The UK’s Information Commissioner’s Office (the “ICO”) has recently sent warnings to the UK’s most visited websites to inform them that they may face enforcement action if they do not make changes to their cookie banner to ensure compliance with UK data protection law. For example, some websites warned by the ICO do not provide their user with a fair choice on tracking for personalised advertising. This position aligns with the EU’s stance, noting France (see prior Alert here).

The ICO’s actions are part of a larger commitment to ensure individuals’ privacy rights are upheld by companies active in the online advertising industry. Publishers receiving a warning only have 30 days to amend their websites in line with UK GDPR. As further incentive for publishers to get compliant, the ICO has also warned that it will publish the details of those websites that have not made the requested changes in January. Such publicity may be even less welcome than the potentially large fines associated with breach of the data protection framework.

The statement made by the ICO highlights once again the importance for companies to review how cookies are used on their websites and how their cookie banners, along with the cookie consent management solution, are displayed. To be compliant, websites must make it as easy as possible for users to reject all advertising cookies. Personalized advertising can be compliant as long as it is based on the user’s consent. In case users reject all advertising cookies, websites can only show general adverts that are not tailored to the users’ browsing history. Consequently, websites should display a cookie banner that makes it as easy for users to reject cookies, as it is for them to accept cookies.

The ICO’s guidance in relation to cookie banners can be found here, which may need to be further updated with the newly presented Data Protection and Digital Information Bill.

First publication: Cyber Law Watch Blog with Sophie Verstraeten

On 18 October 2023, the French National Assembly voted in favour of a law aiming to secure and regulate the digital space (“Loi visant visant à sécuriser et réguler l’espace numérique” or “SREN”), otherwise called the “Sorare Act.” This new development marks a first step towards the establishment of a regulatory framework dedicated to games integrating non-fungible tokens (NFTs) and monetisation models based on digital assets.

These new provisions are aimed at the creation of a new category of games under French law called games with monetisable digital objects (“jeux à objets numériques monétisables” or “JONUM”). This new regime will enter into force ‘on an experimental basis and for a period of three years’ from the promulgation of the law and will authorise Web3 games with monetisable digital objects (including NFTs).

The Sorare Act defines JONUMs as “game elements, which only confer on players one or more rights associated with the game, and which may be transferred, directly or indirectly, for consideration to third parties,” while excluding digital assets covered by 2° of Article L. 54-10-1 of the French Monetary and Financial Code.

France is one the first jurisdictions in the world to create a specific regime for companies using NFTs as part of their games and the objective is to provide certainty to the industry.

Please reach out to our team if you need further information on this new development. 

First publication: K&L Gates Hub, in collaboration with Lucas Nicolet-Serra

A bit of Jyn Erso to wrap up the week!

New episode of K&L Gates Gateway to Privacy is out, and this time with our first external guest — our dear friend Arya Tripathy joins us with Whitney McCollum and Camille Scarparo for a deep dive into India’s new data protection law, the Digital Personal Data Protection Bill, 2023.

What’s to know, what’s to expect? Listen and find out!

Post-Brexit EU businesses have needed to rethink how they approach showing compliance with a host of regulations, managing international data transfers and building trust with data subjects. Having to comply with the GDPR, prepare for other data protection bills, all while continuing to comply with the EU-GDPR as well as a host of global regulations means businesses might look to certification as a common system for adequacy as a one-stop shop, when addressing the overlaps and more crucially closing the gaps on their privacy compliance programs.

Featured speakers:

  • Noshin Khan, Senior Compliance Counsel, Ethics Center of Excellence, OneTrust 
  • Claude-Étienne Armingaud, Partner, K&L Gates

Register here.

This panel session will focus on the growing concern over the ethical use of Artificial Intelligence (AI) and its impact on privacy. The panelists will discuss the role of accountability in developing responsible AI practices and the potential risks of AI systems when not properly regulated. They will also explore the importance of transparency and the need for data privacy regulations in the development and deployment of AI technologies. The session will provide insights into best practices for AI governance and how organizations can ensure the ethical use of AI while still benefiting from its potential.

