In this insight, we look at the introduction of the Electronic Trade Documents Act 2023 (ETDA), what it means and why it’s so significant, plus its implications.

The ETDA 

The Electronic Trade Documents Act 2023 (ETDA), which was based on a draft Bill published by the Law Commission in March 2022, came into force in UK law on 20 September. This Act allows the legal recognition of trade documents in electronic form and crucially, allows an electronic document to be used and recognised in the same way as a paper equivalent. The type of trade documents it applies to include a bill of lading (a legal document issued by a carrier, or their agent, to a shipper, acknowledging the receipt of goods for transport), a bill of exchange, a promissory note, a ship’s delivery order, a warehouse receipt, and more.

The Aims 

The aims of the ETDA, which gives the electronic equivalents of paper trade documents the same legal treatment (subject to criteria) is to:

– Help to rectify deficiencies in the treatment of electronic trade documents under English law and modernise the law to reflect and embrace the benefits of new technologies.

– Help the move towards the benefits of paperless trade and to boost the UK’s international trade.

– Help in the longer-term goal to harmonise and digitise global commerce and its underlying legal frameworks, thereby advancing legal globalisation.

– Complement the 2017 UNCITRAL Model Law on Electronic Transferable Records (MLETR). This is the legal framework for the use of electronic transferable records that are functionally equivalent to transferable documents and instruments, e.g. bills of lading or promissory notes.

Why The Reference To Blockchain In The Title (‘Blockchain Bill’)? 

The development of technologies like blockchain (i.e. an incorruptible distributed ledger) technology that allows multiple parties to transfer value and record forgery-proof records of steps in supply chains and provenance in a secure and transparent way has made trade based on electronic documents possible and attractive.

What’s The Problem With A Paper-Based Trade Document System? 

Moving goods across borders involves a wide range of different actors, e.g. transportation, insurance, finance, and logistics, all of which require (paper) documentation. For example, it’s been estimated that global container shipping generates billions of paper documents per year. A single international shipment, for example, can involve multiple documents, many of which are issued with duplicates, and, considering that two-thirds of the total value of global trade uses container ships, the volume of paper documents is immense.

The need for so much paper, therefore, can slow things down (costs and inefficiencies), creates complication, and has a negative environmental impact.

Based On Old Practices 

Also, existing laws relating to trade documents are based on centuries old merchants’ practices. One key example from this is, prior to the new ETDA, the “holder” of a document was significant because an electronic document couldn’t be “possessed” (in England and Wales), hence the reliance on a paper system. Under ETDA, an electronic document can be possessed, thereby updating the law.

How Does It Benefit Trade? 

Giving electronic equivalents of paper trade documents the same legal treatment offers multiple benefits for businesses, governments and other stakeholders involved in trade. Some of the notable benefits include:

– Efficiency and Speed. Electronic documents can be generated, sent, received, and processed much faster than their paper counterparts. This can significantly reduce the time taken for trade transactions and the associated administrative procedures.

– Cost Savings. Transitioning to electronic trade documentation can save businesses considerable amounts of money by reducing costs related to printing, storage, and transportation of paper documents. For example, the Digital Container Shipping Association (DCSA) estimates that global savings could be as much as £3bn if half of the container shipping industry adopted electronic bills of lading.

– Environmental Benefits. As mentioned above, the shift from paper to electronic documentation could reduce the environmental impact associated with paper production, printing, and disposal. Also, as highlighted by the World Economic Forum, moving to digital trade documents could reduce global logistics carbon emissions by 10 to 12 per cent.

– Accuracy and transparency. Electronic documentation systems often come with features that reduce manual data entry, thereby decreasing errors. Additionally, digital platforms can provide more transparency in the trade process with easy-to-access logs and history.

– Security and fraud reduction. Advanced digital platforms come with encryption, authentication, and other security measures that can reduce the chances of document tampering and fraud. Blockchain, for example, is ‘incorruptible.’ It’s also easier to track the origin and changes in electronic documents.

– Accessibility and storage. ETDA doesn’t exactly specify any one technology, only the criteria that a trade document must meet to qualify as an “electronic trade document” (see the act for the exact criteria). That said, electronic documents can generally be easily stored, retrieved, and accessed from anywhere with the appropriate security clearances, making it easier for businesses to manage and maintain records.

– Interoperability. Digital documents can be more easily integrated with other IT systems, such as customs and regulatory databases, enterprise resource planning (ERP) systems, or financial platforms, providing more seamless trade operations.

– Flexibility and adaptability. Electronic systems can be more easily updated or modified to reflect changes in regulations, business practices, or market conditions.

– Harmonisation of standards. The adoption of electronic documents can pave the way for international standards/global standards, simplifying cross-border trade and making processes more predictable and harmonised across countries.

– Enhanced market access. For smaller enterprises that might not have the resources to deal with cumbersome paper-based processes, the digitisation of trade documentation could make it much easier to access global markets.

