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Global Media and Communications Watch

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

Posted in International Trade and Investment Brian Curran

Two Key CFIUS Developments: CFIUS Publishes 2018 Annual Report and Proposed Regulations Revising Critical Technologies Mandatory Filing Program

CFIUS Publishes 2018 Annual Report

The Committee on Foreign Investment in the United States (CFIUS), a U.S. government interagency committee that conducts national security reviews of foreign investments, recently released its 2018 annual report. The report takes into account cases reviewed by CFIUS both before and after the August 2018 enactment of the Foreign Investment Risk Review Modernization Act (FIRRMA), which expanded CFIUS’ jurisdiction and enabled CFIUS to implement a pilot program that mandated filings for certain transactions involving critical technologies. The annual report confirms that, in 2018, China topped all foreign investors for the seventh year in a row, and describes CFIUS’ review of the first declarations submitted under the CFIUS pilot program.

Proposed Rule Would Alter Mandatory Filing Requirements

On 21 May 2020, CFIUS also published a proposed rule (the Proposed Rule) in the Federal Register that, among other things, would alter the requirements for the critical technologies mandatory filing program implemented on February 13, 2020 (essentially the successor to the pilot program). The Proposed Rule seeks public comment within 30 days of its publication. The Proposed Rule would replace the “industry” criterion of the critical technologies mandatory filing program with a criterion related to whether certain U.S. government authorizations would be required to export, re-export, transfer (in country), or retransfer the “critical technology” that the U.S. business produces, designs, tests, manufactures, fabricates, or develops to certain transaction parties and foreign persons in the ownership chain.

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We will continue to monitor this space for further developments. For further information or assistance regarding transactions potentially subject to CFIUS’ jurisdiction, please do not hesitate to contact any of the authors.

Posted in M&A

Negotiating M&A transactions in the COVID-19 era: considerations for navigating new opportunities in uncertain waters

As businesses around the world continue to adapt to new day-to-day realities and challenges brought about by the COVID-19 pandemic, priorities necessarily shift to near-term concerns. Nevertheless, times of significant disruption also give rise to new opportunities for both strategic buyers and financial sponsors.

Whether in the form of distressed M&A, defensive M&A, or strategic combinations – many industries are expected to see rapid, significant change in the weeks and months ahead. Evaluating M&A opportunities in the world that will exist as economies around the globe find a way forward calls for a fresh, comprehensive approach to thinking through every aspect of a transaction – and with this we could see some divergence from pre-COVID-19 market practice.

This is necessary not only to account for how the world has changed already, but also to anticipate and prepare for the uncertainties that lie ahead.

Click here to read our thoughts on some of the key issues to consider when negotiating M&A transactions in the COVID-19 era and how we expect the approaches taken by buyers and sellers to differ from those taken previously.

Posted in consumer privicy

Hogan Lovells Launches Global Privacy Guide to Support Businesses with COVID-19 Exit Plans

As the world focuses its efforts on the right strategy to beat the coronavirus and make normal life safe again, businesses are devising and implementing a variety of measures to deal with the COVID-19 crisis which rely on the collection, use and dissemination of personal data.

To assist with this challenge and ensure that privacy and cybersecurity aspects are appropriately addressed, Hogan Lovells has released a detailed guide providing legal analysis and practical recommendations.  The guide has been prepared by a team spanning its 45 offices around the world and led by the firm’s Global Regulatory practice.

It includes in-depth guidance and actionable tips for business in relation to measures such as COVID-19 testing, temperature screening, immunity certificates, and contact-tracing apps. Other critical areas such as customer communications, data processing during clinical trials, cyber risks and potential litigation risks, are also carefully considered.

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Posted in Copyright, intellectual property Eugene LowCharmaine Kwong

Cheaper in-app purchases… tempting but what is at stake?

Mobile applications are becoming indispensable in our daily lives and businesses. There are many ways to monetize a game app – through showing ads, offering free trials, income from in-app purchases etc. Unfortunately, there are people who reap profit from unauthorized in-app purchases. This also gives rise to potential legal issues such as infringement of intellectual property rights, money laundering, fraud and hacking. This article provides an overview of in-app purchases in games and the potential remedial actions.


With the global lockdown and travel restrictions in place, we are seeing an increase in online activities – social media, streaming entertainment, digital banking, video conferencing, food delivery, games and so much more. Many of these activities heavily rely on mobile applications – “apps”.

While apps touch on many facets of our daily lives and businesses, in this article we will look at the topic of unauthorized in-app purchases in games.

