Taso Advisory's Managing Director, Ben Greenstone, was quoted in POLITICO Europe on the extraordinary powers given to the Secretary of State for Digital, Culture, Media and Sport in the UK Government's proposed Online Safety Bill.

Ben said "The draft Online Safety Bill gives the secretary of state for digital a remarkable, and I think unprecedented, power to direct an independent regulator. This leaves business with serious uncertainty: the rules can change based on the whims of one politician.”

You can read the full article by Annabelle Dickson here.

What are the drivers 

The European Commission’s Directorate General for Competition (‘DG COMP’) launched its sectory inquiry into IoT in July 2020 focused on smart speakers, wearables and home appliances. The inquiry did not come out of nowhere, and followed suspicions of market distorting behaviour including: restrictive data access policies, limited interoperability between ecosystems, forms of self-preferencing and the use of proprietary standards to block market entrants. DG COMP was also examining Google’s acquisition of the smartwatch producer Fitbit at the time.  

Consumer IoT devices are being scrutinised for several reasons. One is that they are an emerging gateway for consumers to interact with the digital economy. This is particularly true of how IoT devices are used to access subsequent services which themselves are immensely popular among consumers. The sector is still in the early stages of development but the interim report found that providers of services accessed through IoT devices overwhelmingly offer creative content such as music or video (51%), followed by shopping (22%) and search (22%). 

Another reason is the prevalence of IoT devices and/or voice assistants from a select group of companies and the extent to which they use IoT to feed into other areas of their business. The position of the likes of Amazon, Google and Apple are an important consideration as IoT devices form part of their suite of digital services available for consumers and data collection points to inform their other verticals, like advertising. 

Lastly, IoT depends on a system of connected devices communicating seamlessly to deliver the insights and benefits promised with an IoT world. This requires interoperability, data flows and accessibility between devices - which can be undermined without the right policy frameworks in place. 

Main findings

The interim report sets out some initial concerns for the European Commission based on submissions to the inquiry.  These are preliminary and will certainly develop, yet they do give a picture of the main avenues of interest. 

Standards

A lack of interoperability between IoT devices, due to a lack of frameworks and de facto standards from large players is emerging as a result of proprietary technologies. Brands play a strong role here, in creating an ecosystem of devices with the potential for lock-in of users into products or services. However, note is made of the fact that de facto standards from a select group of companies are not always a downside, and enable efficiencies by avoiding too many fragmented approaches. 

Interoperability 

Another concern is whether producers of devices or voice assistants are in effect promoting their own ancillary products by limiting the functionalities of third-party devices and consumer services compared to their own by imposing technical constraints, such as limited APIs. Furthermore, it has been observed that smaller players have less bargaining power when negotiating interoperability frameworks, potentially leading to distortions and barriers for new entrants to compete.

Data

The interest here is where data is controlled or limited, so that providers of services through IoT devices (like apps or streaming), or third-party device manufacturers (like smart TVs), receive limited access to data on consumers’ interaction with their services. Another area of inquiry is how data is combined by large tech companies to drive their advertising models, as well as the scale of data required for new entrants to build and then train IoT systems such as voice assistants.  

Pre-installation and default settings

Devices can have pre-installed services or settings which favour voice assistants or content providers of certain companies. This can lead to competitive advantages and limit the ability for competitors to challenge established providers, as users are not setting up the services that they want to receive through the device. An explanation is given here on how users tend to make requests, such as “tell me the weather”, rather than specifying where they would like to get the information from, giving pre-installed services an advantage. 

Exclusivity 

Some voice assistant providers are ensuring that only their systems are available on certain devices, or tying these together with other offerings from the same provider. 

Disintermediation

The interest here is over who controls the relationship with the user, with some service providers taking issue with disintermediation by voice assistants or device operating systems. Some have found that they lose their brand recognition and their direct relationship with the user. 

The implications 

Sector inquiries are thorough and can unearth all sorts of information leading to extensive policy interventions. For example, an inquiry into e-Commerce which began in 2015 led to bans on the use of certain most favoured nation clauses and eventually led to the introduction of the ‘Platform to Business Regulation’ and by extension elements of the upcoming Digital Services Act.

The sector inquiry will provide the European Commission with a wealth of information when assessing anti competitive behaviour. The work is not over, and it will feed into broader discussions at EU level about competition in digital markets, not least through the proposed Digital Markets Act. 

Moving away from competition policy, there are complex questions on how the wider IoT sector develops interoperability and an open set of standards. Standards are key for IoT - they get to the heart of how devices connect when it comes to device communication and data portability. But there is not a comprehensive framework in place. Corporates that can offer contributions to this puzzle are in a strong position to shape the debate and offer solutions to policy makers. 