– Dispute resolution. Having a digital (secure) record with a clear audit trail, could make it easier to resolve disputes when discrepancies occur.

What Does This Mean For Your Business? 

The technologies exist now to enable reliable, secure, and workable systems that use digital rather than paper documents and this UK Act, in combination with other similar legal changes in other countries could help modernise and standardise global trade. Accepting digital documents as legal equivalents to their paper counterparts will bring a range of benefits to global trade including cost and time savings, greater efficiency, reduced complication (and making it easier for more businesses to get involved in international trade), environmental benefits, the advancement of standardisation of trade globally, and many more.

For the UK, not only does the Act update existing laws but could bring a significant trade boost. For example, the government estimates it could bring benefits to UK businesses (over the next 10 years) of £1.1 billion. It’s easy to see, therefore, why the introduction of EDTA is being seen by some as one of the most significant trade laws passed in over 140 years.

Elon Musk’s neurotechnology company Neuralink has announced that it’s looking for recruits for its first in-human clinical trial of a brain implant.

Approved 

Neuralink says that it has received approval from the independent institutional review board and for its first hospital site to begin recruitment in its first-in-human clinical trial of a brain implant that could help people with paralysis to control external devices with their thoughts.

Neuralink 

Neuralink is a neurotechnology company co-founded by Elon Musk in 2016. The company’s aim has been to develop high-bandwidth brain-machine interfaces (BMIs) with the goal of merging the human brain with artificial intelligence (AI) and thereby advance human capabilities.

The idea is that the BMI, with its tiny, flexible electrode threads (thinner than human hairs) can be implanted into the brain to establish a high-resolution interface with neural circuits to record and stimulate electrical activity.

The main objective of Neuralink is to create a safe and effective means of connecting the human brain to computers or other external devices, for example to enable people who can’t use their hands to use their mobile phone or other devices simply by thinking about it.

The PRIME Study 

The first in-human trial has been dubbed the PRIME Study (short for Precise Robotically Implanted Brain-Computer Interface) which Neuralink describes as “a groundbreaking investigational medical device trial for our fully implantable, wireless brain-computer interface (BCI)”.  

The six-year PRIME study will be used to assess and evaluate the safety and functionality of the company’s N1 implant, R1 surgical robot, and BCI. Neuralink says the goal of this first study will be: “to grant people the ability to control a computer cursor or keyboard using their thoughts alone.” 

What Will Happen? 

Neuralink says the study, which will be conducted under the investigational device exemption (IDE) awarded by the FDA in May 2023, will involve:

– The R1 Robot surgically placing the N1 Implant’s ultra-fine threads in a region of the brain that controls movement intention.

– The N1 Implant (which is “cosmetically invisible”) being used to record and transmit brain signals wirelessly to an app that will decode movement intention.

Recruits 

Neuralink’s website says that, since the main (initial) purpose of the implant is to help those with paralysis to control external devices with their thoughts, it is looking for recruits for the study who have, “quadriplegia due to cervical spinal cord injury or amyotrophic lateral sclerosis (ALS)” 

That said, the website also provides a link for those who want to join a “Patient Registry” for current and “future Neuralink clinical trials.” 

Pigs 

Some may remember that  Neuralink’s implanting of devices into pigs (3 years ago) and demonstration by Musk involving three of them attracted a backlash and great deal of criticism on ethical grounds. Some commentators at the time also noted the potential dystopian possibilities of implants that could potentially be used for control, and People for the Ethical Treatment of Animals (PETA) reacted very angrily to Mr Musk’s use of pigs. PETA president Ingrid Newkirk issued a statement at the time saying, “PETA challenges Elon Musk to behave like a pioneer and implant the Neuralink chip in his own brain.” 

In 2022, it was reported that the company was under federal investigation for potential animal-welfare violations, and that there were internal staff complaints that Neuralink’s animal testing was being rushed and may have caused needless suffering and deaths.

What Does This Mean For Your Business? 

Finding a way to help people with paralysis to operate devices using just their thoughts is a promising and potentially ground-breaking innovation that could deliver huge benefits. It’s also good that volunteers are being invited, thereby potentially giving many people a chance.

This is still a trial however, with a device is in its early stages, even though it has shown some promising signs in tests on pigs (which in itself created an ethical backlash) and so over the next six-months it will still only help a small number of people. That said, it needs to be tested and it’s likely that there will be many volunteers.

If successful and production and implanting program moves forward, the device could (presumably )help with other (medical) conditions and its usage could open up many other opportunities and whole new areas of development for companies and developers hoping to use the interface to link with a variety of products and services in a unique way. However, with it being a brain implant from a company run by a controversial tech figure rather than someone with a medical background, it will inevitably attract criticism around the first steps being taken into a dystopian future. Doubtless too, there will be conspiracy theories and opposition.

