August may be perceived as the month where France shuts down for the summer. Yet, just before the summer ’23 holiday, the French Data Protection Authority (“CNIL”) published several call to action for the various players of the data ecosystems in general and in artificial intelligence (AI) in particular, following its 16 May 2023 announcement of an AI action plan:

  • Opening and re-use of publicly accessible data – The CNIL published a draft guidance on the such data usage, and all stakeholders are invited to weight in until 15 October 2023 before its finalization. While non-binding, this guidance is expected to lead the way on how the EU’s Supervisory Authority will apprehend and enforce the General Data Protection Regulation (“GDPR”) when personal data is scraped from online sources and subsequently used for subsequent purposes. This notably focuses on Art. 14 GDPR and the indirect collection of personal data and specific prior information requirements. Artificial Intelligence is explicitly mentioned by the CNIL in the draft, as such data, which feeds large-language models, “undeniably contributes to the development of the digital economy and is at the core of artificial intelligence.” Stakeholders are invited to submit their observations online through the dedicated portal.
  • Artificial Intelligence Sandbox – Following in the footsteps of its connected cameras, EdTech & eHealth initiatives, the CNIL is launching an AI sandbox call for projects, where stakeholders involved in AI in connection with public services may apply to receive dedicated assistance by the regulator to co-construct AI systems complying with data protection and privacy rules.
  • Creation of databases for Artificial Intelligence uses – Open to the broadest possible array of stakeholders (including individuals), this call for contributions notably addresses the specific issue relating to the use of publicly accessible data and aims at informing the CNIL of the various positions at play and how to balance GDPR’s requirements (information, legitimate interests, exercise of rights) with data subjects’ expectations. Stakeholders are invited to submit their observations online through the dedicated form (in French – our free translation in English is available below)- no deadline for submission has been set.
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On 14 June 2023, the European Parliament (Parliament) plenary voted on its position on the Artificial Intelligence Act (AI Act), which was adopted by a large majority, with 499 votes in favor, 28 against, and 93 abstentions. The newly adopted text (Parliament position) will serve as the Parliament’s negotiating position during the forthcoming interinstitutional negotiations (trilogues) with the Council of the European Union (Council) and the European Commission (Commission).

The members of Parliament (MEPs) proposed several changes to the Commission’s proposal, published on 21 April 2021, including expanding the list of high-risk uses and prohibited AI practices. Specific transparency and safety provisions were also added on foundation models and generative AI systems. MEPs also introduced a definition of AI that is aligned with the definition provided by the Organisation for Economic Co-operation and Development. In addition, the text reinforces natural persons’ (or their groups’) right to file a complaint about AI systems and receive explanations of decisions based on high-risk AI systems that significantly impact their fundamental rights.

Definition

The Parliament position provides that AI, or an AI System, should refer to “a machine-based system that is designed to operate with varying levels of autonomy and that can, for explicit or implicit objectives, generate outputs such as predictions, recommendations, or decisions, that influence physical or virtual environments.” This amends the Commission’s proposal, where an AI System was solely limited to software acting for human-defined objectives and now encompasses the metaverses through the explicit inclusion of “virtual environments.”

Agreement on the final version of the definition of AI is expected to be found at the technical level during trilogue negotiations, as it does appear to be a noncontentious item.

Another notable inclusion relates to foundation models (Foundation Models) that were not yet in the public eye when the Commission’s proposal was published and were defined as a subset of AI System “trained on broad data at scale, is designed for generality of output, and can be adapted to a wide range of distinctive tasks.

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On 27 October 2022, the Digital Services Act (DSA) was published in the EU Official Journal as Regulation (EU) 2022/2065, with the aim to fully harmonize the rules on the safety of online services and the dissemination of illegal content online. The Digital Services Act will require online intermediaries to amend their terms of service, to better handle complaints, and to increase their transparency, especially with respect to advertising.

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Read the full text.

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The UK Government has finally published its highly anticipated Data Protection and Digital Information Bill (the Bill), marking the first significant post-Brexit change to the UK’s data protection regime. Following Brexit, the UK continued following the EU General Data Protection Regulation, incorporated into UK law as the UK GDPR, and the UK implementation of the EU ePrivacy Directive, the Privacy and Electronic Communications Regulations 2003 (PECR), also remained in force.

The Bill is only at the start of the legislative process, and it remains to be seen how it will develop if it is amended during its passage through Parliament, but early indications are that it represents more of an evolution than a revolution in the UK regime. That will come as a relief to businesses that transfer personal data from the EU to the UK, because it reduces the risk that the EU might rescind the UK’s adequacy status.

For a start, the Bill actually preserves the UK GDPR, its enabling legislation the Data Protection Act 2018, and the PECR, because it is drafted as an amending act rather than a completely new legislative instrument. This does not contribute to user-friendliness, as interpreting UK data protection requirements will require a great deal of cross-referencing across texts.

The more eye-catching proposed changes in the Bill include:

  • The inclusion of a list of “legitimate interests” that will automatically qualify as being covered by the lawful basis in UK GDPR Article 6(e).
  • Some limitations on data subject access requests, such as the possibility of refusing “vexatious or excessive” requests.
  • More exemptions from the requirement to obtain consent to cookies.
  • Much higher fees for breach of PECR.

The Bill will now progress through various Parliamentary stages over the coming months in order to become law.

First Publication: K&L Gates Cyber Law Watch in collaboration with Noirin McFadden & Keisha Phippen

On 29 June 2022,  Decree n° 2022-946 (the “Decree”) supplemented the regulatory framework resulting from the Ordinance n° 2021-1247 of 29 September 2021 on the legal warranty of conformity for goods, digital content and digital services (the “Ordinance”). Stakeholders have under 1 October 2022 to implement the following measures, aiming at protecting consumers of digital goods.

