Tech Round-Up: October 2023

Welcome to our latest round-up, where we provide a snapshot of the latest legal-tech-related news.

This round-up covers topics such as the Online Safety Bill, ICO employee monitoring guidance, a CMA investigation into the cloud market and more.

• The highly anticipated Online Safety Bill (OSB) is set to receive royal ascent shortly and finally become law. The OSB aims to make the UK the safest place in the world to be online, and Ofcom has stated that it will now "consult on the first set of standards it expects tech firms to meet in tackling illegal online harms including child sexual exploitation, fraud and terrorism".
• Ofcom has referred the UK cloud market to the Competition and Markets Authority (CMA) following an initial study, which identified features making it difficult for UK businesses to switch and use multiple cloud suppliers and also raised particular concerns around the dominant positions of Amazon and Microsoft as leaders in the £7.5 billion cloud services market. Following the referral, the CMA has now launched an investigation into the supply of public cloud infrastructure services in the UK and recently published the investigation.

• Less than two months after its announcement, the new EU-US Data Privacy Framework has already been in court facing a challenge from French MP Philippe Latombe. The challenge was based on concerns around US mass surveillance and that it was notified to EU countries in English only and not published in the Official Journal. On 12 October 2023, the EU General Court dismissed the challenge on the basis that it had not established the existence of serious and irreparable harm either on an individual or a collective basis. The UK government has now assessed the UK Extension to the Framework as providing an adequate level of data protection. The UK-US data bridge came into force on 12 October 2023.
• Following its initial decision to block the deal, the CMA has now approved Microsoft's deal to buy Activision after Microsoft made a concession that will see Ubisoft (instead of Microsoft) buy Activision's cloud gaming rights. The restructured deal will prevent Microsoft from locking up competition in cloud gaming as this market takes off, preserving competitive prices and services for UK cloud gaming customers. Sarah Cardell, CMA Chief Executive, had a stern message for businesses and their advisers, stating that "the CMA won't be swayed by corporate lobbying" and that "the tactics employed by Microsoft are no way to engage with the CMA ".

• Following indications that X (formerly Twitter) is being used to spread illegal content and disinformation, and in particular violent content and hate speech, the European Commission (EC) has formally issued a request for information under the Digital Services Act (DSA). This appears to be the first time that the EC has formally requested information from a Very Large Online Platform (VLOP) and will be investigating X's compliance with the DSA, including its policies and practices regarding notices on illegal content, complaint handling, risk assessment and measures to mitigate the risks identified. X must provide information about the activation and functioning of its crisis response protocol by 18 October 2023 and the rest of the requested information by 31 October 2023. The EC can impose fines for the provision of incorrect, incomplete or misleading information. If X fails to reply, the EC can request information "by decision", in which case a failure to reply could lead to periodic penalty payments.
• On 13 October 2023, the EC issued a survey asking for views on the eleven draft guiding principles for organisations developing advanced artificial intelligence systems, which aim to promote the safety and trustworthiness of the technology. The feedback received from interested stakeholders will contribute to discussions to finalise the guiding principles and the development of a voluntary international Code of Conduct for AI developers, to be endorsed by the G7 leaders this year.

• On 17 October 2023, the UK Jurisdiction Taskforce (UKJT) published a consultation paper offering guidance on the application of English insolvency law principles to digital assets. The latest consultation paper seeks responses from the legal, digital and insolvency sectors on aspects such as (i) whether digital assets constitute property under insolvency legislation, (ii) what rules apply to determine where digital assets are located and administered in an insolvency and (iii) whether there are any difficulties in the application of insolvency legislation relating to avoidance of prior transactions to pre-insolvency dealings with digital assets. Responses to the consultation will assist the UKJT in publishing a legal statement, which it intends to do in early 2024. The UKJT intends to host a public event to discuss the consultation on 28 November 2023.
• The Information Commissioner's Office has published guidance for employers to ensure lawful monitoring in the workplace after research revealed that 70% of the public would find it intrusive to be monitored by an employer and only one in five people would feel comfortable taking a new job if they knew that their employer would be monitoring them. The new guidance is aimed at employers across both the public and private sectors and provides clear direction on how monitoring can be carried out lawfully, fairly and in accordance with data protection law.