Telecoms & the Internet Archives - Society for Computers & Law https://www.scl.org/category/telecoms-the-internet/ Society for Computers & Law Wed, 30 Apr 2025 07:54:33 +0000 en-GB hourly 1 https://wordpress.org/?v=6.8.1 https://www.scl.org/wp-content/uploads/2024/02/cropped-scl-150x150.png Telecoms & the Internet Archives - Society for Computers & Law https://www.scl.org/category/telecoms-the-internet/ 32 32 Exploring Competition in Cloud and AI Podcast: Episode 4: The EU Data Act and Cloud Analogies https://www.scl.org/exploring-competition-in-cloud-and-ai-podcast-episode-4-the-eu-data-act-and-cloud-analogies/ Wed, 30 Apr 2025 07:54:29 +0000 https://www.scl.org/?p=18572 We have teamed up with the LIDC (International League of Competition Law) to share a series of podcasts examining some of the increasingly pressing questions around cloud computing, AI and competition law. Over seven episodes, recorded in November 2024, Ben Evans, Shruti Hiremath and guests will look beyond the current position to identify some of the pressures...

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We have teamed up with the LIDC (International League of Competition Law) to share a series of podcasts examining some of the increasingly pressing questions around cloud computing, AI and competition law.

Over seven episodes, recorded in November 2024, Ben Evans, Shruti Hiremath and guests will look beyond the current position to identify some of the pressures the changing landscape will bring to bear.

Episode 4: The EU Data Act and Cloud Analogies

Are analogies between cloud and open banking and telecoms appropriate? A deep dive into the EU Data Act and the potential unintended consequences

Building on the discussion in episode 3, this episode 4 analyses the cloud provisions of the EU Data Act with reference to an influential and widely cited paper co-authored by Ben Evans and Sean Ennis. The panel explore the concept of ‘equivalence’ between cloud services and question the merits of the controversial ‘functional equivalence’ requirement, which is designed to boost switching between cloud providers. This leads to a discussion over whether the analogy between cloud computing services, which exhibit high degrees of feature complexity and innovation, and banking services, which exhibit both a limited number of key features and a relatively low level of innovation, is appropriate. As articulated by the authors in an earlier SCL article, it is suggested that these two differences are critical for considering the nature and focus of future cloud regulation and may limit the value of analogies to prior experiences with portability and interoperability. Moreover, the panel considers the authors’ observation that a significant number of cloud customers already have the possibility and incentive to account ex ante at contract stage for the trade-off between complexity and customisation in service functionality and ease of portability and interoperability. The discussion turns attention to profound concerns that the Data Act may have the unintended consequences of disincentivising innovation, strengthening the position of incumbents, and harming smaller cloud service providers by inter alia effectively commoditising cloud services to the extent that competition is reduced to price competition.

Panel

Ben Evans (Chair) is a Postgraduate Researcher at the School of Law and Centre for Competition Policy, University of East Anglia. He is a member of the LIDC Scientific Committee.

Shruti Hiremath is Counsel in the Clifford Chance Antitrust Team in London.

Lauren Murphy is Founder and CEO of Friday Initiatives.

Sean Ennis is Director of the Centre for Competition Policy and a Professor of Competition Policy at Norwich Business School, University of East Anglia.

The LIDC NEX GEN Podcast Series on ‘Competition in Cloud and AI’ explores some the most topical and hotly debated questions  with a panel of leading international experts from academia, legal practice and industry.

The series was recorded  on 7 November 2024, and the views and opinions expressed therein reflect the legal context and state of affairs up to that date.

You can also watch or listen via the LIDC website, YouTube and Spotify.

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Exploring Competition in Cloud and AI Podcast: Episode 3 – Dissecting Cloud Competition https://www.scl.org/exploring-competition-in-cloud-and-ai-podcast-episode-3-dissecting-cloud-competition/ Fri, 25 Apr 2025 09:50:58 +0000 https://www.scl.org/?p=18276 We have teamed up with the LIDC (International League of Competition Law) to share a series of podcasts examining some of the increasingly pressing questions around cloud computing, AI and competition law. Over seven episodes, recorded in November 2024, Ben Evans, Shruti Hiremath and guests will look beyond the current position to identify some of...

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We have teamed up with the LIDC (International League of Competition Law) to share a series of podcasts examining some of the increasingly pressing questions around cloud computing, AI and competition law.