Hopefully, the proper regulation and oversight will be in place for Neuralink’s testing (both animals and human) to ensure safety and ethics going forward, and it would be a great achievement if, in six months or so, someone with paralysis can have at least part of their life transformed in a positive way by the implant, and even greater if this could be scaled up to benefit many more people.

It’s been reported that a trade group for U.S. authors (including John Grisham) has sued OpenAI, accusing it of unlawfully training its chatbot ChatGPT on their work.

Which Authors? 

The Authors Guild trade group has filed the lawsuit (in Manhattan federal court) on behalf of a number of prominent authors including John Grisham, Jonathan Franzen, George Saunders, Jodi Picoult, “Game of Thrones” novelist George R.R. Martin, “The Lincoln Lawyer” writer Michael Connelly and lawyer-novelists David Baldacci and Scott Turow.

Why? 

The Guild’s lawsuit alleges that the datasets that have been used to train OpenAI’s large language model (LLM) to respond to human prompts include text from the authors’ books, which may have been taken from illegal online “pirate” book repositories.

As proof, the Guild alleges that ChatGPT can generate accurate summaries of the authors’ books when prompted (including details not available in reviews anywhere else online), which indicates that that their text must be included in its database.

Also, the Authors Guild has expressed concerns that ChatGPT could be used to replace authors and instead could simply “generate low-quality eBooks, impersonating authors and displacing human-authored books.” 

Threat 

The Authors Guild said it organised the lawsuit after witnessing first-hand, “the harm and existential threat to the author profession wrought by the unlicensed use of books to create large language models that generate texts.”  

The Guild cites its latest author income survey as an example of how the income of authors could be adversely affected by LLMs. For example, in 2022 authors (according to the survey) earned just over $20,000, including book and other author-related activities, and although 10 percent of authors earn far above the median, half earn even less.

The Authors Guild says, “Generative AI threatens to decimate the author profession.”  

The Point 

To illustrate the main point of the Guild’s allegations, Scott Sholder, a partner with Cowan, DeBaets, Abrahams & Sheppard and co-counsel for Plaintiffs and the Proposed Class, is reported on their website as saying : “Plaintiffs don’t object to the development of generative AI, but Defendants had no right to develop their AI technologies with unpermitted use of the authors’ copyrighted works. Defendants could have ‘trained’ their large language models on works in the public domain or paid a reasonable licensing fee to use copyrighted works.”  

Open Letter With 10,000 Signatures 

The lawsuit may have been the inevitable next step considering that back in July, the Authors Guild submitted a 10,000 signature open letter to the CEOs of prominent AI companies (OpenAI, Alphabet, Meta, Stability AI, IBM, and Microsoft) complaining about the building of lucrative generative AI technologies using copyrighted works and asking AI developers get consent from, credit, and fairly compensate authors.

What Does Open AI Say? 

As expected in a case where so much may be at stake, no direct comment has been made public by OpenAI (so far) although one source (Forbes) reported online that an OpenAI spokesperson has told it was involved in “productive conversation” many creators around (including the Authors Guild) to discuss their AI concerns.

Where previous (copyright) lawsuits have been filed against it, in its defence OpenAI is reported to have pointed the idea of fair use that could be applied to LLMs.

Others 

Other generative AI providers are also facing similar lawsuits, e.g. Meta Platforms and Stability AI.

What Does This Mean For Your Business? 

Ever since ChatGPT’s disruptive introduction last November with its amazing generative abilities (e.g. with text and code, plus the abilities of image generators), creators (artists, authors, coders etc) have felt AI’s negative effects, expressed their fears about it, and felt the need to protest. For example, the Hollywood actors and writers strikes, complaints from artists that AI image generators have copied their styles, and now the Authors Guild are all part of a growing opposition who feel threatened and exploited.

We are still in the very early stages of generative AI where it appears to many that the technology may be running way ahead of regulation, and where AI providers may appear to be able to bypass areas of consent, copyright, and crediting, and in doing so, use the work of others to generate profits for themselves. This has led to authors, writers, actors, and other creatives fearing a reduction or loss of income and fearing that their skills and professions could be devalued, and that they can and will be replaced by AI. Also, they fear that generative AI could be preferred by studios and other content providers to reduce costs and complication, leading to the inevitable, multiple legal fights that we’re seeing now to clarify boundaries and protect themselves and their livelihoods. In the case of the very powerful Authors Guild, OpenAI will need to bring its ‘A’ game to the dispute as the Authors Guild points out it’s “here to fight” and has “a formidable legal team” with “expertise in copyright law.”

This is not the only lawsuit against an AI provider and there are likely to be many more and many similar protests until legal outcomes provide more clarity of the boundaries in the altered environment created by generative AI.

With many of the world’s coral reefs being damaged by heat and acidification, one startup has developed a system to restore reefs at scale with the help of trained AI robots..

