on Retained Horizontal Block Exemption Regulations: R&D and specialisation agreements
The CMA is also reviewing the two retained Horizontal Block Exemption Regulations to inform its recommendation to government on whether to replace them when they expire on 31 December 2022. The Competition Act 1998 prohibits agreements between businesses that restrict competition in the UK (unless they meet the conditions for exemption in section 9(1) of the Competition Act or are otherwise excluded). This is known as the Chapter I prohibition. The retained Research and Development Block Exemption Regulation (R&D BER) and the retained Specialisation Block Exemption Regulation (Specialisation BER), together referred to as the Horizontal Block Exemption Regulations (retained HBERs) include automatic exemptions for certain categories of horizontal agreements. The CMA’s review assesses whether the retained HBERs meet their intended purpose and take account of specific features of the UK economy serving the interests of UK businesses and consumers. The CMA’s review will also consider the European Commission guidelines that accompany the existing HBERs. The consultation ends on 11 January 2022.
DCMS publishes National Data Strategy Mission 1 Policy Framework
The Department for Digital, Culture, Media & Sport has published the National Data Strategy Mission 1 Policy Framework. The Framework sets out how the UK government will facilitate private and third sector data being more usable, accessible and available across the UK economy. At the same time, it says that individuals’ personal data and private enterprises’ intellectual property must be protected. The Framework sets out a set of principles that government will use to guide interventions seeking to unlock data across the economy, to ensure that it employs the most effective approach to deliver public benefit. The government has identified specific areas for action that, in combination, can address some of the key barriers to data sharing for public benefit. The government continues to collate information to refine and target these approaches, which are based on its current understanding of the data landscape. Specific interventions will therefore evolve as its evidence base increases.
DCMS issues response to consultation on Electronic Communications Code
The Electronic Communications Code regulates the rights of telecommunications operators to install and maintain their apparatus on public and private land. The DCMS has published its response to the its consultation on the Electronic Communications Code. It says that as soon as Parliamentary time allows, the UK government will introduce primary legislation that will make changes to the Code. These changes will be based on the responses received to the consultation. The changes it makes will aim to support the installation, maintenance and upgrading/sharing of apparatus, alongside facilitating faster and more collaborative negotiations between operators and site providers, while balancing the public interest in having improved digital connectivity with private property rights.
Ofcom responds to additional questions regarding Online Safety Bill
Ofcom has issued a technical note to respond to questions from the Draft Online Safety Bill (Joint Committee) about the Online Safety Bill. Ofcom says that it wants the online safety regime to be up and running as quickly as possible to make life online safer for UK users. It is also mindful that industry is keen for clarity about what the expectations on them will be. It will consult widely and publicly on the development of the online safety regulatory regime, including the relevant codes of practice. The note covers issues about coregulation, timing considerations, risk assessments, audits, accountability, use of technology notices, one-to-one services, the Age Appropriate Design Code and age assurance and verification. Ofcom points out that it has carried out a lot of preparatory work but if the Online Safety Bill is significantly changed from the draft published by the government, this will have an impact on the timelines.
European Parliament Committee adopts position on Digital Markets Act proposal
The European Parliament’s Internal Market and Consumer Protection Committee has adopted its position on the Digital Markets Act (DMA) proposal, which sets rules for with “gatekeeper” status. The proposed regulation will apply to the major companies providing so-called “core platform services” most prone to unfair practices, which meet the relevant criteria to be designated as “gatekeepers”. The Committee has added web browsers, virtual assistants and connected TV. It has also increased the quantitative thresholds for a company to fall under the scope of the DMA to €8 billion in annual turnover in the EEA and a market capitalisation of €80 billion. To qualify as a gatekeeper, companies would also need to provide a core platform service in at least three EU countries and have at least 45 million monthly end users, as well as more than 10 000 business users (an annex sets out how these indicators should be measured). These thresholds do not prevent the Commission itself from designating other companies as gatekeepers when they meet certain conditions. Gatekeepers will have to refrain from imposing unfair conditions on businesses and consumers. The Committee included additional requirements on the use of data for targeted or micro-targeted advertising and the interoperability of services, eg number-independent interpersonal communication services and social network services. particular, personal data of minors shall not be processed for commercial purposes, such as direct marketing, profiling and behaviourally targeted advertising. The Committee also said that the Commission should impose “structural or behavioural remedies” where gatekeepers have engaged in systematic non-compliance. In particular, there could be restrictions on gatekeepers from making acquisitions in areas relevant to the DMA to remedy or prevent further damage to the internal market. Gatekeepers would also be obliged to inform the Commission of any intended concentration. The Committee also proposes a “European High-Level Group of Digital Regulators” to facilitate cooperation and coordination between the Commission and member states in their enforcement decisions. The text clarifies the role of national competition authorities, while keeping the enforcement of the DMA in the hands of the Commission. Internal Market Committee MEPs also say that the DMA should ensure adequate arrangements to enable whistleblowers to alert competent authorities to actual or potential infringements of this regulation and to protect them from retaliation. If a gatekeeper does not comply with the rules, the Commission can impose fines of not less than 4% and not exceeding 20% of its total worldwide turnover in the preceding financial year. The DMA is due to be voted on in plenary in December 2021. The approved text will then become Parliament’s mandate for negotiations with EU governments, planned to start under the French presidency of the Council in the first semester of 2022.