Over seven episodes, recorded in November 2024, Ben Evans, Shruti Hiremath and guests will look beyond the current position to identify some of the pressures the changing landscape will bring to bear.

Episode 3: Dissecting Cloud Competition

The investigations of the UK CMA and an introduction to the EU Data Act.

In episode three, the panel begin exploring the five-fold concerns raised by the UK CMA in its issues statement in relation to its cloud market investigation. First, the authority has expressed concern that potential market concentration may be limiting choice. Although a number of large firms hold substantial market share in public cloud, the existence of on-premises and hybrid cloud solutions may temper concerns. Second, the CMA is worried that data transfer fees may prohibit switching, an issue that has been addressed in the EU under the cloud provisions of the recently enacted Data Act. Third, there is a concern that impediments to portability and interoperability may create dependencies or impair customers’ ability to move assets and to integrate across providers. Although such concerns may be valid, the panel considers the reality that market-based solutions are already developing, with industry consortia and voluntary standards bodies emerging without the need for regulatory interference. Fourth, the CMA has considered whether committed spend agreements limit customer flexibility and cause lock-in. Any intervention should be mindful of the benefits of such agreements to consumers in terms of cost savings and price stability. Finally, unfair licensing practices have come under scrutiny and there is a legitimate question as to whether some large providers may restrict competition by, for example, requiring additional fees or adherence to restrictive terms when customers use software from rival providers.[1]

While there has been substantial regulatory interest in Japan, the Netherlands, South Korea and France, all of which have completed cloud market studies, and in Spain and the USA, which have started investigations, the UK authority has advanced arguably the most detailed research and analysis of competition in the sector. The panel observes that despite this, the initial conclusions reached by the CMA and the referring authority Ofcom do not necessarily follow from the empirical market research that underpins their respective studies. Indeed, this is an issue that has been raised by Ben Evans and Sean Ennis in their co-authored consultation responses to the CMA and Ofcom. The evidence suggests that generally customers are on the ‘way in’ on their cloud journey and that, as opposed to provider restrictions, one of the key factors leading to lock-in may be that those firms do not yet have the in-house technical capability to initiate cost and time efficient switch.


[1]  Since the recording of the podcast, the CMA has published its Provisional Decision Report on 28 January 2025. Further details are available at: https://www.gov.uk/cma-cases/cloud-services-market-investigation#provisional-findings.

Panel

Ben Evans (Chair) is a Postgraduate Researcher at the School of Law and Centre for Competition Policy, University of East Anglia. He is a member of the LIDC Scientific Committee.

Shruti Hiremath is Counsel in the Clifford Chance Antitrust Team in London.

Lauren Murphy is Founder and CEO of Friday Initiatives.

Sean Ennis is Director of the Centre for Competition Policy and a Professor of Competition Policy at Norwich Business School, University of East Anglia.

The LIDC NEX GEN Podcast Series on ‘Competition in Cloud and AI’ explores some the most topical and hotly debated questions  with a panel of leading international experts from academia, legal practice and industry.

The series was recorded  on 7 November 2024, and the views and opinions expressed therein reflect the legal context and state of affairs up to that date.

You can also watch or listen via the LIDC website, YouTube and Spotify.

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Cybersecurity Monitoring Centre: Bringing greater legal clarity to complex cyber events https://www.scl.org/cybersecurity-monitoring-centre-bringing-greater-legal-clarity-to-complex-cyber-events/ Thu, 24 Apr 2025 09:23:37 +0000 https://www.scl.org/?p=18406 Edward Lewis, CEO of CyXcel, on the genesis of the Cyber Monitoring Centre Without question, cybercrime is one of the leading threats facing every industry today. Ransomware remains not only rampant but devastatingly expensive, with average ransomware payments having increased 500% year over year to $2 million in 2024. What’s more, these payments account for...

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Edward Lewis, CEO of CyXcel, on the genesis of the Cyber Monitoring Centre

Without question, cybercrime is one of the leading threats facing every industry today.

Ransomware remains not only rampant but devastatingly expensive, with average ransomware payments having increased 500% year over year to $2 million in 2024. What’s more, these payments account for just part of the cost. Excluding ransoms, the average cost of recovery now stands at $2.73 million.