Coral Reefs Struggling 

The world’s coral reefs only cover 0.2 per cent of the seafloor, but they provide a vital habitat to more than a quarter of marine species. Coral reefs, however, are currently in decline due to climate change (leading to ocean warming and acidification), overfishing, pollution, coastal development, and disease. All these factors have led to coral bleaching events (a sign of stressed corals) and have hindered coral growth and reproduction, thereby disrupting the balance of reef ecosystems.

Warning 

The grim warning from scientists is that even just a 1.5C increase in water temperature could result in anywhere between 70 per cent and 90 per cent of the world’s reefs being lost (Global Coral Reel Monitoring Network), which could have dramatic effects on the ocean ecosystem.

Coral Skeletons 

Coral Maker is a startup, founded by Dr Taryn Foster, that seeks to tackle the problems being faced by coral. To do this, the company uses a combination of innovative technology and science to help scale up the restoration rate and success of coral reefs through transplanting tiny, cultivated corals into damaged reefs.

Coral Maker mass produces premade stone coral skeletons which, when deployed as part of its system, helps to significantly reduce the number of years of coral calcification (skeletal growth) required to reach adult size. The skeletons consist of coral fragments grafted into small plugs and inserted into a moulded base.

The system, which can be deployed close to the reefs where it’s needed enables the low cost and fast production of 10,000 premade coral skeletons per day, each with the capacity to hold 6-8 coral fragments. The system’s carbon footprint is reduced by using recycled stone waste from the construction industry and the fact that the skeletons can be produced close to where they’re needed reduces transportation emissions.

Robots 

Since the idea is to rejuvenate reefs at scale using thousands of coral skeletons per day, each positioned in the same way, the repetitive nature of the manufacturing of these base skeletons is work is suited to robots. Coral Maker’s system, therefore, automates its coral propagation by using robotics and AI (supplied by San Francisco based engineering software firm Autodesk).

These automated robots, designed for onsite deployment at the restoration site, and designed to collaborative with people (freeing up humans to do more complex work) have been dubbed ‘cobots’ (because of the collaboration). The pre-trained cobots are essentially AI powered robotic arms that can graft or glue coral fragments to the seed plugs and place them in the bases.

Use Vision Systems and AI To Decide How Best To Handle Coral 

The cobots have their own vision systems which, combined with AI, enables them to decide how best to grab the bases. This vision technology is needed because each piece of coral, even within the same species is slightly different and living coral fragments are very delicate.

Next Step – Put The Robots On Boats 

The next step for the company (estimated to take 12-18 months) is to find a way to successfully enable the robot arm ‘cobot’ to be deployed on a boat right next to where it is needed on the reef without any of its vulnerable components being damaged by salt water, and in a way that keeps it stable enough to carry out its delicate work.

What Does This Mean For Your Organisation? 

The earth’s coral provides a vital habitat to more than a quarter of marine species. Losing our coral would mean a loss of many species and biodiversity, and the complete disruption of marine food webs and ecosystems. There would also be other impacts, e.g. economic (a decline in fisheries and tourism), and a loss of the potential to find new pharmaceuticals. Reefs also act as a coastline buffer and with so many large storms associated with climate change, having no living reefs could actually result in more coastal flooding. It’s clear, therefore, that something has to be done very soon to restore reefs damaged by heat (warmer water temperatures) and acidification. Coral Maker’s system, combining as it does technology and science, gives many benefits, e.g. large areas can be covered quickly as time is saved by using pre-formed skeletons, it uses recycled materials, plus it can shipped and operated anywhere. This makes it a credible way to start trying to reverse some of the damage done to reefs, thereby safeguarding the vital habitats and ecosystems that support so much marine life.

This is a great example of how technologies like AI and robotics can make an important and positive difference in a way that benefits all of us. The hope is that if the cost of the system can be kept low enough, and there is enough investment (money and human capital), and the ‘cobots’ can be made to work effectively on boats (which could take more than a year), the system, and other ideas can be put to work in multiple locations as quickly as possible.

Falcon 1 Launched : 28th September 2008

Rocket Man!

This week on September 28 2008 SpaceX managed to finally get the Falcon 1 rocket into space.

Founder Elon Musk was obviously thrilled, although curiously he wasn’t hungry – even though he’d skipped breakfast earlier that day. It was because he’d had such a big launch.

And just like that pun spectacularly failed, so too did Elon’s first three rocket launches in 2006, 2007, and also earlier that same year in 2008. It was why the payload of ‘RatSat’ was just a dummy and was used to simulate the mass of an actual satellite to test the rocket’s capabilities without risking a functional satellite. Obviously, cash was more important than ever as this was the first fully liquid-fuelled launch vehicle developed privately to enter orbit. An expensive business!

After those three expensive failures, that fourth success was pretty crucial for Elon Musk who has mentioned in several interviews that the company was close to running out of funds, and the success of the fourth launch was critical for securing more funding and ensuring the survival of the company.

