Technology & Digital round-up: 26 November 2021

26th November 2021

Welcome to our latest round-up of legal and non-legal tech-related news stories. This edition covers smart contracts, proposed new cyber laws, electric vehicle developments, social media boycotts and much more. Get in touch with one of our experts below if you have any queries or need advice or assistance.

The legal part…

• In a significant and welcome development, the Law Commission has confirmed that the law of England and Wales can accommodate smart legal contracts, without the need for statutory law reform. The Commission is encouraging parties to anticipate and cater for potential uncertainties in the legal treatment of smart legal contracts by including express terms aimed at addressing them, for example clauses allocating risk in relation to the performance of the code, and setting out clearly the relationship between any natural language and coded components. See our briefing for details. The Commission identified deeds and private international law as the two areas where further work is required to support the use of smart contract technology in appropriate circumstances. A project on conflict of laws and emerging technology will start in 2022. The Commission says that the problem of digital location, i.e. the difficulty of ascribing real-world locations to digital actions and digital objects, is among the most significant challenges that private international law will have to overcome in relation to emerging technology, including smart legal contracts.

• A proposed new law will require manufacturers, importers and distributors of digital tech which connects to the internet or other products to make sure they meet tough new cyber security standards – with fines of up to £10 million or up to 4 per cent of global revenue for those who fail to comply. The Product Security and Telecommunications Infrastructure Bill was introduced to Parliament on 24 November 2021. See the press release. Walker Morris will monitor and report on developments.

• The government announced that IT service providers could be required to follow new cyber security rules such as the National Cyber Security Centre’s Cyber Assessment Framework as part of new proposals to help British businesses manage the growing cyber threat. The government’s response to a recent call for views on enhancing the security of digital supply chains and third party IT services shows there is industry support for developing new or updated legislation, with 82 per cent of respondents agreeing that it could be an effective or a somewhat effective solution. The government says it will now develop more detailed policy proposals and is currently carrying out a review of the laws and measures which encourage firms to improve their cyber security. It will launch a new national cyber strategy later this year.

• In yet another data breach case, the High Court gave strong guidance that pursuing low value or exaggerated claims constitutes an abuse of process and is “simply unacceptable”. This is the latest in a run of cases which look set to stem the flow of trivial or meritless data breach claims brought by individuals against businesses. See our briefing for details.

• The Information Commissioner’s Office has published clear data protection standards that companies must meet to safeguard people’s privacy online when developing new advertising technologies (‘adtech’). The ICO says that the standards come as a warning to companies designing new methods of online advertising that they must comply with data protection law and stop the excessive collection and use of people’s data.

• The UK’s tech minister led the annual Digital Nations summit, where digital ministers from ten governments agreed to continue to use digital tech to reduce the environmental impacts of government, narrow digital divides, and build trust in digital government services by putting safeguards in place on human rights, data protection, data and AI ethics and transparency.

• In his recent speech to business leaders, the Prime Minister announced that new homes and buildings such as supermarkets and workplaces, as well as those undergoing major renovation, will be required to install electric vehicle charge points from next year, under new legislation.

• The Financial Conduct Authority reported on its recent Sustainability TechSprint, which focused on building technological solutions to overcome challenges faced by regulators in monitoring ESG data and disclosures from regulated firms and listed issuers. The solutions developed ranged from a tool to help verify companies’ carbon offsetting programs to one that helped develop a sustainable investment label using an impact score. The FCA said that the level of engagement and discussions over the course of the TechSprint reinforced the importance of placing ESG considerations at the heart of financial decision making and taking brave, innovative steps towards tackling these challenges collaboratively.

• WhatsApp is rewriting its privacy policy following the record €225 million fine received from Ireland’s data privacy watchdog for severe and serious infringements of the EU General Data Protection Regulation.

• The European Data Protection Board adopted a statement on legislative proposals forming part of Europe’s digital and data strategies. These include a Regulation on a European approach for AI. The EDPB is concerned that, without further amendments, the proposals will negatively impact the fundamental rights and freedoms of individuals and lead to significant legal uncertainty that would undermine both the existing and future legal framework. As such, the proposals may fail to create the conditions for innovation and economic growth envisaged by the proposals themselves. The European Commission previously announced that it was investing nearly €2 billion to bolster Europe’s technological sovereignty and bring digital solutions to market for the benefit of citizens, public administrations, and businesses.

• Luke Jackson from our dedicated Technology & Digital Group has been discussing why IP and AI will be integral to the factory of the future and explains who really owns the clever data.

…and in other news

• El Salvador’s president plans to build a Bitcoin city at the base of a volcano, with the cryptocurrency used to fund the project. The country recently became the first to introduce Bitcoin as legal tender. In contrast, India appears to be on the verge of banning private cryptocurrencies ahead of its central bank launching an official digital currency.

• Cosmetics retailer Lush announced that its global brand will be turning its back on Instagram, Facebook, TikTok and Snapchat, until the platforms take action to provide a safer environment for users. The company said that its resolve “has been strengthened by all the latest information from courageous whistleblowers, which clearly lays out the known harms that young people are exposed to because of the current algorithms and loose regulation of this new area of our lives”.

• A number of unfortunate Tesla drivers were left ‘locked out’ of their cars after a glitch caused the supporting phone app to go offline. Those carrying the backup keycard were able to continue operating their electric vehicles.

• Manchester City suspended its partnership with 3Key Technologies just days after announcing the deal. This development comes after concerns were raised over the legitimacy of the company, a “decentralised finance trading analysis” partner with seemingly zero digital footprint. In the same week FC Barcelona cancelled its partnership with NFT marketplace Ownix after a consultant linked to the company was arrested. Both perhaps represent a timely reminder of the importance of thorough due diligence to businesses seeking to get ahead of the curve with crypto-partnerships.

• British electric truck company Tevva announced that it has secured $57 million in funding to put electric and hydrogen trucks on the road in 2022. First deliveries of its third-generation vehicle are scheduled from Q3 2022 to address the immediate industry need to electrify.

• In a wide-ranging speech following the COP26 summit in Glasgow, the Prime Minister set the ambition that the UK will aim to build the first general purpose quantum computer, and secure fifty percent of the global quantum computing market by 2040: “…if we could perfect it there are so many problems we could solve: including how to turn nitrogen into fertiliser and feed the world without creating so much C02”.

• And finally, in a sign of the times, NFT or non-fungible token is Collins Dictionary’s word of the year. “Crypto” and “metaverse” also made it onto the list of new words.