What are in-app purchases

You may wonder how app developers make money if the game apps are available for download free-of-charge. Out of the many ways to monetize an app (such as showing ads and offering free trials before charging for subscriptions), this article focuses on income generated from in-app purchases.

In-app purchases in games may come in the forms of:

  1. Consumables: game currency, extra health points or chances in a game, costumes/ skins for characters, upgrades to functionalities etc.
  2. Non-consumables: remove ads, upgrade to full/premium content, unlock bonus levels etc.

Payment is typically made through the app stores, with the sum distributed among app stakeholders.

Cheaper ways to buy?

Unfortunately, there are people who create cheats and monetize unauthorized in-app purchases.

By way of illustration, some websites claim to provide cheats, hacks or “legitimate” ways to charge game currency on your behalf at just a fraction of the official price you see in-app.

Such offerings might run into legal issues such as:

  • Money laundering
  • Usage of fake credit cards
  • Fraudulent refunds (claiming that the currencies did not come through after payment when in fact they did)
  • Hacking into the app algorithms

These unauthorized offerings may prejudice the financial success of the legitimate game developer, e.g. through a decrease in the number of people buying the authorized in-game contents.  They may also threaten the security of online accounts as many of these in-app purchases would require sign-ins, passwords or even identify verification.

Watch out!

There are a variety of actions that legitimate app developers and operators can take against these unauthorised in-app purchases. For example, app developers and operators can consider:

  1. Whether there is a breach of app/game user agreement which may trigger account suspension.
  2. Whether there is infringement of intellectual property rights (e.g. app trademark, copyright).
  3. Whether there are criminal activities involved, e.g. money laundering, unauthorised bank currency remittance or fraud.

Are you seeing suspicious in-app purchases hurting your app? Please do reach out to your Hogan Lovells contact to see how we can help.

Authored by Eugene Low and Charmaine Kwong.

Posted in Copyright, designs, intellectual property, patents, Technology Burkhart GoebelMiriam GundtCeline CrowsonLloyd Parker

Global Intellectual Property Outlook 2020 – Two steps forward and a look back

Our fourth annual Global Intellectual Property Outlook reflects on some of the biggest developments from 2019, and provides valuable insights on upcoming changes in 2020. From key decisions and the latest case law, to how emerging technology, policy and trade will impact your IP portfolio and strategy.


The start to 2020 has been an unprecedented time for us all. As citizens, businesses, governments and regulators adjust to the new challenges presented by the global spread of COVID-19, and social distancing and remote working become the new norm, there is no doubt that the way we conduct business is going to change for the foreseeable future.

We are here to help you adjust to the new challenges. Our latest thinking and guidance can be found on our COVID-19 Topic Centre, which includes an IP Office tracker and an IP Litigation tracker to help you keep up to date with guidance from IP offices and courts around the world. And, of course, we are here to discuss the challenges you’re facing and offer our support.

As we look ahead, we should not lose sight of major developments in IP law and other trends shaping products and businesses. Our Global Intellectual Property Outlook is here to help you prepare for those changes.

Topics covered include:

  • Patents
  • Standard Essential Patents (SEPs)
  • Post-grant proceedings
  • Trade secrets
  • Trademarks
  • Copyright
  • Domain names
  • International Trade Commission (ITC)
  • IP transactions
  • IP arbitration

We also examine emerging trends in technology, law and politics, and what they mean for your business, including:

  • 3D printing
  • Artificial intelligence
  • Blockchain and smart contracts
  • Brexit
  • Cybersecurity
  • Digital health
  • Digital Single Market
  • Esports
  • Influencer marketing

You can read our interactive publication here.

Posted in Data Protection & Privacy, International/EU privacy Eduardo UstaranLilly Taranto

Making COVID-19 Apps Data Protection Compliant

The role of COVID-19 contact tracing apps in the exit strategy of the current lockdown that is gripping much of the world is increasingly becoming a focus of attention. While that role is being hotly debated, it is very likely that those apps in combination with other measures will be deployed across many countries. Until now and despite the calls by influential bodies such as the European Data Protection Supervisor for a coordinated approach to the development of single COVID-19 mobile app involving the World Health Organization, different countries have adopted their own strategies.

However, in the European Union and in an attempt to adopt a harmonised approach, the European Commission and the European Data Protection Board (EDPB) have both issued guidelines on the development of COVID-19 apps aimed at ensuring compliance with EU data protection law in a consistent way.