After the rocket was launched successfully the next July (2009), this meant the rocket had 5 launches before it was retired, helping secure SpaceX to become the success it has become and with a market cap this summer (2023) of around $150 Billion, it’s Worth More Than Boeing and Raytheon. Not bad.

The moral here? If at first you don’t succeed, try, try, try again!
Although it may be helpful make sure you have deep pockets or access to someone else’s capital.

It’s been reported that according to a dark web victim blog of cybercrime hacking gang ‘Donut,’ Nottingham-based IT Service Provider Agilitas may have been the subject of a ransomware attack.
Donut is reported to be claiming that it is in possession of the source code and SQL databases belonging to Agilitas and is threatening to start posting the information onto the dark web to force the company to meet its ransom demands.

This highlights how no businesses (even IT Service Providers and security experts) are immune to being targeted by cyber criminals and the advice to all businesses is to remain vigilant, continuously update their security protocols, and educate their employees about the dangers of phishing and other cyber threats.

If you’d like to use WhatsApp to save time when asking a group of people the same question, making it look as though you’ve asked each of them individually and not having to open each chat to ask them separately, here’s how:

– For Android: Tap on Chats > Menu (three dots top right)> New Broadcast.

– Select the contacts for the broadcast list by tapping on their names (a green tick will appear).

– Once the list has been made, tap on the “Create” (big green tick) button. You will then be shown the number of recipients (and names) top left, with a message field at the foot of the screen.

– Compose and send the message to the list.

– To edit the recipients, or to delete the list, tap on the three dots (top right) and tap on ‘Broadcast list info.’

– To create the list in iOS – Tap on Chats > Broadcast Lists > New List > Add contacts.

Following the recent news that sales of Apple’s iPhone 12 in France have been banned over radiation fears, we look at where these fears came from and how much danger, if any, Apple iPhone 12 users may be in.

France, Fears, Ban, & Update 

France’s National Frequency Agency (ANFR), the watchdog that manages all radio frequencies in France (for all wireless communications) recently ordered an immediate withdrawal of the iPhone 12 from the French market over fears that the phone could be emitting dangerous radiation.

The fears came from the results of an ANFR test of the iPhone 12, simulating the phone being held in the hand or put in a pocket. Following the test, the ANFR reported that it emits more electromagnetic waves (susceptible to being absorbed by the body) than permitted.

With ‘SAR’ standing for Specific Absoption Rates, the ANFR’s tests evaluate phones in contact with the body for “limb” SAR (a phone held in the hand or in a trouser pocket), and at a distance of 5 mm for “trunk” SAR (a phone carried in a jacket pocket or a bag). In the EU, phones must comply with the regulatory limit values of 4.0 W/kg for “limb” SAR and 2 W/kg for “trunk” SAR. In the case of the iPhone 12 test, the ANFR said that “measurements have revealed a “limb” SAR value exceeding this limit, specifically 5.74 W/kg. However, the “trunk” SAR values are compliant.” 

In addition to the ban on sales of the iPhone 12, the ANFR said: “Apple must immediately take all measures to prevent the availability of the concerned phones in the supply chain. Regarding the phones that have already been sold, Apple must promptly take corrective measures to bring the concerned phones into compliance. Failing that, it will be the company Apple’s responsibility to recall them.” 

Germany & Belgum Spooked 

Following the results and action in France, it was reported that regulators in Germany and Belgium were investigating the SAR levels of the iPhone 12 which could result in similar action in those countries. Other European countries may follow suit. Spain’s OCU consumers’ group, for example, has urged authorities there to halt the sales of the iPhone 12.

What Does Apple Say About It? 

Apple has disputed the ANFR’s findings, dismissing them as “a specific testing protocol used by French regulators and not a safety concern.” 

Apple said that its iPhone 12, introduced in 2020, has been certified by multiple international bodies as compliant with global radiation standards, that it has provided several Apple and third-party lab results proving the phone’s compliance to the French agency, and that it was contesting its findings.

Apple has also said that it will issue a software update to fix any radiation issues.

Who’s Right? Is It Dangerous? 

Electromagnetic fields are present everywhere, i.e. electromagnetic field radiation occurs naturally and also, we are subject to man-made electromagnetic fields, such as those emitted by electricity that comes out of every power socket. The higher frequency radio waves used to transmit information, e.g. from TV antennas, radio stations or mobile phone base stations. Arguably, the common lightbulb emits high frequency electromagnetic radiation (i.e. visible light), yet few people are concerned about that. However, fields of different frequencies interact with the body in different ways.