For organisations to withstand such significant financial impacts, cyber insurance has become invaluable. However, from a legal perspective, this is a landscape that has continued to throw up challenges, debate, ambiguity and several headaches in recent years.

Lloyd’s of London introduction of a policy requiring insurance group members to exclude liability for losses arising from state-backed cyberattacks in 2023 is a prime example – one that remains contentious even today owing to both attribution challenges and its conflation of systemic cyber risk with cyber war.

The former of these challenges has proven to be particularly troublesome. Given the potential costs of recovery involved in cyberattacks, many small- and medium-sized businesses are simply unable to cope with delayed cyber policy payouts resulting from disputes over attribution. These are organisations that need rapid financial support in days or weeks, not months or years.

What is the CMC?

This where the newly launched Cyber Monitoring Centre (CMC) aims to provide a solution by enhancing legal clarity.

An independent non-profit led by a technical committee comprising non-insurance experts from across academia, cybersecurity, public policy, defence and law, the CMC has developed a standardised scale that categorises the impact of cyber incidents. I have been privileged to be a part of the leadership driving the initiative.

The CMC framework works in a similar way to the Saffir-Simpson Hurricane Wind Scale, assigning a severity rating to cyber incidents using a simple five-point scale ranging from one (least severe) to five (most severe). These ratings are based on the economic impacts of incidents, starting at £100 million for category one events and rising to more than £5 billion for category five. Further, each categorisation is supported by an event report, all of which will be available freely.   

Using a wide range of data and analysis to assess incidents, a key goal of the CMC is to address the long-standing challenge of legal ambiguity in the cyber insurance landscape by providing a consistent, market-wide framework for defining systemic cyber events.

Until now, the severity of cyber incidents has been notoriously difficult to quantify for several reasons.

First, there is no universal impact metric in relation to cyber incidents. While the financial loss, casualties and recovery times of physical disasters are well understood, cyberattacks can impact organisations in a variety of different ways. While a ransomware attack might cripple one company, the same attack may cause only minor problems for another.

Secondly, there are significant challenges around the availability of data. Indeed, many incidents are never disclosed due to reputational risks and legal concerns. Even when they are, organisations often underreport the impact, downplaying the full extent of the damage. As a result, building an accurate severity model becomes more difficult.

Thirdly, cyberattacks are rarely one-off events that end with a single victim. Supply chains, financial markets and critical infrastructure may all be impacted by attacks in ways that are tricky to quantify, with traditional methods of measuring impact focusing too much on direct costs while not considering the wider consequences.

These hurdles have made underwriting challenging in relation to cyber insurance – until now. By establishing a common framework for measuring severity, and aggregating data across sectors, the CMC is striving to overcome these existing challenges and provide a clearer, more quantifiable picture of cyber risks.

What are the benefits it provides?

The benefits of a consistent standard to measure the severity of cyber incidents can be significant for a variety of different stakeholders, bringing clarity to what has historically been a complex process.

Policymakers and regulators will gain a much clearer view into cyber risks at scale, ensuring that resources can be better allocated to combat threats and regulations can be introduced that more effectively enhance nationwide resilience.

Organisations, meanwhile, will be able to assess incidents with a standardised method, helping them to identify and eliminate potential vulnerabilities across their network. Again, this will enhance long-term resilience planning.

For insurers, meanwhile, the CMC’s classifications can help to improve the way in which they cover systemic cyber incidents – attacks that impact large parts of the business community that are difficult to insure for due to their scale.

At present, insurers that do offer cyber solutions have typically relied upon multiple exclusions to define the events that they will cover. However, this can lead to the development of cumbersome, complex and confusing policies. Moving forward, however, it is envisioned that insurers could eventually simplify policy language by referring directly to CMC classification to define the limits of their cover.

Challenges include scope limitations, data availability and model evolution

Critically, these changes may serve to make coyer more attractive and accessible to businesses – especially SMEs, helping to address the growing challenge of attribution issues and policy disputes. However, no initiative of this scale is without its hurdles.

A key risk that may determine the effectiveness of the CMC is scope limitations. While its primarily focused on financial and operational impact, some cyber incidents such as those impacting the health and transport sectors could have life-threatening consequences, which must also be considered.

Keeping up with evolving threats will also be a challenge. With cyberattacks constantly changing and shifting, the CMC will need to tweak its models over time to ensure relevancy. And in large part, that relevancy will rely on industry buy-in and data availability. If participation is patchy, or companies hold back key details, the CMC’s outputs may be less reliable.