Next steps

Taso Advisory supports clients with the political, policy, and regulatory challenges they face. We work with several large technology businesses to monitor and engage with European policy developments. 

For a confidential discussion about how we can support your public policy and public affairs work on IoT please get in touch by emailing [email protected] or by calling +44 (0) 20 3488 4489.

The Online Safety Bill will mean a new duty of care for tech companies, impacting almost all those that allow users to interact online. The Bill has been years in the making, is one of the first attempts to regulate online content in the world, and the issues it seeks to address are complex.

Please complete the form on the side of this page for a free copy of the Taso Advisory briefing document on the provisions in the draft Bill.

Taso Advisory hosted a webinar debate on the draft Online Safety Bill where we discussed the initial questions that it raises and how it will fare in Parliament once it is formally introduced. 

Our panel discussed:

  • Who the main interest and political groups are that support or oppose the Bill and their concerns. 
  • What clarifications are needed, including: scope, definitions, powers granted to Ministers and which companies are in scope. 
  • Where tensions will arise as the Bill passes through Parliament and what Members of Parliament and Peers will be looking out for. 
  • How the Bill fits into international efforts to deal with illegal or harmful content. 

Our panelists for the event were:

  • Ben Greenstone, Founder and Managing Director of Taso Advisory (Chair)
  • Margot James, Former Minister for Digital and Creative Industries
  • Darren Jones MP, Chair of the Business, Energy and Industrial Strategy Committee
  • Poppy Wood, Senior Advisor, Reset.Tech

To access a recording of the session please click here.

Please get in touch if you would like to discuss how the Online Safety Bill will impact your business, the opportunities to engage, and how Taso Advisory can help.

Taso Advisory works with leading technology businesses and groups to manage the political, policy, and regulatory challenges they face, helping them to design and deliver credible responses to mitigate risks and seize opportunities. We make complex challenges simple, give actionable advice, and support in delivery. 

For a confidential discussion about how we can support your public policy and public affairs work please get in touch by emailing [email protected] or by calling +44 (0) 20 3488 4489.

    SUMMARY

    CONTEXT

    The European Union’s (EU) relationship with the US is back on track - at least for now. Over the past months there have been appointments, visits and meetings which draw the Biden administration closer to the EU. This is in stark contrast to recent years. On the environment, digital policy and taxation, US officials are speaking closely and sometimes like-mindedly with their European counterparts.

    Some of the commentary on recent changes in the US has raised how radically different Washington’s approach is. Whilst this is true in comparison to the previous administration, some of these changes are simply catching up with the debate. The EU’s positions are helpful indicators to see where the US could end up. 

    COMPETITION POLICY

    Lina Khan - who has advocated for a reformulation of tech antitrust rules - has been nominated as Commissioner of the Federal Trade Commission and Tim Wu - a prominent and outspoken tech critic - has joined the White House National Economic Council. These have been cast by some as a world change. 

    It is certainly true that their appointments are significant. But many of their views are already quite mainstream in Europe. Wu’s refrain that “When an online service is free, you’re not the customer. You’re the product” is often repeated in Brussels competition circles, including by European Commission Vice President Magrethe Vestager. Khan’s advocacy for reconceiving consumer harm, whilst novel, was also picked up in advisory groups to the likes of the European Commission and are certainly part of the debate.

    So what next for the US as it moves closer to the EU’s view on antitrust? First would be greater scrutiny of individual big tech companies. The European Commission has investigated all GAFA companies in the last ten years and continues to lead in the area. In the US, there are signs of closer attention like the FTC’s case lodged against Facebook but there are plenty more rocks to look under. 

    Second would be more bespoke rules for big tech. If the EU’s experience is anything to learn from, the technicalities and delay of enforcing existing antitrust rules may not satisfy the political will for action. The next step would be regulatory intervention along the lines of the EU’s proposed Digital Markets Act, which will put in place ex ante rules to try and boost competition in digital markets.  

    ENVIRONMENT

    Similar conclusions can be drawn from US changes toward climate change. President Biden’s decision to rejoin the Paris Climate Accord was an important and symbolic first step. Second was the commitment to multilateral efforts to drive cooperation with the appointment of John Kerry to lead a diplomatic front. 

    One challenge for the US is what to do if diplomacy does not deliver. There may be a temptation to adopt a different approach. The EU’s experience saw it take matters into its own hands, making climate policy a flagship area with initiatives like the Green New Deal and Carbon Border Adjustment Plan to try and incentivise others to follow their lead. These were pursued partly because the EU was alone during President Trump’s America and diplomacy stalled. If diplomacy comes up short then the US may use other instruments like trade policy.