Radiation, which appears to be the most frightening word due to its links to cancer, refers to the emission of energy as electromagnetic (EM) waves or fast-moving subatomic particles. Both forms of radiation are naturally occurring, and can come from various sources including the sun, cosmic rays, radon gas, radioactive rocks and even common foods such as Brazil nuts. However, “non-ionising” radiation comes from much lower frequency (EM) sources, such as microwaves, cordless-phones, Bluetooth etc. Radiation can also come from, planned (medical, occupational) or accidental situations.

Where mobile phones are concerned, the International Agency for Research on Cancer, which sets global SAR guidance and levels classed the radiofrequency electromagnetic fields from mobile phone use as “possibly carcinogenic” in 2011. However, as the World Health organisation stated about the radiofrequency waves transmitted by mobile phones in 2014: “Radiofrequency waves are electromagnetic fields, and unlike ionizing radiation such as X-rays or gamma rays, can neither break chemical bonds nor cause ionisation in the human body.”

It also stated that: “A large number of studies have been performed over the last two decades to assess whether mobile phones pose a potential health risk. To date, no adverse health effects have been established as being caused by mobile phone use.” 

Comments About The iPhone 12’s Safety 

In relation to the iPhone 12’s ban, Professor Rodney Croft, the chair of the International Commission on Non-Ionising Radiation Protection (ICNIRP) has been widely quoted across the media, saying: “From a health and safety point of view, it is not as if this is putting anyone at risk”. 

Limits Have Been Set Low 

It is also the case that regulatory limits on SAR have been set well below levels where scientists have found evidence of harm anyway. For example, based on the risk of burns or heatstroke from a phone’s radiation, the SAR levels are already set ten times below the level where scientists have found evidence of harm.

This suggests that there may be no need for alarm over the French testing of the iPhone 12 which only showed a slightly excessive reading in the “limb” SAR value but was compliant in other tests.

What Does This Mean For Your Business?

With an abundance of devices, transmitters, and other sources of electromagnetic waves all around us in the street, home, workplace, and countryside, and with more of us becoming more reliant on our radiofrequency wave-transmitting phones, it’s good that are tests taking place. It’s also good from a consumer protection point of view that enough tolerance has been built into the SAR tests, and that there are regulators in place to force fast action, e.g. from sales bans to recalls. However, from Apple’s point of view, the results of a test in one country, whether fully accurate or not, has damaged sales through a ban (which is spreading internationally) and led to a more damaging wave of fear and bad publicity.

If Apple can’t satisfy the regulators (it has two weeks to respond in France) and quell fears over a phone that’s now three years old, a snowballing effect could bring an even wider ban across the EU and an even more expensive recall (as already threatened) could follow.

Apple has just launched its iPhone 15 and will be hoping that the fears don’t rub off and affect its sales or, even worse, that it doesn’t also come under scrutiny and come out with similar results. That said, as France’s junior minister for the digital economy, Jean-Noel Barrot (who is sceptical of the software update fix) says, the rule is the same for everyone introducing devices in France, including the digital giants.

Outside of the software update, Apple may now need to do some more serious talking and convincing to “stop the rot” in the EU damaging its profits and reputation further. All this is, of course, good news for Apple’s competitors in the EU phone market who may pick up some of Apple’s lost sales.

The SAR findings top off a bad week for Apple in Europe where it has also been forced to swap its lightning charger for a USB-C charging port for its iPhone 15 in order to comply with EU rules for standardisation in 2024.

In this insight, we take closer look at the subject of tech companies getting into trouble over antitrust issues, why it happens, what can be done, and what part organisations like the UK ‘Monopoly Commission’ plays.

The Monopoly Commission

The Monopoly Commission dates back to a previous incarnation of a regulator and is often used and accepted as a broad term to describe the regulatory body that is tasked with overseeing and controlling monopolistic and anti-competitive behaviour in markets. Each country has a different one, each with different titles and different powers. Technically, therefore, there’s only one in the UK, but many different ones of varying names around the world.

Role 

The role of such commissions is to enforce ‘antitrust’ laws to help ensure competition and regulate mergers and acquisitions to prevent any one company from having too much market power.

In The UK & US 

In the UK, for example, what was the Monopolies and Mergers Commission regulatory authority was replaced by the Competition Commission, which in turn was superseded by the Competition and Markets Authority (CMA) in 2014. These organisations have had the mandate to ensure that competition is fair, and consumers are protected.

In the United States, the role of regulating monopolistic behaviour is mostly undertaken by the Federal Trade Commission (FTC) and the Antitrust Division of the U.S. Department of Justice.

In Europe 

In Europe, as part of the European Commission, The Directorate-General for Competition (DG COMP) essentially does a similar job to the UK’s FTC.

What Powers Does The UK’s CMA Have? 

The UK’s CMA has the power to impose a range of penalties and take various actions against companies for antitrust violations. These include:

– Fines. The CMA can impose fines up to 10% of a company’s global turnover for breaches of competition law.

– Disqualification. Directors can be disqualified from holding company directorships for up to 15 years if they are found to have infringed competition law.