Despite these challenges, the CMC holds major promise. Indeed, it has the potential to transform cyber insurance by providing a consistent, market-wide framework for defining systemic cyber events and bringing greater clarity to the understanding of often complex cyber events.

However, that success ultimately depends on continued collaboration between government, industry, and cybersecurity professionals, with widespread adoption key to ensuring the framework’s relevance and effectiveness for years to come.

Edward Lewis, CEO of CyXcel

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Exploring Competition in Cloud and AI Podcast: Episode 2 – Alternative Visions https://www.scl.org/exploring-competition-in-cloud-and-ai-podcast-episode-2-alternative-visions/ Fri, 18 Apr 2025 09:46:15 +0000 https://www.scl.org/?p=18272 We have teamed up with the LIDC (International League of Competition Law) to share a series of podcasts examining some of the increasingly pressing questions around cloud computing, AI and competition law. Over seven episodes, recorded in November 2024, Ben Evans, Shruti Hiremath and guests will look beyond the current position to identify some of...

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We have teamed up with the LIDC (International League of Competition Law) to share a series of podcasts examining some of the increasingly pressing questions around cloud computing, AI and competition law.

Over seven episodes, recorded in November 2024, Ben Evans, Shruti Hiremath and guests will look beyond the current position to identify some of the pressures the changing landscape will bring to bear.

Episode 2: Alternative Visions

A look at the emerging alternative visions of the AI stack around the world.

Episode 2 considers alternative visions for the AI stack. The discussion begins by thinking about the emergent ‘EuroStack’, which is a strategic initiative to develop independent digital infrastructure across all layers of the stack and reduce reliance on non-EU technologies that was launched in the European Parliament in 2024. At a high-level, this approach represents a significant transition away from the prevailing regulatory approach focussed on competition in  certain components of the stack towards an infrastructural approach driven by ambitious industrial policy. The panel proceeds to reflect on the approaches of different international jurisdictions, focussing in particular on the development of digital public infrastructure in emerging markets, and the issue of sovereignty. Crucially, the Indian examples of the Unified Payments Interface and the Open Network for Digital Commerce provide evidence that digital public infrastructure can promote significant competition. This prompts the panel to question whether regulatory intervention is necessary if there exists a sufficiently developed digital public infrastructure. Of course, it is essential that government initiatives are not mandated to the detriment of market-based solutions and are instead offered as alternatives. Ultimately, the co-existence of digital public infrastructure and private firm offerings may lead to a healthy competitive market.

Panel

Ben Evans (Chair) is a Postgraduate Researcher at the School of Law and Centre for Competition Policy, University of East Anglia. He is a member of the LIDC Scientific Committee.

Shruti Hiremath is Counsel in the Clifford Chance Antitrust Team in London.

Lauren Murphy is Founder and CEO of Friday Initiatives.

Sean Ennis is Director of the Centre for Competition Policy and a Professor of Competition Policy at Norwich Business School, University of East Anglia.

The LIDC NEX GEN Podcast Series on ‘Competition in Cloud and AI’ explores some the most topical and hotly debated questions  with a panel of leading international experts from academia, legal practice and industry.

The series was recorded  on 7 November 2024, and the views and opinions expressed therein reflect the legal context and state of affairs up to that date.

You can also watch or listen via the LIDC website, YouTube and Spotify.

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Exploring Competition in Cloud and AI Podcast: Episode 1 – The Status Quo https://www.scl.org/exploring-competition-in-cloud-and-ai-podcast-episode-1-the-status-quo/ Fri, 11 Apr 2025 10:45:22 +0000 https://www.scl.org/?p=18129 We have teamed up with the LIDC (International League of Competition Law) to share a series of podcasts examining some of the increasingly pressing questions around cloud computing, AI and competition law. Over seven episodes, recorded in November 2024, Ben Evans, Shruti Hiremath and guests will look beyond the current position to identify some of...

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We have teamed up with the LIDC (International League of Competition Law) to share a series of podcasts examining some of the increasingly pressing questions around cloud computing, AI and competition law.

Over seven episodes, recorded in November 2024, Ben Evans, Shruti Hiremath and guests will look beyond the current position to identify some of the pressures the changing landscape will bring to bear.

Episode 1: The Status Quo

The current state of competition law for cloud computing and what the regulators are up to now.