    DATA AND PRIVACY

    Turning to tech regulation, the US is also playing catchup and is unlikely to want the EU to lead the way in setting a global approach as they did with the General Data Protection Regulation. Regardless of the assessment of whether GDPR was a success, it was a first step and has been emulated in other jurisdictions. .

    It remains to be seen how the US approaches the next big tech regulation dilemmas currently being dealt with in the EU. The European Commission’s proposed Digital Services Act takes a swipe at content moderation, whereas the US is still relatively behind debating whether in principle s230 should be repealed or reformed. Similarly, the European Commission is expected to publish rules for Artificial Intelligence in April with little to show for a US approach of the same breadth. In both cases, the US has ground to catch up. It may be that the US believes that existing rules are adequate. If they don’t, then they will need to cover matters which the EU is working on like explainability and liability in AI, free speech vs content moderation, and responsibilities for those operating online. 

    CONCLUSION

    As the new US administration gets up to speed there remains a lot to be considered from the EU’s work on areas from antitrust, climate change and big tech regulation. The EU’s experience in these areas gives some indication of where the US could go and what could follow. Each has their own politics and mindsets. But the US does not need to do much head scratching to see what issues may present themselves. 

    Taso Advisory supports clients with the political, policy, and regulatory challenges they face, and helps them to design and deliver credible responses to mitigate risks and seize opportunities. We make complex challenges simple, give actionable advice, and support in delivery. You can find out more about what we do and who we work with.

    For a confidential discussion about how we can support your public policy and public affairs work please get in touch by emailing [email protected] or by calling +44 (0) 20 3488 4489.

    KEY POINTS

    AI.jpg

    THE CONTEXT

    An independent review entitled ‘Growing the Artificial Intelligence Industry in the UK,’ carried out by Dame Wendy Hall and Jerome Pesenti, was published in October 2017. The report was jointly commissioned by DCMS and BEIS, and made a series of recommendations related to data accessibility, developing AI expertise and building research. It also recommended that an AI Council be set up to “promote growth and coordination in the sector.” 

    The Industrial Strategy, published in November 2017, set out a long-term plan to boost productivity in the UK, and identified AI as one of its key pillars. This led to the AI Sector Deal, which was published in April 2018. This committed roughly £1 billion from both the Government and industry to encourage AI research, development and adoption in the UK. The Office for AI, which sits jointly under DCMS and BEIS, was set up to implement the Deal and is responsible for overseeing implementation of the AI and Data Grand Challenge. The AI Council was set up following the AI Sector Deal and experts were appointed to the Council in May 2019. The AI Roadmap is its first major report. 

    THE CONTENT

    The AI Roadmap sets out recommendations across three main pillars largely echoing the Hall-Pesenti Review. These are:

    1. Research, Development and Innovation — recommendations include “sustainable public sector investment in AI” as well as “regional investments that draw on strengths from across the UK.”
    2. Skills and Diversity — recommendations include the commitment to “achieving AI and data literacy for everyone.”
    3. Data, Infrastructure and Public Trust — recommendations include “consolidating and accelerating the infrastructure needed to increase access to data for AI,” “leading the development of data governance options and its uses,” and “ensuring public trust through public scrutiny.”

    The final section of the Roadmap outlines more specific measures to boost AI take up in healthcare, climate change, and defence.

    KEY TAKEAWAYS

    The Roadmap makes a strong case for further AI investment in the UK, and argues the importance of making the UK a leading centre for the development of AI. The most interesting contents of the Roadmap from a regulatory standpoint, however, come under the ‘Data, Infrastructure and Public Trust’ pillar. Although the Roadmap takes a very pro-AI stance, it argues that this growth should not come without safety, security, and public scrutiny on AI uses across the economy. Accordingly, it calls for:

    The Roadmap notes that one of the major obstacles to successful growth will be “public scepticism and lack of widespread legitimacy,” and also makes a series of recommendations to build public trust of AI and data usage, including:

    The focus on public trust hints that data ethics will take a central role in future policy conversations about AI development, use, and growth more broadly (find out more about data ethics in our previous blog). 

    NEXT STEPS

    The Roadmap will inform future Government policy relating to AI, including the likely development of a National AI Strategy. AI is a major policy priority for the Government as it plans how best to leverage new and emerging technologies for post-pandemic economic recovery. As such, there is wide scope for corporate engagement in this area to share industry views on the recommendations of the report with policy makers, and work with them to shape future policy.

