UK law
DRCF publishes new report on consumer use and understanding of generative AI
The DRCF has published a new report on consumer perceptions of and responses to benefits and risks of generative AI in financial services, and consumer appetite for future use of generative AI including the impact of regulation and warnings on trust and receptiveness to use. The report found that consumers have some awareness of generative AI but few of them have a deep understanding of how it works or how it is different from other AI. Consumers are concerned about risks, and tend to use “signifiers” as short cuts to decide how much they can trust generative AI in different contexts. These signifiers include human oversight; a well-known provider offering the tools; use cases feeling recognisable and routine (as opposed to novel); and not being asked for large volumes of personal data. Consumers tend to assume regulation is in place if using generative AI in financial services settings, and expect organisations deploying generative AI tools to be accountable if things go wrong. Warnings and messaging can increase consumers’ sense of personal responsibility. The report will inform the CMA’s Foundational Models Review and the FCA’s overall approach to the regulation of AI, as well as informing further joint DRCF research.
DSIT announces restructuring aimed at better public service delivery
The Department for Science, Innovation and Technology has announced that it will plans to expand significantly, both in its scope and size. It will bring together experts in data, digital technologies, and artificial intelligence from various government bodies, including the Government Digital Service, the Central Digital and Data Office and the Incubator for AI. This aims to unite efforts towards the digital transformation of public services under a single department; and to drive the digital transformations necessary to overhaul the British public’s experience when interacting with the government. DSIT will work closely with the Cabinet Office and the Treasury to maximize the potential of digital technologies, data, and innovation in delivering services to the British public.
Ofcom assesses BBC’s materiality of proposed new streams on BBC Sounds
Ofcom has published its review of the BBC’s assessment of whether its proposals for three new music streams on BBC Sounds constitute “material changes” to its public service activities. The BBC must assess if proposed changes may have a significant adverse impact on fair and effective competition. In this case, the BBC concluded that its proposed new music streams on BBC Sounds not material changes. Ofcom has reviewed this and does think the planned launch of the Radio 2 extension stream on BBC Sounds may have a significant adverse impact on fair and effective competition. Therefore, BBC must stop conducting this aspect of its proposals. If the BBC wants to launch the Radio 2 extension Sounds-only stream, it will need to conduct a public interest test (PIT). The BBC Sounds streams are different from the BBC’s ongoing PIT on four planned new DAB+ radio stations (two extensions of Radio 1, as well as Radio 2 and Radio 3 extensions). Once Ofcom receives the BBC’s PIT, it will carry out a competition assessment within six months, to decide if the BBC may proceed with these changes.
Patents Court rules out interim licence in FRAND proceedings
In Panasonic Holdings Corporation v Xiaomi Technology UK Ltd and others [2024] EWHC 1733 (Pat) the Patents Court considered an application by the defendants (Xiaomi) in a case involving standard essential patents (SEPs) owned by the complainant (Panasonic). Xiaomi wanted a declaration that under the ETSI IPR Policy, Panasonic should grant Xiaomi an interim licence pending an October 2024 hearing to decide the terms of a FRAND licence for these SEPs. Panasonic had brought SEP infringement claims against Xiaomi in the German federal courts and in the Unified Patent Court in Munich under which the German court might issue an injunction before the UK. The ETSI IPR Policy is governed by French law. Leech J held that the SEP holder’s obligation under the ETSI IPR Policy was to make an offer on FRAND terms which were capable of acceptance and that a licence would not come into existence unless or until the implementer accepted those terms or the court had determined what terms were FRAND. The court could not order specific performance of such a contract unless or until the court had fixed the terms of the court-determined licence. The judge said that granting a declaration served no useful purpose and would be “jurisdictional imperialism”. It was not the place of the UK court to tell the German courts how they should interpret a French law policy.
CMA consults on statement of policy on administrative penalties
The CMA is consulting on an updated version of its approach to administrative penalties. The consultation document sets out the CMA’s powers to impose penalties for breaches of requirements imposed in investigations under various CMA functions as well as for breaches of remedies imposed in respect of the CMA’s competition, markets and mergers cases. It is an updated version of the existing policy that reflects developments in CMA practice, as well as legislative developments since 2014, including the Digital Markets, Competition and Consumers Act 2024. The updated draft also addresses some of the penalties that can be imposed for breaches of certain investigative and remedy requirements under the new digital markets competition regime. The CMA’s statement of policy on penalties under the digital markets competition regime is covered in the separate Guidance on the Digital Markets Competition Regime, which is also currently subject to consultation. The CMA must produce a statement of policy in relation to such powers, which must be approved by the Secretary of State before it can be published.
IPO announces first filing in new digital service
The IPO has announced that the first patent application has been successfully filed on the new fully digital “One IPO” patents service. The IPO also introduced its new AI-powered patent allocation tool, which reduces the time taken to get the patent application to the right team from 14 days to a matter of seconds. This enables a more streamlined and efficient service. The IPO is also extending its pilot of the new service, where some customers are given early access to test and give their feedback ahead of the expected launch to all patents customers in early 2025.
ICO issues reprimand to Hackney Council
The ICO has issued a reprimand to the London Borough of Hackney (Hackney) after hackers gained access to and encrypted files affecting at least 280,000 people, affecting at least 280,000 people. Hackney suffered a ransomware attack in 2020 when the attackers gained access via an account with an insecure password which had lain dormant since 2012. Hackney also failed to ensure that a security patch management system was actively applied to all devices.
