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Global Media and Communications Watch

The International Legal Blog for the Tech, Media and Telecoms Industry

Posted in Technology Peter Watts

Big deals, big ideas, and big challenges spur TMT activity

This interview with Peter Watts takes a look into how intense innovation, diverse deal structures, and political protectionism are changing the face of M&A in the technology, media and telecommunications space. Peter focusses on the following questions:

  • What are the main drivers for cross-border deals at the moment?
  • What do you think has been the most intesresting deal of Q3, and why?
  • With innovation as a major driver of deals, do you feel that M&A is the best way for companies to nurture that kind of innovative spirit?
  • Does the drive for innovation differ across other sub-sectors?
  • What are the major challenges to M&A in the sector?
  • As we move towards 2019. what advice do you have for companies looking to do deals in the sector?

Access the full interview on our Deal Dynamics Market Insights resource here


For more analysis, visit Deal Dynamics our powerful interactive data tool with exclusive editorial content providing analysis and insights on cross-border M&A

 

Posted in Artificial Intelligence, Data Protection & Privacy Jason Lohr

Legal landmines lie in wait for machine learning applications

An ever increasing variety of companies are incorporating machine learning into their products and services. Machine learning provides the ability to quickly and accurately perform, in parellel, a large number of well-defined tasks. The accuracy will improveover time as additional data is obtaied and the machine learning model continues to “learn”. Many companies, however, are struggling with the best way to protect machine learning and artificial intelligence innovation.

In amchine learning, statistical models (ie, neural networks) are trained using a set of classified data. Once trained, the model can analyse unclassified data, such as images representing unidentified objects, and classify or generate observations for the data. A significant issue slowing widespread adopetion of machine learning is the inability to acess or determine the internal relationships or mechanisms y which machine learning generates these observations. Information about the initla configuration and training might be known, but trained models cannot “explain” in easily understandable terms how specific decisions were made. Continue Reading

Posted in Policy & Regulation Tony Lin

NOAA Hosts First Ever Interagency Satellite Workshop

In October, the US National Oceanic and Atmospheric Administration (NOAA) brought together NOAA licensees and prospective licensees and representatives from across the federal government for a workshop on U.S. satellite licensing and compliance regulations. The first of its kind, this three-day event was designed to promote transparency and awareness about government processes and to improve engagement with regulators. The event received widespread support from senior government officials and was well attended by industry.

Continue Reading

Posted in Policy & Regulation

UK leads the digital tax charge (again)

After much speculation, UK Chancellor Philip Hammond announced today in his annual budget speech that the UK will introduce a Digital Services Tax (DST) with effect from April 2020. In doing so, the UK has followed the example set with its Diverted Profits Tax by taking unilateral action first, and pre-empting possible EU and OECD proposals for a similar measure. This is despite stern criticism from the US Treasury and various quarters in business.

The new tax will be applied at a rate of 2% to UK revenues derived from search engines, social media platforms, and online marketplaces. It will hit all groups with global revenue derived from these sources in excess of £500m per year, but make a number of concessions, presumably to address concerns raised widely (including in this blog)about its effect on innovation, start-ups and competition. Loss-makers will be exempt, and measures introduced to reduce the effect on very low margin business. There will also be a (presumably tax free) annual allowance of £25 million.

Curiously, the proposals appear not to catch ordinary online business, or content providers. However, as with the Diverted Profits Tax, the devil will be in the final detail. The UK government will consult before legislating, and notes its commitment to G20 and OECD discussions about wider reforms to the international tax system. As such, the new tax  is temporary. It was the same with income tax in 1842.

Whilst the announcement will, no doubt, be applauded and criticised in equal measure, the UK Government does appear to have listened to (some) concerns. It is also proposed at a lower rate than the 3% originally mooted, or the 5% rate that the European Parliament would like. Whether it puts pressure on the EU to follow suit is a good question, but it will no doubt raise hackles in the US. It might even be a bargaining chip in post-Brexit trade talks.

