On Tuesday 14 November the Hogan Lovells DSM Taskforce (our dedicated pan-EU team of lawyers tracking the Commission’s DSM strategy) had its annual live meeting in Brussels to discuss the progress of the implementation of the DSM strategy and key forthcoming developments. The team held a webinar on the status of the strategy and what to expect in 2018 in the areas of platforms, e-commerce, the draft AVMS Directive, the copyright reforms, privacy and telecoms. If you missed it you can read the highlights below or watch the recorded webinar here.
In the area of platforms, Christian Ritz and Falk Schöning highlighted the Commission’s Impact Assessment: “Fairness in platform-to-business relations” (which is running until 22 November). In this, the Commission outlines three policy options to regulate online platforms: (1) a soft law approach to stimulate industry led actions; (2) targeted legislation in parallel with EU competition law, and (3) a detailed regulatory framework to be applied in conjunction with EU competition law. This third option would involve an EU regulator for online platforms. Falk Schöning explained that the Commission currently contemplates whether regulation or antitrust enforcement of platforms is the more efficient way to tackle digital markets. He talked about the term “Hipster antitrust”, which is a US term applied to the call for interventionist regulation for the big internet players. Falk said that the Commission is trying to obtain more data on the power of these large companies in order to understand the impact of the big players on SME’s in Europe. This will feed into the debate on whether a more interventionist approach is needed on online markets. The Study will be published in the next few months.
Does blockchain technology open up new avenues in the field of electromobility? Can decentralized processes that are controlled by a large network be used to convert individual mobility on the road to electrified vehicles and sustainable energy resources? These questions are the starting point of the following blog post of our series on blockchain. In addition to smart contracts, which we discussed in the last blog post, electromobility is another field in which technical innovation and intelligent billing processes can bring significant value via blockchain.
In general, electromobility means the use of electrified vehicles for individual mobility. It relies on a form of power based on the storage of energy in memories (batteries) installed in the vehicle, possibly as hybrid supplementation to an internal combustion engine. Thus, electromobility is a key element of a sustainable and climate-friendly transport system based on renewable energies. Despite the primary advantage – reducing emissions – there are some disadvantages for the consumer. The main issue is “range”, the distance an electrical vehicle can cover with one charge/fill, which is still restricted compared to vehicles with an internal combustion engine. Depending on the model and the driving style, this is sometimes only 100 kilometres. Long battery charging time is another negative aspect. It is therefore necessary to create an infrastructure, away from home and the workplace, which allows continuous recharging of batteries – where the vehicle is in a position to be on the spot for longer periods of time.
First come, first served. That’s not the principle behind the clearance of Bitcoin transactions. Equally for other blockchain technology networks, the relevant factor to get a transaction on the next available block is not time, but often: money. “Paid prioritization” is a reality. Miners will first pick and clear those transactions which will most highly reward them.
Is this a problem? Not necessarily. As long as users have plenty of alternatives in the fields of cryptocurrency or smart contracts they can just use different networks. However, in the medium or long run this issue could trigger the attention of regulators and antitrust authorities. Blockchains in highly regulated industries such as financial services or stock exchanges and those with consumer-facing applications are most likely to be under the microscope.
Is this concern premature? No. Who would have envisaged ten years ago that antitrust authorities would choose internet search engines, e-commerce platforms and algorithms as their favourite subjects for investigations and conference talks? And compare blockchain with other internet industries that are actually subject to regulation: this article argues that blockchain activists and users can learn from the heated debate around the net neutrality of internet networks. In that case, regulators eventually prohibited higher fees for bandwidth-consuming content such as streaming services. So it is important that a blockchain network gets its governance issues right from the very beginning to avoid cumbersome regulation and antitrust procedures.
The EU Commission announced its Digital Single Market (DSM) strategy in May 2015. Since then, plenty of draft directives and regulations have been put on the table. Many of those will be enacted within the next weeks and months. The EU Parliament and Council are currently in the process of agreeing on last amendments to the Commission’s proposals, with various Parliament committees working long hours on compromises.
Join our webinar on 14 November, 4:00pm – 5:00pm (CET) for a lively discussion with our very own experts who will take a look at latest developments. How will the new monitoring obligations for platforms look like? Will further stakeholders be equipped with new ancillary rights? What are so-called “harmful trading practices” and in which way will they be tackled? How liberal will the new law on text & data mining be? What about the AVMS Directive, the e-Privacy Regulation and the “European Data Economy” package?
We will look at where we currently stand with the implementation of a true Digital Single Market and what we may expect from Brussels in 2018.
We hope you can join us.
For the latest information, updates and news on the DSM initiative, please visit DSM Watch, our dedicated microsite.
Falk Schoening Partner, Brussels, Hogan Lovells
Nils Rauer Partner, Frankfurt, Hogan Lovells
Salomé Cisnal De Ugarte Partner, Brussels, Hogan Lovells
Alastair Shaw Counsel, London, Hogan Lovells
Christian Ritz Senior Associate, Munich, Hogan Lovells
Alberto Bellan Senior Associate, Milan, Hogan Lovells
Dina Jubrail Associate, Brussels, Hogan Lovells
In the first major transaction approval under Ajit Pai’s Chairmanship, the Federal Communications Commission (“FCC”) recently approved, subject to targeted, transaction-specific conditions, license and authorization transfers in connection with CenturyLink’s $34 billion acquisition of Level 3. The FCC’s recitation of its merger review standard in its order (the “CenturyLink-Level 3 Order”) differed somewhat from the description of the standard used in recent transactions reviewed during the Obama administration. The Commissioners’ separate statements debated whether the new formulation merely clarified the FCC’s existing standard or constituted a substantial alteration of the standard.