Episode 1 sets the listener up for a deep dive into cloud computing and AI later in the series with a high-level discussion of the key competition concerns that have been raised across the AI stack.

The AI stack broadly comprises of four components: data, compute (encompassing chips and cloud computing), foundation models, and AI applications. The panel reflect on the recent media and policy focus on the compute component and the widely reported chip shortages that have led competition authorities in the EU and USA to investigate how supply is being allocated. While there may have been shortages, these shortages – and any related competition concerns – should be considered against the backdrop of a sudden surge in AI product development, which may not represent a forward-looking picture of chip supply. Indeed, the recent proliferation of new chip development from firms including AMD, Intel, Google, OpenAI and Amazon suggests that competition for the supply of chips is fierce.[1] Authorities around the world are also showing considerable interest in cloud competition, focussing in particular on potential barriers to switching and interoperability. Episodes 3 and 4 are dedicated to exploring these issues in depth.

Turning attention to foundation models, the panel introduces concerns raised in particular by the UK Competition and Markets Authority (CMA) and the French Competition Authority (FCA)that firms perceived as controlling key inputs – principally data, cloud and skills – may restrict access in order to shield themselves from competition. Further concerns raised by authorities include the risk that cloud providers could exploit their market positions to distort foundation model choice, potentially engaging in self-preferencing à la Google Shopping (Case C-48/22 P Google and Alphabet v Commission). This discussion whets the appetite for a dissection of AI competition in a later episode.

Bringing the introductory session to a close, the panel also touches on concerns being raised by competition authorities that firms may be using strategic partnerships to reinforce, expand or extend existing market power through the value chain. This thorny issue is explored in greater detail later in the podcast series in an episode focussed on mergers and acquisitions, but at the outset thought is given to the importance of protections for investors in nascent technologies, with a parallel drawn to the pharmaceutical industry.

Panel

Ben Evans (chair) is a Postgraduate Researcher at the School of Law and Centre for Competition Policy, University of East Anglia. He is a member of the LIDC Scientific Committee.

Shruti Hiremath is Counsel in the Clifford Chance Antitrust Team in London.

Lauren Murphy is Founder and CEO of Friday Initiatives.

Sean Ennis is Director of the Centre for Competition Policy and a Professor of Competition Policy at Norwich Business School, University of East Anglia.


[1]  Further recent developments such as the development of more efficient models like DeepSeek’s R1 have also raised questions on the continued need for a large number of chips.

The LIDC NEX GEN Podcast Series on ‘Competition in Cloud and AI’ explores some of the most topical and hotly debated questions with a panel of leading international experts from academia, legal practice and industry.

The series was recorded  on 7 November 2024, and the views and opinions expressed therein reflect the legal context and state of affairs up to that date.

You can also watch or listen via the LIDC website, YouTube or Spotify.

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Ofcom issues review of Public Service Media 2019-23 https://www.scl.org/ofcom-issues-review-of-public-service-media-2019-23/ Fri, 20 Dec 2024 12:28:00 +0000 https://www.scl.org/?p=16663 Ofcom has published its review of public service broadcasting and says that broadcasters are delivering well for UK audiences, in challenging times. As part of its role to support and strengthen the quality of public service broadcasting (PSB), Ofcom has a duty to periodically review how television services provided by the BBC, ITV, STV, Channel...

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Ofcom has published its review of public service broadcasting and says that broadcasters are delivering well for UK audiences, in challenging times.

As part of its role to support and strengthen the quality of public service broadcasting (PSB), Ofcom has a duty to periodically review how television services provided by the BBC, ITV, STV, Channel 4, Channel 5 and S4C have delivered against the PSB purposes and objectives set by the UK parliament. This includes, among other things, an obligation to provide a broad range of high-quality programmes and genres that meet the needs and interests of many different audiences. Ofcom’s review also considers the contribution that the PSBs’ commercial portfolio channels, radio services, video-on-demand and other online services make to these objectives.