Posted in Data Protection & Privacy Timothy Tobin

California Consumer Privacy Act: The Challenge Ahead – CCPA and Employee Data

This is the seventh installment in Hogan Lovells’ series on the California Consumer Privacy Act.

The application of the California Consumer Protection Act of 2018 (“CCPA”) to employee data has been the subject of much debate since the first version of the bill was introduced on June 21, 2018 (just days prior to its enactment on June 28). Under a plain language reading of the CCPA, the law likely applies to employee data. However, it is unclear whether the California legislature intended that result. There is no clarity to be found in the general statutory structure, the legislative history, legislative responses to advocate letters, or the technical amendments signed into law on September 23. As part of our ongoing series on the CCPA, this post lays out why the issue of CCPA applicability to employees is controversial and nevertheless offers potential strategies to address CCPA compliance requirements as they may relate to personnel records. Continue Reading

Posted in Copyright, e-commerce Nils Rauer

EU Commission provides guidance on new Geo-Blocking Regulation

In the European Commission’s plan to create a unified Digital Single Market, the measures to promote e-Commerce are well ranked. A reason for that is the increasing impact that the digital world, and especially online shopping, is having on our lives. The Internet per se recognizes no border, and therefore artificial barriers may feel even more misplaced. To tackle those obstacles to cross-border online activity, the European Commission launched a series of legislative proposals (get an overview here), some of which have already been enacted by the European legislator. Continue Reading

Posted in Artificial Intelligence, Policy & Regulation, Technology Peter WattsRichard Diffenthal

Truth is subtler than fiction

The evolution of science fiction into science fact has become so prevalent it no longer attracts remark.

Technologies that once lived only in the pages of futuristic novels or the flight deck of the USS Enterprise – like the universally connected mobile phone or DNA editing – already surround us. And, from the driverless car to delivery by drone, if they are not commonplace quite yet, surely it is only a matter of a few short years before they are?

Of all these scientific transformations, the most talked about is Artificial Intelligence.  Businesses from every sector, politicians and philosophers across the globe see AI as potentially transformative. Driving entirely new solutions to many of problems that face us; creating entirely new ways of working, interacting and living our lives; raising entirely new ethical, social, legal and practical challenges.

Attending a fascinating meeting of the AI Working Group of the Confederation of British Industry (CBI), served to re-emphasise the subtleties and complex challenges raised by the introduction of technological change (and even more paradigm shifts in technology) in the real world and the role of government, business and advisors in navigating those challenges.

By bringing together businesses at the cutting edge of AI development with those who are exploring the use of AI to solve their business challenges and to connect them representatives of the twin bodies leading the UK Government’s AI Agenda – the Office of Artificial Intelligence and the Centre for Data Ethics – the meeting provided a platform to explore some of the very practical questions raised by AI.

Every country, every region and every city wants to be at the forefront of the next scientific revolution. The UK has a tradition of leadership stretching back to the first industrial revolution when the steam engine was the great “emerging technology”. It should therefore come as no surprise that grasp the opportunities of what some call the “fourth industrial revolution” forms a key component of the UK’s Industrial Strategy.

As the meeting recognised, the single most important step is how to take the technology out of the hands of technologists and into the real world. The genius of the first industrial revolution was the rapid application of the steam engine in myriad environments across the economy. Within a generation they had moved out of the mines and were moving people and freight, and powering factories, the length and breadth of Britain.

The winners of the fourth industrial revolution will be those who grasp the opportunities of AI and apply it successfully to solve existing problems and create new opportunities. Those people will not necessarily be those who can program AI code. Indeed it is arguable that computer scientists are the least likely of all to see the true value of their work; that takes different skills  and insights – those of identifying the problems and opportunities; how the technology can be applied; and of navigating both individual, organisational and societal resistance to change.