Co-Panelists:

#AI #ArtificialIntelligence #gdpr #ethics #dataprotection #regulation #insights23 #pecb #Privacy #Accountability

The UK Government has laid adequacy regulations before Parliament that, once in force from 12 October 2023, will permit use of the UK – US “Data Bridge” as a safeguard for personal data transfers from the UK to the US under Article 44 UK GDPR.

The UK – US “Data Bridge,” AKA the UK Extension to the EU – US Data Privacy Framework (Framework), allows UK organisations to transfer personal data to organisations located in the United States that have self-certified their compliance with certain data protection principles and appear on the Data Privacy Framework List. This scheme, administered by the US Department of Commerce, provides a redress mechanism for data subjects in the European Union to enforce their rights under the EU General Data Protection Regulation, in relation to a participating US organisation’s compliance with the Framework, and to US national security agencies’ access to personal data. This new redress mechanism attempts to prevent a challenge to the Framework similar to the Schrems II case, which invalidated the Framework’s predecessor EU – US Privacy Shield. Despite this, the Framework has already been the subject of a short-lived case at the Court of Justice of the EU, and there may be more legal challenges.

Alongside the adequacy regulations, the UK government published an analysis of the US laws relating to US national security agencies’ access to the personal data of European data subjects. This analysis effectively completes the international data transfer risk assessment (TRA), which UK organisations have been required to carry out before transferring personal data to the US. It is likely that UK organisations relying on the other Article 44 UK GDPR safeguards, such as the International Data Transfer Agreement, may also rely on this analysis in place of completing a TRA.

First publication: K&L Gate Cyber Law Watch Blog in collaboration with Noirin McFadden

Amidst a sudden increase in paid-for posts that went viral for dubious products and services, France has taken a significant step toward the regulation of influencer communication. The Act no. 2023-451 (Influencers Act), which came into effect on 9 June 2023, aims not only to protect consumers but also to support the influencers, in order to foster the healthy growth of this ecosystem. France is now the first European Union (EU) country to implement a thorough framework regulating commercial influence.

Background information

Digital influencers have changed the way companies can promote their products and services, from beauty and fashion to technology, notably by blurring the lines between commercial advertising and genuine consumer reviews.

Between 8 to 31 January 2023, the French Ministry of the Economy conducted a public consultation on the influencer ecosystem, to evaluate of the contemplated regulation, which received an overwhelming support from the panels.

Key provisions beating on influencers

General ban on certain communications

The following communications are explicitly banned from any influencer communication:

  • Cosmetic surgery and procedures;
  • Alternative therapeutic technics;
  • Nicotine-based products;
  • Non-domestic animal trade.
  • Certain financial services, notably as they pertain to blockchain-based services (e.g. NFT); and
  • Online gambling and betting;

With regard to the latter, the communication remains possible provided that it occurs exclusively on platforms restricted to adults over the age of 18 and subject to the usual specific disclaimer pertaining to the advertising of such services.

Mandatory labeling

The Influencers Act requires influencers to label:

  • Their promoted posts with the mention “advertisement” or “commercial collaboration” in a clear, legible and identifiable manner to avoid falling under misleading commercial practices further to Art. L. 121-3 of the French Consumer Code (“FCC”).

Influencers failing to comply with this obligation face up to 300,000 euros in fines and up to two years of imprisonment (Art. 5 Influencers Act).

  • The pictures (still or moving) they post and which have been
    • edited to enlarge or refine the general appearance or modify the appearance of the model’s face to clearly include the “Retouched images” mention; or
    • generated through artificial intelligence (AI), notably generative AI (gen AI) to clearly include a “Virtual image” disclaimer

Influencers failing to comply with this obligation face up to 4,500 euros in fines and up to one year of imprisonment (Art. 5 Influencers Act).

