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As the world delves deeper into the digital era, it is paramount to be equipped with the understanding and knowledge of how cross-border data flows and digital trade play into the larger picture of international relations, commerce, and technology advancements. Digital Economy's Lifeline: Cross-Border Data Flows Significance: It is crucial for the modern economy. It supports financial transactions, communications, service access, efficient manufacturing, and medical research. It is vital for the growth and implementation of artificial intelligence (AI) due to AI's reliance on vast data. Landmark Trade Agreements: United States-Mexico-Canada Agreement (USMCA) Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) Rise of digital-specific trade agreements. Objectives for the Future: A continuous commitment to promote open data flows between nations. Need for a balanced approach taking into account: privacy concerns, national security considerations, industrial policy. Principle Guiding Data Flow: "Data Free Flow with Trust" (DFFT) Aim: Encourage openness in cross-border data transfers between collaborating countries. Challenges and Considerations: Various stakeholders with diverse, sometimes conflicting, interests in data collection, storage, processing, and movement. Not guaranteed that future rules will be identical to previous ones. The Evolving Trade Environment Changes and Challenges: Impact of changes in US domestic politics. Geopolitical tensions. Increased focus on US-China relations. Supply chain disruptions. Rapid technological advancements, notably the significant rise of AI and its safety concerns. Potential Consequences: Adjustments in business strategies and trade flows. Re-evaluation of regulatory approaches in weighing policy objectives and security against commerce and innovation barriers. Possible slowdown in the development of trade disciplines or further segmentation of the global digital economy. Barriers, Architecture, and Initiatives in the Digital Economy Examination of: The increasing barriers to cross-border data flows. The existing global legal framework governing the digital economy, focusing on the World Trade Organization (WTO) and trade agreement disciplines related to such barriers. Future Directions: Exploration of upcoming digital trade initiatives. Ongoing US endeavors to establish agreements that harmoniously balance digital trade facilitation, international data flow, and government regulation for public welfare. Artificial Intelligence: The New Player in Trade AI's Role: Significantly reliant on vast datasets. Highlights the gravity of data flow obligations within trade agreements. Brings to light fresh regulatory questions. AI's potentially pivotal role in upcoming negotiations on digital trade and data flows. Why Data Matters to AI Processing Needs: Handling vast amounts of data for training and insights. Direct link to rules governing cross-border data transfers. AI leans heavily on cloud computing services and data collection from the Internet of Things (IoT). Hardware Dependency: Advanced semiconductors are crucial for AI development and have recently come under trade policy scrutiny. Potential Roadblocks to AI Progress Data Transfer Restrictions: This can decelerate AI development by curbing access to essential training data and vital commercial services. Cross-Border Data Advantages: Ensures access to commercial services and international talent. Cloud computing services: a crucial tool for training models, particularly benefiting smaller companies lacking the infrastructure for hardware development. Emerging Concerns in the AI Landscape Regulatory Gaps: AI's rapid growth brings risks like AI weaponization, misinformation proliferation, surveillance, biases, intellectual property protection. Regulators' Tightrope Walk: Balancing industry needs with potential risks. As they probe into areas like data gathering, algorithm development, and advanced semiconductor utilization, newly minted rules could affect cross-border data flows broadly. AI's Evolving Regulatory Fabric Emergent Frameworks: AI Act in the EU. Voluntary AI Commitments in the US. The Challenge Ahead: Striking a balance between industry openness and risk management. The starting phase of international coordination. Private Sector's Critical Role: Input from key tech giants pivotal in shaping, operating, and upkeeping international legal structures governing cross-border data flows. Forms of Data Localization Measures: Data Localization: A favored tactic employed by multiple governments. Data Mirroring: Necessitating companies to retain copies of specific data domestically before an external transfer. Local Data Storage Rules: Mandating firms to house data within the originating country's confines. "De facto" Local Storage: Firms opt to localize data storage due to the stringent norms on data export. Selective Data Transfer Restrictions: Limiting data export to nations recognized for adequate data protection. Total Data Transfer Bans: Complete restriction on transferring certain datasets to foreign territories. Regulatory Mandates: Using mechanisms like licensing and certification to enforce local data storage and prevent foreign entities from handling and processing data. Other Prevalent Digital Trade Barriers: Digital Service Restrictions: Constraints on offering digitally-enabled services. Governmental Data Access: Compulsory access to data for authorities. Confining Tech Specifications: Imposing requirements like revealing software source code and algorithms. Governments' Rationale for Digital Trade Impediments: Privacy and data protection. Intellectual property rights defense. Regulatory oversight or auditing aims. National security considerations. On the flip side, in certain scenarios, these measures reek of sheer protectionism or ambitions to foster domestic frontrunners in a specific domain. The standing viewpoint of consecutive US governments indicates skepticism towards regulations devoid of genuine public policy rationale. They identify such rules as potential threats to the modern