– Enforcement Orders. The CMA can issue orders to cease and desist from anti-competitive behaviour, as well as require companies to take specific actions to restore competition.

– Criminal Sanctions. In some cases, individuals can face criminal charges for cartel activity, including imprisonment.

– Market Investigations. The CMA has the authority to carry out market investigations and recommend or enforce changes to market structure or business practices.

– Mergers and Acquisitions. The CMA has the power to block or require modifications to mergers, acquisitions, and joint ventures that are likely to reduce competition.

Who And What Gets Hurt By Monopolies? 

If a company has too much market power and dominance, there are many entities and factors can be negatively impacted. For example:

– Consumers can suffer through reduced choice, higher prices, and potentially lower quality products or services.

– Competitors can be hurt, e.g. smaller firms may be driven out of business or prevented from entering the market, thereby stifling competition.

– Suppliers can find themselves squeezed on prices or terms, potentially causing smaller suppliers to go out of business.

– Innovation suffers because with less competition, the dominant firm has fewer incentives to innovate and improve.

– Market distortions can lead to resource allocation that is not optimal, wasting societal resources, i.e., economic efficiency can suffer.

– Reduced competition may result in fewer jobs and reduced salaries (the job market can be affected).

– The dominance of one company can lead to market complacency (a lack of urgency to prepare for risks), reduced consumer choice, and a lack of disruptive technologies.

– Fair trade can suffer because excessive market power can create imbalances in trade negotiations and economic partnerships, both domestically and internationally – leading to unfair/excessive pricing.

Trouble For Tech Companies 

With the tech market being essentially dominated by a relatively small number of very large and powerful tech companies, it’s not surprising that many of them have got on the wrong side of the antitrust regulators. Some high-profile examples involving some familiar tech names include:

Amazon

Back in November 2021, the European Commission fined Amazon approximately €2.42 billion for using non-public data from independent sellers on its platform to benefit its own retail business, which the Commission considered to be an abuse of a dominant market position.

Also, in the same year, Italy’s competition authority fined Amazon over €1 billion for abuse of market dominance related to its logistics platform, Fulfillment by Amazon (FBA). The authority argued that the terms and conditions for third-party sellers using FBA restricted competition.

Currently, but in a case dating back four years the EC is investigating Apple over so-called “anti-steering” practices, i.e. where developers are prevented from informing users about alternative payment options (which would constitute unfair trading practices).

Microsoft 

Famously, way back in 1998, the U.S. Department of Justice and 20 state attorneys general filed an antitrust lawsuit against Microsoft, alleging that the company had abused its market dominance to stifle competition, particularly by bundling its Internet Explorer web browser with its Windows operating system. The case led to a prolonged legal battle, and eventually, Microsoft was found to have violated antitrust laws. However, a proposed breakup of the company was rejected, and Microsoft instead settled the case by agreeing to make it easier for competitors’ software to operate with Windows.

This month, following a 2020 complaint made by Slack, an EC investigation over a possible breach of competition rules, has led to Microsoft announcing that it will begin unbundling Teams from Office 365 and Microsoft 365 in the European Economic Area and Switzerland. Microsoft was facing a potentially massive fine, e.g. 10 per cent of its turnover and opted to take the ‘proactive’ unbundling decision.

Apple

Apple is also no stranger to getting into hot water over antitrust issues. For example, back in March 2020, Apple was fined €1.1 billion by France’s competition authority for anti-competitive practices with its distribution and retail network. The authority alleged that Apple and two of its wholesale distribution partners had agreed not to compete against each other and also prevented premium resellers from lowering prices, which resulted in an unfair advantage for Apple’s own stores.

Dating from back in 2021, and still ongoing (the EC released a rare revision and clarification of the issues earlier this year), Apple has been under investigation by the European Commission regarding its App Store practices, specifically surrounding the 30 per cent commission it takes from in-app purchases. Spotify and other companies have claimed this is anti-competitive, as Apple’s own services don’t have to pay the commission. Apple could still face a hefty fine, e.g. up to 10 per cent of its global annual revenue if things don’t go its way.

Google  

Currently, in what is the biggest antitrust trial in 20 years, following a lawsuit (three years ago) by the US Justice Department and a group of states, Google is accused of having a monopoly in online search and related advertising markets and being the default search engine on most U.S. phones. The accusations relate to the fact that Google has around a 90 per cent share in search, aided by restrictive agreements with browser and phone partners (e.g. Apple, Mozilla, Samsung, and Verizon) that give it dominance. The trial will also focus on Google’s agreements with Android-based mobile-device manufacturers which forbid the pre-installing or promoting of rival search engines if they opt to take some of Google’s search revenue.

Back in 2019, the European Commission imposed a €1.49 billion fine on Google for abusing its market dominance in the online advertising sector. The Commission found that Google had imposed restrictive clauses in contracts with websites using its AdSense service, effectively stifling competition.