Its review has found that the PSBs have collectively delivered their purposes and objectives during 2019-23. In summary, its finding are:

  • Audiences rate the PSBs highly for delivering a wide range of UK programmes that appeal to different audiences, trusted and accurate UK news, and events that bring the nation together;
  • The PSBs have maintained overall levels of first-run output, but maintaining investment has been more challenging, with first-run spend declining in real terms. Overall commissioning spend has remained broadly stable in real terms due to third-party contributions;
  • The PSBs have delivered programmes across a wide range of genres. There has, however, been a moderate reduction in first-run UK originated hours in genres including specialist factual, arts and classical music, and children’s; and:
  • To reach and connect with all audiences, the PSBs have continued to develop their on-demand services. This has included significantly increasing the amount of UK-produced content on their players.

The review also identifies the challenges and opportunities for delivery of public service media in future. In particular:

  • The PSBs face a significant challenge in connecting with audiences. Their digital-first strategies have had some success, but time spent on their on-demand players has not been enough to offset declines in viewing to their traditional linear channels. At the same time all UK individuals now spend 32% of their daily in-home viewing minutes with streaming services and video-sharing platforms – and this forecasted to grow. Children aged 4 to 15 are more likely to watch YouTube, Netflix and TikTok than the BBC or any other PSB. To better connect with younger generations of viewers, the PSBs are placing their own content on third-party platforms, but they rely on the platform and its recommender system for curation and prominence.
  • The PSBs are facing significant financial challenges. Revenues are under pressure and the PSBs are struggling to replace their traditional income streams with new sources of revenue. They also need to deliver a wide range of content across multiple services to meet audiences where they are and increasingly compete with streaming services and video-sharing platforms for advertising revenue; and
  • It is becoming more challenging for the PSBs’ news content to cut through in the crowded online environment, where audiences are more likely to be exposed to misinformation and disinformation. Online sources and intermediaries such as social media, search engines and news aggregators are now widely used for news in the UK, and have significant influence over the news users consume. Ofcom says that it is more important than ever that audiences can easily find high-quality, accurate PSB news that adheres to high journalistic standards.

Next steps

In Summer 2025, Ofcom will publish its findings on how to maintain and strengthen the provision of public service media content for the next decade. This could include areas where it is planning to consult on changes to some of its rules, as well as identifying where further government intervention may be needed.

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CMA consults on unfair trading guidance https://www.scl.org/cma-consults-on-unfair-trading-guidance/ Wed, 18 Dec 2024 18:40:00 +0000 https://www.scl.org/?p=16641 The Competition and Markets Authority is consulting on draft guidance about the protection from unfair trading provisions in the Digital Markets, Competition and Consumers Act 2024. The unfair commercial practices (UCP) provisions in the DMCC Act prohibit unfair commercial practices, replacing and updating the Consumer Protection from Unfair Trading Regulations 2008. The UCP provisions: The...

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The Competition and Markets Authority is consulting on draft guidance about the protection from unfair trading provisions in the Digital Markets, Competition and Consumers Act 2024.

The unfair commercial practices (UCP) provisions in the DMCC Act prohibit unfair commercial practices, replacing and updating the Consumer Protection from Unfair Trading Regulations 2008. The UCP provisions:

  • contain prohibitions of practices that are likely to cause the average consumer to take a different transactional decision because of a misleading action, misleading omission, aggressive practice, or a contravention of the requirements of professional diligence.
  • prohibit the omission of material information from an invitation to purchase, 32 specific commercial practices in Schedule 20 to the DMCC Act, and the promotion of unfair commercial practices in codes of conduct.

The CMA has produced draft guidance on the UCP provisions which updates and, once finalised, will replace its current guidance.

The draft guidance illustrates how the UCP provisions may apply in practice and is intended to help traders to comply with them. In particular, it covers new provisions relating to drip pricing and fake reviews, both of which will be of particular interest to tech lawyers dealing with consumer-facing websites and apps.

Currently, only a court may determine whether a commercial practice had been unfair under the 2008 Regulations. After the DMCC Act’s consumer law enforcement provisions come into force, in addition to the courts, the CMA will also be able to decide whether a commercial practice is unfair under the DMCC Act, although the CMA’s decisions will be appealable to the courts.

The CMA’s consultation ends on 22 January 2025.

(B)CAP consultation on DMCC Act changes

In addition, the Committee of Advertising Practice (CAP) and the Broadcast Committee of advertising Practice (BCAP) are consulting about proposed amendments to their Codes to reflect the changes to UK consumer law in the DMCC Act. CAP and BCAP’s proposals cover all sections of the Codes that include rules derived from the 2008 Regulations, which are to be replaced by the relevant sections of the DMCC Act.