    Taso Advisory supports clients with the political, policy, and regulatory challenges they face, and helps them to design and deliver credible responses to mitigate risks and seize opportunities. We make complex challenges simple, give actionable advice, and support in delivery. You can find out more about what we do and who we work with.

    For a confidential discussion about how we can support your public policy and public affairs work on AI please get in touch by emailing [email protected] or by calling +44 (0) 20 3488 4489.

    The proposed Digital Services Act will have significant implications for digital markets in the EU and will apply to almost all operating online. It covers matters such as removing illegal content, transparency on ranking parameters, collecting minimum information on sellers through a platform, and advertising. 

    Please complete the form on the side of this page for a free copy of the Taso Advisory briefing document on the provisions in the proposed Regulation and what it means for businesses.

      The Government's work on Online Harms will mean a new duty of care for tech companies, impacting almost all those that allow users to interact online.

      Following the publication of this response, the Government will bring forward a Bill in one of the first attempts to regulate online content in the world.

      Please complete the form on the side of this page for a free copy of the Taso Advisory briefing document on the Final Government Response.

        SUMMARY

        The Government is consulting on a total ban of online adverts for products high in fat, salt and sugar (HFSS).

        The proposed ban comes as part of the Government’s obesity strategy and after the statement of intent to introduce a 9pm watershed on HFSS advertising both on television and online.

        The consultation is open for responses until the 22nd December 2020, with measures coming into force by the end of 2022. 

        CONTEXT

        In early 2019 the Government launched a consultation on further advertising restrictions for products high in fat, salt and sugar. That consultation closed in June 2019 and the Government is yet to publish its formal response. 

        The Government did, however, announce in their obesity strategy of July 2020 that they intend to ban HFSS adverts being shown on TV and online before 9pm. The Government said that it “wanted to go further online”. This consultation asks the questions on going further via a total ban of online advertising for HFSS products. 

        The Government is keen to be seen as proactive and tough on obesity. This is partly because the UK is particularly obese - two thirds of adults are overweight, with one third being obese - and partly because of the link between obesity and coronavirus mortality.

        WHAT’S IN THE CONSULTATION?

        The consultation is clear that a total ban of HFSS advertising online is the Government’s preferred option. 

        Rationale

        The broad aim is to reduce the HFSS advertising seen by people, and particularly by children (hence the 9pm watershed). The rationale for a total ban online is to “futureproof” the policy against changing media habits, account for a lack of transparent and independent data, and address issues with the way that adverts would be targeted away from children.

        The Government is particularly concerned about repeated inadvertent breaches of the rules, citing evidence that 95% of YouTube channels aimed at children have served HFSS adverts. The consultation considers targeting, and associated audience-based restrictions, to be too likely to fail. It is this assumption primarily that leads to the conclusion that the most workable solution is a total ban, rather than a watershed or similar. 

        Scope

        The consultation’s defined scope of online advertising is drawn about as broadly as it could be, covering search, in-game advertising, email marketing, advertorials and much more. It goes so far as to suggest that advertisers selling an HFSS product, or which are “synonymous with HFSS products”, should ensure that their own social media posts are only found by users “actively seeking them”. 

        The consultation proposes exempting broadcast video on demand from this total ban because of new audience measurement of the same quality and dependability as linear television. If the online advertising were able to offer sufficient comfort to the Government on measurement, it appears there would be room for a watershed rather than a total ban. 

        Enforcement

        The consultation proposes a new “statutory backstop” regulator to work alongside the Advertising Standards Authority. This statutory regulator would be able to levy fines and other civil sanctions for repeated breaches, as well as potentially being able to require evidence of compliance and processes from businesses in scope.  

        The consultation also considers whether other actors (potentially including advertising platforms and others) should have some responsibility for the advertising that they serve which breaches the restriction, and whether a notification and takedown regime could be introduced.

        WHAT’S NEXT

        The consultation is open for responses until 22/12/20. It will be an uphill battle for the industry considering the Government’s stated intent to go further and their naming of a total ban online as the preferred option.

        But not responding leaves online advertising businesses, as well as businesses that advertise online, hugely exposed to a major regulatory event. Businesses that will be impacted should look to respond to the consultation with strong evidence and clear arguments. 

        Taso Advisory supports clients with the political, policy, and regulatory challenges they face, and helps them to design and deliver credible responses to mitigate risks and seize opportunities. We make complex challenges simple, give actionable advice, and support in delivery. You can find out more about what we do and who we work with.

        For a confidential discussion about how we can support your public policy and public affairs work on proposals to ban online advertising of HFSS products, or more broadly, please get in touch by emailing [email protected] or by calling +44 (0) 20 3488 4489.

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