1. General information about the Ordinance

Implementing two 2019 European directives on certain aspects of contracts for the supply of digital content and digital services and contracts for the sale of goods (respectively Directives (EU) 2019/770 and 2019/771 dated 20 May 2019), the Ordinance aimed to foster the safety of consumers when purchasing both physical and digital goods and, to a lesser extent, to reduce the environmental impact of digital goods.

This Ordinance amended the French Consumer Code in depth, notably by expanding the legal warranty of conformity, which now covers digital products and services but is also applicable to both B2C as well as B2B contracts, when the latter are executed between professionals and non-professionals (i.e. legal entities acting outside of their direct professional activities).

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Quoted by Global Data Review:

Claude-Étienne Armingaud, a partner at K&L Gates in Paris, said the decision would have little impact in practice.

“The new sections adopted in July 2021 are implementing specific and targeted data retention requirements which should therefore comply with both the ECJ decisions and the Constitutional Council decision of today,” he said.

“So, if anything, it’s a tardy decision that was expected and confirmation that the Government did well to anticipate this.”

Read full article here.

FEDERAL DECREE-LAW NO. (45) OF 2021 ON PERSONAL DATA PROTECTION

Read the full text.

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Through its Act no.2020-1266 dated 19 October 2020 (the Act), the French legislator elected to regulate the commercial exploitation of the images of children aged 16 and under on online platforms (Kidfluencers).

Despite the potentially lucrative consequences of these emerging practices, Kidfluencers operated in a legal vacuum which could have resulted in parents exploiting their children, without the latter reaping any financial benefits or regaining any control of their images upon coming of age.

First and foremost, the Act extends the existing legal framework of child models, under Article L7124-1 of the French Labor Code (FLC). As such, Kidfluencers will require a written authorization from the French Administration prior to being engaged or broadcasted, inter alia:

  • By any entertainment provider, regardless of the medium or broadcast type;
  • In order to perform “modeling activities,” broadly defined under Article L7123-2 FLC as presenting oneself, directly or indirectly through the reproduction of one’s image, either through photographs or video, notably by presenting a product, service of commercial message;
  • By eSport competition organizers; and
  • By “Employer whose activities consist in creating audiovisual recording whose main subject is a child aged 16 or under, for the purpose of for-profit broadcasting on an online video sharing platform”.

The latter category was notably introduced to characterize the parents or legal guardians of the influencers as the “employer” of the Kidfluencer. As they may not be as aware of the legal undertakings as the other providers and organizers mentioned, the Administration will provide them with specific information relating to the Kidfluencers’ rights and the risks associated with exhibiting their image online.

Moreover, a portion of the revenue gained by Kidfluencers would be placed in escrow on a French public bank account until their majority.

Secondly, in situation when the broadcast would not be performed for profit, the Act introduces additional protective measures for Kidfluencers: instead of a prior authorization, a simple declaration of the activity will be required, when the published content exceeds certain thresholds in terms of (i) duration or individual items; or (ii) direct or indirect revenues. Such thresholds will be addressed in a supplemental decree to be adopted shortly.

Failing to obtain the authorization or to proceed with the notification would entitle the Administration to seize a court in order to take down the related content.

Finally, the Act also implements a collaborative framework for the online video sharing platforms, and enjoin them to publish dedicated policies to aiming at

  • Informing users of the applicable Kidfluencers’ regulatory framework;
  • Informing Kidfluencers directly of the consequences on their private life of the broadcasting of their image, of the legal and psychological consequences and of the means they have to protect their rights and dignity;
  • Encouraging users to report any content involving Kidfluencers that could affect their dignity, psychological or physical integrity;
  • Preventing the processing of personal data relating to minors for commercial purposes, such as targeted advertisement, further to the broadcasting a Kidfluencers video;
  • Detecting situations where the recording or broadcasting of Kidfluencers’ videos could impact their dignity, psychological or physical integrity; and
  • Helping Kidfluencers to easily exercise their right to be forgotten on the video-sharing platforms.

While a welcomed step to protect children online, sometimes from their own families, the Act will need to be completed with regard to the thresholds triggering its applicability. In addition, by mainly addressing online video sharing platforms, the Act could have benefited from a more homogenous framework for online platform allowing the sharing of both still and moving pictures. Indeed, while still images could be included in the modeling provision, it remains to be seen how extensively it will be enforced.

Amidst the current discussions surrounding the Digital Services Act at the European level, this France-specific framework creates yet another undertaking for online platforms to implement additional measures to support public policies. And by encouraging users to report any content involving Kidfluencers that could affect their dignity, psychological or physical integrity, the Act could generate extra-territorial consequences, forcing the platforms to deploy such reporting mechanism at a global scale.

K&L Gates IP/IT team in Paris remains available to assist you in assessing the changes triggered by this Act. Please get in touch if you would like to discuss the steps that your organization might want to consider to prepare now for this new Kidfluencer framework.

First publication: K&L Gates Fashion Law Watch

The California Consumer Privacy Act of 2018 (CCPA) stands to radically change the way organisations throughout the United States, and even the world, handle personal data. Coming into force on 1 January 2020, CCPA has motivated other U.S. states such as Washington and Texas to move toward having their own privacy laws. Increasingly, pressure is building in Washington, DC, to advance federal privacy legislation, both on the domestic and international scene. In addition to Japan obtaining a GDPR-adequacy recognition (followed soon by Korea and India), Brazil has adopted its General Data Protection Act (GDPA) which is heavily inspired by the EU GDPR and will come into force in August 2020. In this session, hear about the new laws and legislative initiatives, how they will change the way you do business internationally and how to get prepared.

Along with Delphine Charlot, CIPP/E, Senior Counsel, Privacy and Data Protection, Mastercard