In 2018, Google was fined £3.8 billion for pre-installing its search engine and browser on Android devices, which was seen as an abuse of its dominant position

What Does This Mean For Your Business? 

In our digital society where tech companies have grown to occupy serious positions of power, the tech sector has become a focal point for recent antitrust scrutiny. This is perhaps not surprising due to issues like market dominance by a few big tech companies (Microsoft, Google, Amazon, Apple, Meta), and the network effects of technology platforms, e.g. the value of the services increasing as more people use them creating a tendency toward market concentration.

The control the big tech companies have over data (which market-newcomers find hard to match) and the whole product eco-systems created by big companies effectively making it hard for consumers to switch have increased the level of scrutiny. Arguably, companies of this size and dominance with their significant profits need outside regulation to ensure fair play for all.

That said, the tech sector is not the only one where antitrust issues regularly crop up. For example, dominant companies within the financial, energy, telecoms, and pharmaceutical industries also see their fair share of complaints and penalties. This article highlights why outside regulation is needed, what challenges companies and regulators face, and how each country has its own ‘monopoly commission’ authority with different powers and rules that are constantly changing as new issues arise.

Video-focused social media platform TikTok has been fined €345m by Ireland’s Data Protection Commission (DPC) over the privacy of child users.

The Processing of Personal Data 

The fine, as well as a reprimand (and an order requiring them to bring its data processing into compliance within three months) were issued in relation to how the company processed personal data relating to child users in terms of:

– Some of the TikTok platform settings, such as public-by-default settings as well as the settings associated with the ‘Family Pairing’ feature.

– Age verification in the registration process.

During its investigation into TikTok, The DPC also looked at transparency information for children. The DPC’s investigation focused on the period from 31 July 2020 and 31 December 2020.

Explained 

Explained in basic terms, TikTok was fined because (according to the DPC’s findings) :

– The profile settings for child users accounts being set to public-by-default meant that anyone (on or off TikTok) could view the content posted by the child user. The DPC said this also posed risks to children under 13 who had gained access TikTok.

– The ‘Family Pairing’ setting allowed a non-child user (who couldn’t be verified as the parent or guardian) to pair their account to the child user’s account. The DPC says this enabled non-child users to enable Direct Messages for child users over 16, thereby posing a risk to child users.

– Child users hadn’t been provided with sufficient information transparency.

– The DPC said that TikTok had implemented “dark patterns” by “nudging users towards choosing more privacy-intrusive options during the registration process, and when posting videos.” 

TikTok Says…

TikTok has been reported as saying that it disagrees with the findings and the level of the fine. TikTok also said: “The criticisms are focused on features and settings that were in place three years ago, and that we made changes to well before the investigation even began, such as setting all under 16 accounts to private by default”.

Fines

This isn’t the first fine for TikTok in relation to this subject. For example, in July 2020, the company was fined $5.7 million by the U.S. Federal Trade Commission (FTC) for collecting data from minors without parental consent. Also, in April this year, TikTok was fined £12.7m by the ICO for allowing children under 13 to use the platform (in 2020).

The level of TikTok’s most recent fine, however, is not as much as the £1bn fine issued to Meta in May for mishandling people’s data in transfer between Europe and the US.

Banned In Many Countries

In addition to fines in the some of the countries where the TikTok app is allowed, for a mixture of reasons including worries about data privacy for young users, possible links to the Chinese state, incompatibility with some religious laws and some political situation(s) have resulted in TikTok being banned in Somalia, Norway, New Zealand, The Netherlands, India, Denmark, Canada, Belgium, Australia, and Afghanistan.

What Does This Mean For Your Business?

Back in 2020, TikTok was experiencing massive growth as the most downloaded app in the world. It was also the year when former U.S. President Donald Trump issued an executive order aiming to ban TikTok in the United States, plus the year when the platform picked up its first big fine ($5.7 million) from the FTC (in the US) over collecting data from minors without parental consent.

As pointed out by TikTok, this latest, much larger European fine dates back to issues from around the same time, which TikTok argues it had already addressed before the DPC’s investigation began. This story highlights how important it is to create a safe environment in this digital society for children and young people who are frequent users of the web and particularly social media platforms. This story also highlights how important it is for businesses to pay particular attention to data regulations relating to children and young users and to review systems and processes with this mind to ensure maximum efforts are made maintain privacy and safety.

Furthermore, it is also an example of the importance of having regulators with ‘teeth’ that can impose substantial fines and generate bad publicity for non-compliance which can help provide the motivation for the big tech companies to take privacy matters more seriously. TikTok’s worries, however, aren’t just related to data privacy issues. Ongoing frosty political relations between China and the west mean that its relationship with the Chinese government is still in question and this, together with the bans of the app in many countries means it remains under scrutiny, perhaps more than other (US based) social media platforms.