The cyber-attack resulted in council systems being disrupted for many months with, in some instances, services not being back to normal service until 2022. The ICO says that this was a clear and avoidable error from Hackney, one that has resulted in a mass loss of data and has had a severely detrimental impact on many residents.
EU law
AI Act published in Official Journal
The EU’s AI Act has finally been published in the Official Journal. It comes into on force on the twentieth day following that of its publication in the Official Journal and applies from 2 August 2026, with some provisions coming into force on 2 August 2025 and 2027 respectively.
European Commission requests information to Amazon under the Digital Services Act
The European Commission has requested that Amazon provides more information on its measures to comply with the DSA obligations related to the transparency of recommender systems and their parameters, as well as the provisions on maintaining an ad repository and its risk assessment report. The Commission has asked Amazon to provide detailed information on its compliance with the provisions concerning transparency of the recommender systems, the input factors, features, signals, information and metadata applied for such systems and options for users to opt out of being profiled for the recommender systems. In addition, it has requested more information on the design, development, deployment, testing and maintenance of the online interface of Amazon Store’s Ad Library and supporting documents regarding its risk assessment report. The deadline is 26 July 2024, after which the Commission will assess the next steps. This could involve the formal opening of proceedings under Article 66 of the DSA. Under Article 74 (2) of the DSA, the Commission can impose fines for incorrect, incomplete, or misleading information in responses. If a company fails to respond at all, the Commission may issue a formal request by decision. In this case, failure to reply by the deadline could lead to the imposition of periodic penalty payments. Following its designation as a Very Large Online Platform and the CJEU’s decision to reject Amazon’s request to suspend the obligation to make its advertisement repository publicly available earlier this year. Amazon must comply with the full set of DSA obligations. This includes identifying and assessing all systemic risks relevant to its service, providing an option in their recommender systems that is not based on user profiling, and have an advertisement repository publicly available.
European Commission designates adult content platform XNXX as Very Large Online Platform under the Digital Services Act
The European Commission has formally designated XNXX as a Very Large Online Platform (VLOP) under the Digital Services Act. XNXX is an adult content platform with an average of more than 45 million monthly users in the European Union. This user number, which XNXX has communicated to the Commission, is above the DSA threshold for designation as a VLOP. Following today’s designation as a VLOP, XNXX will have to comply with the most stringent rules under the DSA within four months of its notification (i.e. by mid-November 2024). Such obligations include adopting specific measures to empower and protect users online, to prevent minors from accessing pornographic content online, including with age-verification tools, to provide access to publicly available data to researchers, and to publish a repository of ads.
European Commission sends preliminary findings to X for breach of the Digital Services Act
The European Commission has informed X of its preliminary view that it is in breach of the Digital Services Act (DSA) in areas linked to dark patterns, advertising transparency and data access for researchers. If the Commission’s preliminary views were to be ultimately confirmed, the Commission would adopt a non-compliance decision finding that X is in breach of Articles 25, 39 and 40(12) of the DSA. Such a decision could mean fines of up to 6% of the total worldwide annual turnover of the provider, and it could order the provider to take measures to address the breach.
European Commission accepts commitments by Apple opening access to ‘tap and go’ technology on iPhones
The European Commission has made commitments offered by Apple legally binding under EU antitrust rules. The commitments address the Commission’s competition concerns relating to Apple’s refusal to grant rivals access to a standard technology used for contactless payments with iPhones in stores (“Near-Field-Communication (NFC)” or “tap and go”). The Commission concluded that Apple’s final commitments would address its competition concerns over Apple’s restriction of third-party mobile wallet developers’ access to NFC payments in stores for EEA iOS users. It therefore decided to make them legally binding on Apple.
Coimisiún na Meán launch consultation on revised Rules to improve Accessibility of Television Broadcasters
Coimisiún na Meán is consulting on draft Access Rules for Television Broadcasters. The revised Rules contain updated binding targets for Irish Sign Language, Subtitling and Audio Description services and are aimed at improving the accessibility of programming for people with disabilities. Once finalised, the Access Rules will apply to television broadcasters based in Ireland. Included in the draft Access Rules for consultation are best-practice Standards which require broadcasters to ensure that Irish Sign Language, Subtitling and Audio Description services are produced to a high quality. The draft Access Rules also provide for members of the public to complain to Coimisiún na Meán about any potential non-compliance by broadcasters with the Rules. The consultations end on 19 August 2024.
UNCITRAL adopts Model Law on Automated Contracting
The United Nations has announced that the United Nations Commission on International Trade Law (UNCITRAL) has adopted the UNCITRAL Model Law on Automated Contracting. The Model Law provides a legal framework to enable the use of automation in international contracts, including through the deployment of AI and smart contracts, as well as in machine-to-machine transactions. It is intended to complement and supplement existing laws on electronic transactions, particularly those based on other UNCITRAL electronic commerce texts, which have been enacted in over one hundred jurisdictions worldwide. The Model Law is the first legislative text to result from exploratory work conducted by UNCITRAL on legal issues related to the digital economy and digital trade, with work on data contracts and distributed ledger technology ongoing.