In addition, CAP and BCAP have identified certain other areas not connected to changes in the DMCC Act, where rules could benefit from more precise wording in alignment with the relevant underlying law, and where that could be achieved in a straightforward manner.

Most of the changes are in the sections on misleading advertising, as well as those setting out the legal background to the rules. There are also amendments to the following sections:

  • Recognition of marketing communications;
  • Children;
  • Use of data for marketing;
  • Medicines, medical devices, health-related products and beauty products; and
  • Environmental claims.

The consultation ends on 5 February 2025. CAP has also said that it will produce further guidance about fake reviews in due course.

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European Commission publishes results of Digital Fairness Fitness Check https://www.scl.org/european-commission-publishes-results-of-digital-fairness-fitness-check/ Fri, 01 Nov 2024 12:33:11 +0000 https://www.scl.org/?p=15719 The European Commission has published the findings of the Digital Fairness Fitness Check, which assessed if current EU consumer protection laws are fit for purpose to ensure a high level of protection in the digital environment. The Fitness Check covered three core Directives: the Unfair Commercial Practices Directive, the Consumer Rights Directive, and the Unfair...

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The European Commission has published the findings of the Digital Fairness Fitness Check, which assessed if current EU consumer protection laws are fit for purpose to ensure a high level of protection in the digital environment. The Fitness Check covered three core Directives: the Unfair Commercial Practices Directive, the Consumer Rights Directive, and the Unfair Contract Terms Directive. The Commission says that these rules remain both relevant and necessary to ensure a high level of consumer protection and effective functioning of the Digital Single Market. However, the review also shows that consumers behave differently online than offline. In addition, technological developments and increased tracking of online behaviour enable businesses to more effectively persuade consumers online. The review highlights the need for rules that are better adapted to the specific harmful practices and challenges that consumers face online.

Key findings

The three Directives have provided a degree of regulatory certainty and consumer trust to support the development of a diverse digital market, but consumers do not always feel fully in control of their online experience due to practices such as:

  • dark patterns in online interfaces that can unfairly influence their decisions, for example, by putting unnecessary pressure on consumers through false urgency claims;
  • addictive design of digital services that pushes consumers to keep using the service or spending more money, such as gambling-like features in video games;
  • personalised targeting that takes advantage of consumers’ vulnerabilities, such as showing targeted advertising that exploits personal problems, financial challenges or negative mental states;
  • difficulties with managing digital subscriptions, for example, when companies make it excessively hard to unsubscribe; and
  • problematic commercial practices of social media influencers.

Some of these practices may already go against existing EU consumer law and other EU law, for example, the Digital Services Act and the Audiovisual Media Services Directive.

The Commission also says that the effectiveness of EU consumer protection is undermined by insufficient enforcement , legal uncertainty, the increasing risk of regulatory fragmentation across member states’ national approaches, and the lack of incentives for businesses to aim for the highest standard of protection.

The European Commission will address the most harmful practices such as dark patterns. Increased legal certainty could prevent regulatory fragmentation and promote fair growth. It says that there is scope for simplifying existing rules, without compromising the level of protection.

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Google fined 2.4bn euros for preferring its own comparison shopping service https://www.scl.org/google-fined-2-4bn-euros-for-preferring-its-own-comparison-shopping-service/ Fri, 13 Sep 2024 13:17:00 +0000 https://www.scl.org/?p=14885 CJEU upholds General Court decision in Google Shopping case The Court of Justice of the EU has ruled in Case C-48/22 P | Google and Alphabet v Commission (Google Shopping). It upheld the fine of €2.4 billion that the European Commission had imposed on Google for abusing its dominant position by favouring its own comparison...

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CJEU upholds General Court decision in Google Shopping case

The Court of Justice of the EU has ruled in Case C-48/22 P | Google and Alphabet v Commission (Google Shopping). It upheld the fine of €2.4 billion that the European Commission had imposed on Google for abusing its dominant position by favouring its own comparison shopping service.

In June 2017, the European Commission found that, in 13 EEA countries, Google had given preference, on its general search results pages, to the results of its own comparison shopping service over those of competing comparison shopping services. This meant that Google had presented search results from its own comparison shopping service in a primary position and had promoted them in “boxes” with accompanying attractive image and text information.