The Working Group explored three broad areas which the UK, like every other society, needs address:

  • Data – if AI is the steam engine of the fourth industrial revolution, data constitutes the raw materials which both drive the engine and which the engine processes to create value. Helping business to access to the most useful data is therefore a central policy objective for Governments. One with which the UK’s fast developing “data trusts” initiative is designed to grapple
  • Skills – as the success of AI will lie not simply in the ability to generate algorithms and AI based systems but also deploy them in practical applications, so the skills necessary for success will straddle those areas meaning that the UK’s emerging program promoting academic and technical focus on AI and the AI “sector deal” will need to be the start of a more wide ranging transformation in skills across the economy
  • Trust – the rollout of factories and railways generated immense political controversy over the impact on society and the environment. It is therefore not surprising that this latest revolution raises complex new questions about social impact – whether the risks of hidden bias in AI systems, the allocation of value from (and responsibility for) AI activity or even “machines playing god”. The UK’s strong tradition in finding proportionate regulatory and self-regulatory solutions to complex problems provides it with an opportunity to take a leading role in one of the central questions of the next 20 years.

The CBI’s Initiative, and government’s engagement, demonstrate the  drive in UK government and business to grapple with the real world challenges of taking AI from invention to real world innovation. They also remind us that that is a much more complex process than raw invention and a more subtle process than ever emerges from the pages of literature or the TV screen.

Posted in Data Protection & Privacy, Policy & Regulation Timothy TobinPaul Otto

California Passes First-Of-Its-Kind Law Focussed on Internet of Things Cybersecurity

Late last month, California Governor Jerry Brown signed the first US Internet of Things (IoT) cybersecurity legislation: Senate Bill 327 and Assembly Bill 1906. Starting on January 1, 2020, manufacturers of regulated connected devices are required to equip such devices with “reasonable security features” designed to protect a connected device and any information it holds from “unauthorized access, destruction, use, modification, or disclosure.” This legislation was prompted by what the bill’s sponsor viewed as a “lack of security features on internet connected devices undermin[ing] the privacy and security of California’s consumers.” Continue Reading

Posted in Cybersecurity, e-commerce Zhen FengSuyu Yuan

China: Three Cyberspace Courts now online and open for business

On 9 August and 28 September 2018, the new Cyberspace Courts in Beijing and Guangzhou were officially opened. These new specialised courts, along with their equivalent one that was formed in Hangzhou in August 2017, are meant to tackle the quickly swelling stream of internet-related court procedures in China. The establishment of these specialised courts is an encouraging step for the Chinese internet sector as well as for IP owners: it promises a more flexible procedure, less bureaucracy in obtaining evidence and higher quality judgments, handed down by specialist judges.

Jurisdiction

The establishment of the two new cyberspace courts fits in with the government’s policy of encouraging and regulating China’s burgeoning e-commerce sector, and comes in the wake of the promulgation of China’s first E-Commerce Law, which will soon enter into force. Continue Reading

Posted in Deal Trends Peter Watts

Headwinds make little impression on cross-border deal dynamics

For those operating in the TMT sector the pace of change in technology and in business models seems only to be matched by the pace with which regulators rush to keep up.

It can sometimes feel like decisions in Beijing, Brussels, London and Washington, to name but a few, are creating unbeatable headwinds for those looking at cross-border M&A in the sector.

Deal Dynamics, the new Hogan Lovells analytical tool looking at cross-border M&A, presents little clear evidence to support that concern.

There may be some signs of a slight softening in an overall cross-border M&A market which continues to show significant activity. However, the statistics provide little indication that cross-border TMT M&A is being hit hard by specific regulatory challenges. Indeed, the figures suggest that strong fundamentals (innovation, convergence and consolidation) continue to carry significantly more weight than the regulatory headwinds.

Those are themes we explore further in the market insights accompanying those figures.

Of course, whether those trends continue remains to be seen. Will the fundamental business deal drivers remain as “hot” as they have over recent years? Will regulators across the world see M&A as a positive driver, or negative influence, on the development of domestic TMT sectors?  Will deal makers and their advisors continue to navigate regulatory challenges?

Those are questions  Deal Dynamics will be monitoring over the coming months.