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Posted in Policy & Regulation, Telecoms & Broadband Mark BrennanArpan Sura

Second Circuit Panel Sides with Ninth Circuit on What Qualifies as an Autodialer

A recent decision by the U.S. Court of Appeals for the Second Circuit in Duran v. La Boom Disco, Inc. has interrupted the emerging consensus around the definition of “autodialer” in the Telephone Consumer Protection Act (TCPA). On April 7, 2020, a Second Circuit panel joined a Ninth Circuit panel in adopting a broad reading of the statutory definition of “automatic telephone dialing system” (ATDS), commonly referred to as an autodialer. The Duran decision also rejected the reasoning in opinions issued by panels in the Seventh and Eleventh Circuits earlier this year, which deepens the split between the Courts of Appeals and increases the pressure on the Federal Communications Commission, Congress, and even the U.S. Supreme Court to provide clarity on what constitutes an autodialer under the TCPA.

Background

Duran, the plaintiff, alleged that La Boom Disco sent him hundreds of text messages without his consent using an autodialer. La Boom acknowledged that it sent the messages but claimed that the systems it used to send the messages were not autodialers because, among other things, they required too much human intervention and were not automatic. The U.S. District Court for the Eastern District of New York heard the case and agreed with La Boom that the technology systems at issue were not autodialers.

The Duran Opinion

On appeal, the Second Circuit panel considered the question of what qualifies a dialing system as an autodialer. The TCPA defines an “’automatic telephone dialing system” as “equipment which has the capacity─(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.” The district court found that LaBoom’s dialing systems met the first requirement of the definition but failed to satisfy the second element because they lacked the capacity to dial numbers automatically. Reviewing the court’s conclusions de novo, the Second Circuit panel disagreed and vacated the judgment.

The La Boom court reasoned that equipment can qualify as an ATDS if it: (1) makes calls from stored lists, even lists initially generated by humans; or (2) makes calls to numbers produced using a random- or sequential-number-generator. In adopting this interpretation, the Second Circuit departed from recent decisions by an Eleventh Circuit panel in Glasser v. Hilton Grand Vacations Company, LLC and a Seventh Circuit panel in Gadelhak v. AT&T Services, Inc. Both of those decisions concluded that an autodialer must use a random or sequential number generator to either store or produce numbers and that systems that rely on stored calling lists do not qualify as autodialers. The Second Circuit panel rejected that interpretation and reasoned that the inclusion of the federal-debts exemption in the TCPA supports a broader reading of autodialer. To service its debts, the government necessarily must call a human-generated list of phone numbers. If the definition of autodialer did not cover such activity, the panel concluded, the federal-debts exemption would make little sense. Thus, the term autodialer must include equipment that dials from stored lists. The panel also reasoned that an interpretation of ATDS that did not cover dialing from a stored list would render the word “stored” superfluous under the statute.

Addressing the second element of the autodialer definition, the La Boom court said that human intervention must involve more than “clicking send.” Sufficient human intervention must involve “the actual or constructive inputting of numbers to make an individual telephone call or to send an individual text message.” According to the court, the action involved in the case was more akin to initiating a process than actually dialing or inputting numbers. In so holding, the La Boom court sought to distinguish the D.C. Circuit’s opinion in ACA International v. FCC, which foreclosed any reading of ATDS that would encompass a conventional smartphone.

The Duran decision deepens the split between the Courts of Appeals, with the Second and Ninth Circuit panels adopting a broad reading and the Seventh and Eleventh Circuit panels choosing a more measured approach. The split increases the pressure on the Federal Communications Commission, Congress, and even the U.S. Supreme Court to provide clarity on what qualifies as an autodialer under the TCPA.

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Our TCPA Working Group brings together more than 25 attorneys in our litigation, communications, commercial, and privacy practice areas. We provide regular TCPA counseling to clients from a broad range of industries, including technology, healthcare, communications, transportation, and financial services. We have secured dismissals and nominal settlements for clients in TCPA actions and have worked with the FCC to clarify rules addressing a number of key TCPA issues. We also have significant experience in TCPA appeals.

Posted in Policy & Regulation, Telecoms & Broadband Michele FarquharAri FitzgeraldTrey HanburyArpan Sura

Executive Order Creates Committee to Replace “Team Telecom” Review of Foreign Telecom Investments

Recent developments have positioned the Executive Branch to exert greater influence over the U.S. telecommunications sector. On April 4, 2020, President Donald Trump issued an Executive Order creating a new process for Executive Branch review of telecommunications-related applications and licenses involving foreign participation. The new procedures replace the review currently performed by an informal, multiagency group known as “Team Telecom.” But the mandate includes several novel features that expand the reach and scope of national security review beyond what Team Telecom could accomplish.