Drop-shipping

In case of sales of goods through a third party (so-called “drop-shipping” practices), influencers will need to abide by obligations of transparency about the identity of the supplier, pursuant to Art. L. 221-5 of the FCC and will bear the liability relating to the legality and availability of the promoted products.

Content moderation and insurance

Influencers based outside of the European Economic Area or Switzerland but directing their activities to a French audience are required to appoint a legal representative in the EU, as well as to subscribe to a dedicated insurance covering the potential damage resulting from their activities.

Key provisions bearing on platforms used by influencers

Further to the entry into force of the European Regulation no. 2022/2065 on a Single Market for Digital Services (Digital Services Act or DSA) on 25 August 2023, the Influencers A amended the Act no. 2004-575 of 21 June 2004 for trust in the digital economy (Loi pour la Confiance dans l’Économie Numérique or LCEN) increasing the burden on digital platforms, notably for such platforms which allow influencers to conduct their activities.

These platform now have the obligation to promptly remove any illegal content which would be notified through the “trusted flaggers” introduced under Art. 22 DSA.

Key provisions bearing on brands

  • The Influencers Act now mandate a written contract between the influencer and the advertised brands, or their respective representatives. This contract, which must imperatively be subject to French law, must include:
  • The identity of the parties, including their domiciliation for tax purposes;
  • The detailed nature of the influence services;
  • The financial compensation or any equivalent advantage resulting from the influence services;
  • As the case may be, any provision pertaining to intellectual property.

With regard to liability on the influence services, a joint and several liability between the brand and influencer has been implemented, rendering the brand de jure liable for any damage caused to third party.

Enforcement of the Influencers Act

Just prior to the summer holidays, the French Ministry of the Economy appointed a team of 15 agents responsible for monitoring social networks and responding to complaints.

In parallel, the French Directorate General for Consumer Affairs, Competition and Fraud Prevention (“DGCCRF”) audited fifty influencers in the first quarter of 2023, resulted in 60% of the audited influencers to be found in breach of the then-current (and pre-Influencers Act) misleading commercial practice framework.

These findings led to eighteen injunctions to cease illicit practices and sixteen criminal reports. In the following context, in July, the DGCCRF published a code of conduct for influencers and content creators in July, explaining their duties and obligations in accessible language.

Whether you are a brand considering hiring the services of influencers or an influencer yourself, the K&L Gates Luxury Product & Fashion team remains at your disposal to assist you in your compliance with the new French framework.

First publication: K&L Gates Fashion Law Watch Blog in collaboration with Camille Scarparo.

K&L Gates ranked “Highly Recommended 1/2” with Claude-Etienne Armingaud.

Source: Leaders League

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K&L Gates ranked “Recommended” with Claude-Etienne Armingaud.

Source: Leaders League

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This series of webinars will address the potential impacts of artificial intelligence (AI) regulations on business across the globe. Recent developments in general availability of AI and generative AI solutions are leading regulators, at a global level, to consider legal frameworks to protect both individuals affected by AI and digital sovereignty. Our panelists will address these potential regulatory developments, as well as the expected timeline for these changes, region by region.  

Our first panel will feature a discussion focused on current and future regulatory requirements on the AI industry throughout the EU and the UK. With the language of the EU’s Al Act heading into its trialogue, it is even more important for stakeholders to understand the EU’s approach and prepare for the potential impact of this regulation in Europe, UK, and beyond. The panelists will address key questions, such as:

  • What new undertaking will be bearing on the stakeholders in this industry?
  • Will government regulation be “technology neutral”?
  • Could the various frameworks lead to conflicts for local compliance efforts?
  • Will a requirement for an AI system to explain its thinking or provide substantive sources for all results have a deleterious impact on its ability to “think” independently?  
  • Is it too late for stakeholders to have a say in these expected frameworks?

Speakers:

Claude-Étienne Armingaud | PARTNER | PARIS

Giovanni Campi | POLICY DIRECTOR | BRUSSELS

Jennifer Marsh | PARTNER | LONDON

Register here: K&L Gates Website

Watch the recording here.