By contrast the search results of competing comparison shopping services appeared as simple generic results (displayed in the form of blue links). Therefore, they were liable to be demoted by adjustment algorithms in Google’s general results pages, unlike Google’s own results.

The European Commission concluded that Google had abused its dominant position on the markets for online general searches and for specialised product searches and imposed the fine.

Google and its shareholder Alphabet challenged the Commission’s decision before the General Court of the European Union. In November 2021, the General Court largely dismissed the action and, in particular, upheld the fine. However, it did not consider it proven that Google’s practice had had (even potential) anti-competitive effects on the market for general search services. Consequently, it annulled the Commission’s decision to the extent that the Commission had also found an infringement of the prohibition of abuse of a dominant position for that market.

Google and Alphabet then lodged an appeal with the Court of Justice, seeking that the judgment of the General Court be set aside in so far as it had dismissed their action and that the Commission decision be annulled.

The Court of Justice has dismissed the appeal and upheld the General Court’s judgment. It said that EU law does not prevent the existence per se of a dominant position, but only the abusive exploitation of a dominant position. The conduct of undertakings in a dominant position that has the effect of hindering competition and is likely to cause harm to individual undertakings and consumers is prohibited. That conduct covers any practice which has the effect of hindering the maintenance or growth of competition in a market in which the degree of competition is already weakened, because of the presence of one or more undertakings in a dominant position.

The Court of Justice states that there is no general rule that a dominant undertaking which treats its own products or services more favourably than it treats those of its competitors is engaging in conduct which departs from competition on the merits irrespective of the circumstances of the case. However, in this case it ruled that the General Court correctly established that, in the light of the characteristics of the market and the specific circumstances of the case, Google’s conduct was discriminatory.

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UK government issues update about implementation of Digital Markets, Competition and Consumers Act https://www.scl.org/uk-government-issues-update-about-implementation-of-digital-markets-competition-and-consumers-act/ Wed, 11 Sep 2024 09:14:00 +0000 https://www.scl.org/?p=14823 Government’s implementation plans aim to deliver the Act’s benefits as quickly as possible,...

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The UK government has issued a statement in the UK parliament about the planned implementation of the Digital Markets, Competition and Consumers Act 2024, which received Royal Assent on 24 May 2024:

  • Part 1 of the Act will establish a pro-competition regime for digital markets.
  • Part 2 amends the competition regime.
  • Parts 3 and 4 strengthen the enforcement of consumer law and introduce new consumer protections, including tackling fake reviews and drip pricing, new rules for consumer saving schemes and introducing new rights relating to subscription contracts.
  • Part 5 contains miscellaneous measures including provisions which deal with investigative assistance to overseas regulators, disclosing information overseas, providing for a duty of expedition on the CMA and sectoral regulators, and giving the CMA new information gathering powers to support a function of monitoring competition in the retail motor fuel sector in the UK.

The government recognises the importance of implementing the Act as soon as possible.  It also acknowledges that those affected by the Act need to know when its changes will come into effect, so it is setting out its plans for implementation.

Key steps must be taken to implement the Act. Secondary legislation must be laid in Parliament, under powers set out in the Act, before the Act’s measures can be commenced and enter into force. The CMA must publish guidance setting out how it will carry out its functions and use its powers. The Secretary of State for Business and Trade must approve CMA digital markets guidance.

The government aims to commence Parts 1, 2 and 5 of the Act in December 2024 or January 2025. In the Autumn, secondary legislation will be laid before Parliament for scrutiny before it enters into force. The commencement order will be made at least 28 days before the commencement date.

In April 2025, the government expects to commence Part 3 of the Act, which provides for the consumer enforcement regimes, and Part 4, Chapter 1 of the Act, which replaces the Consumer Protection from Unfair Trading Regulations 2008. Secondary legislation will set out rules for the CMA’s new direct enforcement powers, alongside guidance on these new powers. New savings schemes rules will not commence before April 2025, and the government says that this timeline is subject to continuing engagement with consumers and industry. Reforms to subscriptions contracts and alternative dispute resolution will follow later, with subscriptions reforms not commencing before Spring 2026, at the earliest. These timelines follow commitments made in the previous Parliament, and according to the government, reflect the quickest possible delivery of the reforms, while ensuring that the necessary consultation and other steps can take place.

The Government’s implementation plans aim to deliver the Act’s benefits as quickly as possible, while allowing those that will be affected by them adequate time to prepare.

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