Welcome to the Hogan Lovells Global Payments Newsletter. In this monthly publication we provide an overview of the most recent payments, regulatory and market developments from major jurisdictions around the world as well as sharing interesting reports and surveys on issues affecting the market.
Key developments of interest over the last month include:
Netherlands to postpone implementation of PSD2: On 22 September 2017, the Dutch Finance Minister announced that it is no longer realistic for the Netherlands to transpose PSD2 by the 13 January 2018 deadline and that implementation is not likely to be completed until Spring 2018 at the earliest.
Joint Committee of the European Supervisory Authorities publishes final guidelines under revised Wire Transfer Regulations: The final guidelines, published on 22 September 2017, explain the measures and procedures relevant to payment service providers where information on payers or payees is incomplete or missing.
Bank of England and Payment Systems Regulator announce formation of New Payment Systems Operator: A joint press release on 13 September 2017 stated that the necessary preparations had been completed. Board members have since been appointed.
To view a PDF of the full Newsletter please click here. You can also follow us on Twitter at @HLPayments for regular news and updates.
Last Monday, the Supreme Court granted certiorari in the Microsoft search warrant case, a case in which Microsoft challenged the U.S. government’s right to use the warrant process to obtain certain emails stored overseas. Some view the upcoming decision as signaling the level of access the U.S. government will have to the growing troves of data U.S.-based technology companies hold about citizens of the world. And regulators in the EU and other jurisdictions may view a reversal of the Second Circuit decision as a negative factor when considering the protections the U.S. government afford their citizens’ data. The case was previously decided twice in Microsoft’s favor in the Second Circuit, which declined to grant en banc review by a 4-4 decision.
Microsoft has publicly advocated their position as the case has wound its way through the courts, and in a Monday blog post focused on legislative solutions to the impasse, “The current laws were written for the era of the floppy disk, not the world of the cloud. We believe that rather than arguing over an old law in court, it is time for Congress to act by passing new legislation, such as the International Communications Privacy Act (ICPA) of 2017.”
The Microsoft case is the second case the Supreme Court will hear this term that challenges interpretations of the aging Stored Communications Act (SCA)—the other being Carpenter v. United States. That case centers on whether the use of cell tower records to determine an individual’s location amounts to a 4th Amendment search or if such a search can be justified under the processes outlined in the SCA.
For more on the Microsoft case, the alternative to the warrant process for obtaining overseas data, and subsequent decisions that go against the Second Circuit opinion see our recent article published in the Spring 2017 edition of International Law Quarterly.
Hogan Lovells partner Winston Maxwell spoke on October 12, 2017 at a conference on artificial intelligence organized by the French think tank “Le Club des Juristes”. What follows is an English version of his prepared remarks.
Artificial intelligence (“AI”) permits valuable new applications for society. Autonomous vehicles will increase safety and reduce pollution. Voice recognition could make computer keyboards obsolete. AI will advance medical science, and help manage the consequences of global warming. These applications generate huge value for society, but can create new risks, including disruptions in the workforce (I won’t address disruptions in the workforce here, but recommend a study on the subject by the National Academies of Sciences).
Most of the risks and harms associated with AI are linked to how AI is used, not to AI itself. The regulatory responses should also be focused on AI uses, not on AI. AI in autonomous vehicles should be regulated through car safety rules. AI in banks should be regulated in through banking regulations, AI in home devices through product safety rules. These regulatory risks, and the appropriate regulatory response, are easy to grasp.
More challenging are the questions linked to AI and fundamental rights. Does AI create a risk for fundamental rights and, if so, what is the appropriate regulatory response? Let me mention three fundamental rights that are often discussed in the context of AI:
Whether malicious or inadvertent, workforce actions cause or contribute to over half of cyber attacks experienced by organizations. Protecting against such “insider” cyber risks can be challenging, especially given the global web of privacy, communications secrecy, and employment laws that may be implicated by monitoring workforce use of IT resources.
Harriet Pearson and James Denvil, lawyers in the Hogan Lovells Privacy and Cybersecurity practice, have led the authorship of a white paper to help companies understand and navigate the workforce cyber risk landscape. An international team of privacy and cybersecurity lawyers from Hogan Lovells and select local counsel firms contributed to the analysis.
This white paper does three things:
- Summarizes the key legal issues implicated by such workforce monitoring programs;
- Describes the relevant legal frameworks in 15 major countries, including several European Union member states; and
- Provides practical tips that organizations can adopt when developing global cyber defense programs.
While not constituting legal advice, this new Hogan Lovells white paper can be a valuable resource to organizations seeking to benchmark or assess their insider cyber threat programs.
Click here to access the full white paper and additional information from the authors.
Growing evidence suggests that existing Telephone Consumer Protection Act (“TCPA”) compliance challenges, and the current TCPA litigation landscape, are increasingly a threat to many U.S. companies – particularly small businesses that have fewer resources and could face financial ruin if targeted by a class action lawsuit. To help address this issue and support the U.S. economy, Congress and the Federal Communications Commission (“FCC”) should revise the current TCPA framework and facilitate reasonable, practical compliance approaches for companies attempting in good faith to communicate with customers.