The Executive Order authorizes the newly formed Committee for the Assessment of Foreign Participation in the United States Telecommunications Services Sector (Committee) to conduct a national security and law enforcement review of any applications and licenses that pose risks to national security and law enforcement interests of the United States.  Federal Communications Commission (FCC) Chairman Ajit Pai and Commissioner Michael O’Rielly praised the Executive Order, and Commissioner Brendan Carr urged the Committee to investigate every carrier owned by the Chinese government that now connects to networks in the United States.

The focus on China, coupled with the ability to review existing licenses, will make China Telecom and China Unicom, two Chinese-controlled holders of FCC authorizations to provide international telecommunications services, more vulnerable. In fact, on April 9, the Department of Justice announced that Executive Branch agencies with national security expertise unanimously recommended that the FCC revoke and terminate China Telecom’s authority to provide international telecommunications services in the U.S.

The focus on China may also put small rural carriers with Huawei equipment in their networks in the Committee’s crosshairs, even though they do not have foreign investors and have not engaged in transactions that bring them within the traditional Team Telecom review process. The Committee might claim authority to condition their licenses on the removal of Huawei equipment, possibly at the small rural carriers’ expense.

The Executive Order also addresses longstanding industry concerns about Team Telecom by providing structure and increased transparency to a review process that has previously been criticized as opaque and one-sided. Clearly defined membership and timelines, written analysis, and standardized questions and mitigation measures should give telecommunications providers and their non-U.S. investors more clarity and predictability. The new procedures and timelines, however, give the Executive Branch agencies a great deal of discretion to determine when they have received all of the information they need to make an assessment. They also still permit a lengthy and potentially burdensome review.

The FCC will likely move quickly to adopt rules to implement the Executive Order, most likely by releasing a public notice seeking comment on how best to implement the Executive Order in an extant proceeding initiated in 2016 to reform the Team Telecom process. Continue Reading

Posted in Consumer Privacy, Internet Michelle KisloffPaul OttoAdam Cooke

COVID-19 and IT Service Provider Contracts: A Checklist for Force Majeure Events

The COVID-19, and the various restrictions that have been implemented in response to it, are causing extraordinary business disruptions. Many organizations have had to modify their operational controls and accommodate a shift to remote working (among other adjustments). One key impact of COVID-19 involves an organization’s relationships with its IT service providers, which often play important roles in securing their data and systems. Under current conditions, some service providers may face challenges in performing this work, especially for engagements that require significant personnel resources or that require personnel to be on-site. Potential non-performance has significant consequences for service providers and their clients alike.

To prepare for these challenges, entities that have contracts with service providers (and service providers themselves) should carefully review their existing agreements and any force majeure-type provisions in particular. Although force majeure provisions in existing contracts may not specifically contemplate a global pandemic such as COVID-19, these provisions are often broadly-worded and based on events beyond a party’s control and may excuse non-performance under the contract or allocate risks and costs differently when such an event occurs.

To read our COVID-19 service provider risk mitigation checklist, click here.

Visit the Hogan Lovells’ COVID-19 Topic Center for resources and guidance on responding to the crisis

Posted in Advertising, Data Protection & Privacy, Technology

Webinar Invitation — AdTech and Privacy: Managing Risk in a Complex and Evolving Digital Economy

Join Hogan Lovells and Ankura to learn about the impact of the GDPR and CCPA on cookies and similar AdTech tracking technologies. James Denvil from Hogan Lovells’ Privacy and Cybersecurity practice by senior directors from Ankura to share best practices and their perspectives.

Program topics will include:

  • Cookies and Similar Tracking Technologies Defined
    • How cookies and similar tracking technologies support and enhance digital services, including advertising
    • Types of cookies (are your cookies strictly necessary or for marketing purposes?)
    • Ways in which consumers’ digital activities are shared throughout the digital advertising ecosystem
  • Tracking Technology Legal and Regulatory Challenges
    • How cookies have evolved from being “totally anonymized” trackers to “profiling tools” in the eyes of regulators and others
    • Key legal and regulatory challenges to deploying cookies and similar technologies for digital advertising
    • Industry and “homegrown” solutions to address the regulatory challenges
  • AdTech Data Privacy Best Practices in a GDPR and CCPA World
    • Best practices for cookie risk governance
  • The Future of Cookies
    • Potential changes in the digital advertising ecosystem with the supposed death of third party cookies

Date:
Wednesday, April 15, 2020

Time:
12:00 p.m. – 1:00 p.m. EDT

To register, please click here.