REGULATION: ROAD AHEAD
details of automatic means used for content moderation, disputes, advertising transparency such as identifying the sponsors of advertisements, and transparency of the main parameters used in recommendation systems.
Transparency reporting as proposed in the DSA is similar to transparency reports that US-based technology companies began issuing around 2014, when they won the right to publish reports on the volume and type of national security requests they receive.
In the US, the SAFE TECH Act announced in February 20217
Its central proposition is that social outlines amendments to
Section 230 of the Communications Act of 1934.8
media platforms should have accountability for certain types of content; for example, if promoting paid advertising that was harmful.
Antitrust The EU published the draft of the Digital Markets Act in December 2020.9
This
proposed regulation will focus on the largest digital platforms to calibrate competitive and bargaining powers. Those entities coming within its auspices will be subject to requirements that include no combining of personal data from different (related) platforms without consent; no restrictions on users who want to switch to third-party apps and services despite using the platform’s operating system; and data portability.
China published the final version of the Anti-Monopoly Guidelines for the Platform Economy10
in February 2021.11 These
guidelines support regulators in applying restraints on internet platforms engaging in monopolistic practices. They define in-scope platforms and identify four types of antitrust activity, including abuse of a dominant market position and using administrative power to restrict competition.
Data sovereignty India’s authorities have consulted on the proposed Non-Personal Data Framework since publication of the draft in July 2020.12 This comprehensive framework covers anonymised personal data and aggregated data created and collected in India. It would govern “inextricably linked” personal and non-personal data, an expanded definition of what constitutes data business, the
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The European Commission published a new EU Cybersecurity Strategy in December 2020
concept of “high-value datasets”, and proposed public, community and private non-personal data classification to guide the level of compliance. Data transfer across borders could potentially be impacted. The Framework also introduces new roles and responsibilities, including those for data custodians and data trustees.
In 2020, China proposed a global initiative on data security, regarded as a counterproposal to the US’s Clean Network coalition-based initiative to address ongoing threats to data privacy, security and confidential information from aggressive intrusion. The Chinese proposal called on states to “foster an open, fair and non-discriminatory business environment”, and suggested that countries should “stand against ICT activities that impair or steal important data of other states’ critical infrastructure”. How both initiatives by the world’s two largest economies subsequently develop will be important for industries and businesses.
In the landmark Schrems II judgment, the Court of Justice of the European Union invalidated the EU-US Privacy Shield framework, and ruled in favour of stricter requirements for the transfer of personal data that uses standard contractual clauses.13
As a result, companies in the
EU cannot legally transfer data to US- based companies through the Privacy Shield framework. An EU Parliamentary publication14
had previously highlighted
concerns regarding “cryptanalytic and quantum computing” impacts on encryption effectiveness.
In January 2021, ASEAN launched the ASEAN Model Contractual Clauses (MCC) for Cross Border Data Flows.15
Recognising
the different development stages of ASEAN member states, the MCC is a voluntary
scheme that provides a standard for ASEAN private sector companies to follow when it comes to the transfer of personal data.
‘Splinternet’ impact Such related regulatory initiatives are far-reaching. In the foreseeable future, they include the fortification of jurisdiction boundaries through a country’s exercise of greater autonomy over its part of the global internet, and the cyberspaces of China, India, Europe, the US, and even ASEAN are becoming distinctive. What in 2010 The Economist first dubbed the “Balkanisation of the internet” through regulations – also called “cyber-Balkanisation” and “splinternet” – is becoming more visible today.
This trend will extend to the operating models of businesses, including cross- border scalability, and back-up and recovery planning. For example, uses of application programming interfaces across jurisdictions and the data that can be pulled, processed and stored can be affected. Machine learning training needs to factor in potential gaps in data sets, while cross-border uses of distributed ledger technology for financial activities and digital asset transactions can run into complex legal and regulatory matters.
Businesses’ policies, processes, systems and standards will need to be continuously updated in line with digital operational resilience regulations, and overlapping extraterritorial reaches. The heavy penalties for non-compliance will necessitate informed attention from C-suite executives.
*Regulatory updates as at 31 March 2021.
Sources 1
See
https://bit.ly/3dHvYwT at
ctc.usma.edu 2 See
https://bit.ly/3tNNlly at
rm.coe.int 3 See
https://bit.ly/2PKOwnQ at
csrc.gov.cn 4 See
https://bit.ly/2OwLumO at
ec.europa.eu 5 See
https://bit.ly/3sZstIr at
europol.europa.eu 6 See
https://bit.ly/39NCGQE at
ec.europa.eu 7 See
https://bit.ly/3fQpDSj at
warner.senate.gov 8 See endnote 7
9 See
https://bit.ly/3dzIdve at
ec.europa.eu 10 See
https://bit.ly/3d0vkeY at
lexology.com 11 See
https://reut.rs/3fSJbFM at
reuters.com 12 See
https://bit.ly/3wzhJTk at
lexology.com 13 See
https://bit.ly/2OsEeIt at
europarl.europa.eu 14 See endnote 13
15 See
https://bit.ly/3rUBXmX at
asean.org
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