European Union Launches Revolutionary Proposals to Regulate “Big Tech”
On December 15, the European Commission (Commission) proposed drafts of two landmark digital legislative packages — the Digital Markets Act (DMA), which proposes new competition rules for so-called “gatekeeper” platforms to address alleged unfair practices and make them more contestable by competitors, and the Digital Services Act (DSA), which recommends revamping content moderation rules for “very large online platforms.”
The new rules, if they pass into law in their current form, would impose a stringent regulatory regime on Big Tech and give the Commission new enforcement powers. The draft regulations foresee severe fines for noncompliance — up to 10% of a company’s global revenues under the DMA and up to 6% under the DSA. The Commission would also be able to impose structural remedies, such as obliging a gatekeeper to sell all or part of a business, on companies that repeatedly engage in anticompetitive behavior prohibited by the DMA.
The proposals mark the beginning of a legislative process that is likely to be controversial and hotly contested, as there are marked differences of opinion on whether these proposals go too far, do not go far enough, or are necessary at all in light of preexisting competition powers.
An Early Recap of Privacy in 2020: A US Perspective
*This article was adapted from “Global Overview,” appearing in The Privacy, Data Protection and Cybersecurity Law Review (7th Ed. 2020)(Editor Alan Charles Raul), published by Law Business Research Ltd., and first published by the International Association of Privacy Professionals Privacy Perspectives series on September 28, 2020.
Privacy, like everything else in 2020, was dominated by the COVID-19 pandemic. Employers and governments have been required to consider privacy in adjusting workplace practices to account for who has a fever and other symptoms, who has traveled where, who has come into contact with whom, and what community members have tested positive or been exposed.
As a result of all this need for tracking and tracing, governments and citizens alike have recognized the inevitable trade-offs between exclusive focus on privacy versus exclusive focus on public health and safety.
European Data Protection Board Adopts Data Protection by Design and by Default Guidelines
On 13 November 2019, the European Data Protection Board (“EDPB”) adopted guidelines on the GDPR’s data protection by design and by default principle (“Guidelines”). The Guidelines provide further guidance into the technical and organizational measures and safeguards that data controllers must take into account when designing their processing activities. The EDPB encourages early consideration of data protection by design and by default principles (“DPbDD”) and considers DPbDD to be at the forefront of GDPR compliance. Data controllers, processors and technology providers should consider re-assessing their processing operations and products against the standards put forward in the Guidelines.
Hong Kong Regulator Imposes New Conditions to Regulate Outsourcing Arrangements for Cloud Storage
The Securities and Futures Commission of Hong Kong (SFC) issued new guidance to regulate the use of external electronic data storage providers (EDSPs1) by licensed firms that intend to keep (or have previously kept) records or documents required to be maintained pursuant to the statutory recordkeeping rules and anti-money-laundering regime (Regulatory Records) in an online environment. The new guidance2 and related FAQs released October 31, 2019, while extensive and significant, confirm the Hong Kong regulator’s willingness to provide firms with a degree of flexibility in complying with the statutory recordkeeping obligations and clarify the baseline obligations when entering into outsourcing arrangements for the storage of records in electronic format with third-party vendors. (more…)
Potential Congressional Action on Cross Border Data? A Primer on the CLOUD Act
In recent years, the rise of cloud computing has led to more and more data being stored somewhere other than the jurisdiction in which it was created. This trend increasingly has led U.S. law enforcement officials to demand access to information held abroad, just as foreign officials increasingly want access to data held inside the United States. But satisfying these growing desires for cross-border access has proven complicated. The Mutual Legal Assistance Treaty (MLAT) process has not kept pace with the Internet-fueled increase in data requests, nor has a workable alternative to that process emerged. And questions remain as to whether relevant U.S. statutes authorize extraterritorial legal process. Even if law enforcement officials do have tools that allow them to seek data held elsewhere, the holders of such data may face a conflict between their obligations to respond to one country’s lawful process and the obligations to comply with another country’s privacy protections or blocking statutes. (more…)
U.S. Supreme Court to Weigh in on Extraterritorial Search Warrant Dispute
On October 16, 2017, the U.S. Supreme Court granted the U.S. government’s request for review of a lower court decision that rejected the government’s construction of the Stored Communications Act (SCA) and embraced a more restrictive view that Microsoft had advanced, backed by much of the tech industry and many privacy groups. (more…)
Second Circuit Microsoft Ruling: A Plea for Congressional Action
*This article originally appeared in Law360 on August 1, 2016.
On July 14, 2016, the U.S. Court of Appeals for the Second Circuit issued a long-awaited decision that — to the surprise of many observers — rejected the government’s construction of the Stored Communications Act and instead embraced a more restrictive view that Microsoft Corp. had advanced, backed by much of the tech industry and many privacy groups. The decision holds that electronic communications that are stored exclusively on foreign servers cannot be reached by U.S. prosecutors under the SCA’s warrant provisions — not even where the warrant is served on a U.S. provider that can access the foreign-stored information, and deliver it to U.S. officials, entirely by using computers and personnel based here in the United States. Microsoft Corp. v. USA, In the Matter of a Warrant to Search a Certain E‐Mail Account Controlled and Maintained by Microsoft Corporation (2d Cir. July 14, 2016)( Docket No. 14‐2985).
Second Circuit Sides With Microsoft; Data Exclusively Stored On Foreign Servers Not Subject to SCA Search Warrant
On July 14, 2016, the U.S. Court of Appeals for the Second Circuit issued a long-awaited decision that—to the surprise of many observers—rejected the government’s construction of the Stored Communications Act (SCA) and instead embraced a more restrictive view that Microsoft had advanced, backed by much of the tech industry and many privacy groups. Microsoft Corp. v USA, In the Matter of a Warrant to Search a Certain E‐Mail Account Controlled and Maintained by Microsoft Corporation (2d Cir. July 14, 2016)( Docket No. 14‐2985). (Sidley Austin LLP represented a number of amici in support of Microsoft before the Court of Appeals and District Court.) The decision holds that electronic communications that are stored exclusively on foreign servers cannot be reached by U.S. prosecutors under the SCA’s warrant provisions—not even where the warrant is served on a U.S. provider that can access the foreign-stored information, and deliver it to U.S. officials, by using computers and personnel based here in the United States.
The Opportunities and the Challenges of Big Data for Business and Public Policy*
*Based on Remarks at the Big Data East Big Data Innovation Conference, September 9, 2015
I believe in the enormous potential of big data. Erik Brynolfsson and Andrew McAfee, authors of The New Machine Age and leading scholars of the digital economy, have compared the power and granularity of computational science to the transformation in understanding of nature that occurred when Anton Van Leuwenhook first peered at samples through his newly-invented microscope. We are seeing new advances in medicine, in social science, new ways of teasing out causation from correlation.
Update on Impending Russian Data Localization Law
Despite having previously stated it would not issue further clarifications, in August 2015, the Russian Ministry of Communications and Mass Media (Minkomsvyaz) issued a further statement regarding the data localization law. The Ministry of Communications is empowered to supervise the data protection authority (Roskomnadzor) and to provide interpretations of laws that fall within their purview (including the data localization law). The Minkomsvyaz statement reiterated that the law does not have retroactive effect – personal data of Russians collected prior to September 1, 2015 may reside in foreign jurisdiction so long as they are not updated or changed, at which point they would be subject to the localization requirement. The clarification further noted that data localization requirement would not apply to entities that are not resident in Russia. This statement is notable for being issued in writing, and providing companies with a statement of standards and expectations that may be cited by companies should issues arise.
See previous coverage in Data Matters July 21, 2015 Post: Impending Russian Data Localization Law
Sidley does not practice law in Russia, so the information here is based on our understandings from public sources and discussions with local counsel. This article should not be construed as advice about Russian law.