economy's growth, advocating for trade disciplines that deter such obstructions. WTO's Legacy and Adaptation to the Digital Age Historical Context: Cross-border data flows have exponentially grown since the inception of WTO agreements in 1995. Original WTO agreements did not specifically address emerging issues like data flows and localization. Relevance to the GATS: The growth in global data flows mainly ties to the digital delivery of services. The WTO's General Agreement on Trade in Services (GATS) possesses certain provisions related to measures that limit cross-border data flows, especially when these affect trade in services. Dissecting GATS Commitments: Market Access & National Treatment: GATS obligations vary; specific commitments are accorded only in committed service sectors. Each member outlines its commitments in its Schedule of Specific Commitments. Implications: Commitments can restrict data localization requirements. GATS is technologically neutral, meaning commitments apply regardless of how the service is provided. Restrictions on essential data for service provision could violate GATS commitments. GATS Exceptions: General exceptions in Article XIV: protecting public order and morals; preserving human, animal, or plant life; ensuring compliance with consistent laws, including fraud prevention and privacy. Security exception in Article XIV bis allows actions deemed necessary for protecting essential security interests. GATS Limitations: Focused mainly on services. Sector-specific nature of commitments. Evolving technology and regulation prompt the need for comprehensive rules. Moratorium on Customs Duties on Electronic Transmissions: Established in 1998, this moratorium prevents WTO members from imposing customs duties on electronic transmissions. Extended biennially, with the recent extension lasting until March 31, 2024. Some nations express concerns over potential revenue losses and the inability to protect domestic industries. The Pioneering Impact of Trans-Pacific Partnership (TPP) Introduced significant disciplines like data localization, cross-border data flows, and technology transfer, revising older e-commerce disciplines. After the US's withdrawal in 2017, the agreement transformed into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), with countries like the UK joining in 2023. Key Provisions in Modern Trade Agreements Duties on Electronic Transmissions: Permanent prohibition of customs duties on "electronic transmissions" among the CPTPP Parties. While the CPTPP extends this to all electronic content, others like the USMCA target only "digital products" for commercial sale. Cross-Border Data Flows: The CPTPP ensures businesses can transfer data, including personal information, across borders. USMCA and US-Japan DTA have tighter provisions, preventing "prohibition or restriction" of data flows. Data Localization Measures: CPTPP restricts businesses from being forced to locate computing facilities within a Party's territory. USMCA and US-Japan DTA exclude exceptions for "legitimate public policy objective," but they have broader scopes. Protection Against Forced Source Code Disclosure: The CPTPP safeguards against mandatory transfer or access to software's source code during import or use in a member country. USMCA and US-Japan DTA expand this provision to all software, incorporating algorithm protection. The Anticipated Impact and Challenges: Unclear definitions in security exceptions could be potential roadblocks in maintaining uninterrupted data flows. With the provisions and exceptions being untested in dispute settlements, their practical effectiveness remains a pivotal concern. Indo-Pacific Economic Framework (IPEF) Originated in May 2022 between the United States and other Indo-Pacific nations. It is not a traditional trade agreement; it omits market access coverage for goods or services. Main digital trade objectives encompass: Creating a trusted digital economy environment. Amplifying access to online information and services. Facilitating and ensuring fairness in digital trade. Enhancing the resilience and security of digital platforms. Full agreement aimed to conclude by November 2023. US-Taiwan Initiative Initiated in August 2022, not a comprehensive FTA. Focuses on digital trade, aiming to: Build consumer trust in the digital ecosystem. Enhance digital technology utilization. Combat discriminatory practices in the digital space. Negotiations planned in stages; first phase sealed on June 1, 2023. EU's Stance on Digital Trade Modernized approach with a broader focus beyond e-commerce. EU’s digital trade chapter features in new agreements like those with New Zealand, Chile, and the UK. Emphasis on harmonizing the EU model with the CPTPP approach in the Asia-Pacific. Privacy Meets Trade: EU Data Privacy Law EU’s GDPR mandates stringent data privacy, often causing cross-border data flow challenges. The new EU-US Data Privacy Framework (July 2023) aims to reconcile differing data privacy strategies, ensuring data flow amidst ensuring privacy. Asia-Pacific Momentum on Digital Trade Significant developments include the Digital Economy Partnership Agreement (DEPA) - an evolving digital era agreement. DEPA, signed by Singapore, Chile, New Zealand in 2020, focuses on diverse aspects like AI, digital inclusivity, paperless trade, and more. Incorporation of advanced digital chapters into existing FTAs, e.g., Singapore-Australia FTA and the UK-Singapore FTA. Voice of Other International Bodies The G7: A significant step in 2021 with the establishment of Digital Trade Principles. Key emphasis on ensuring data flow, privacy, IP rights protection, and combating data localization for protectionist intentions. Noteworthy platforms for future endeavors: Asia-Pacific Economic Cooperation (APEC) on digital standards. Global Cross-Border Privacy Rules (CBPR) Forum. OECD Digital Economy Ministerial Meetings. Bilateral dialogues, including partnerships with India, Japan, and the UK. In Conclusion The global digital trade tapestry is intricate and ever-evolving. With each region and major player, from the EU to the US, weaving its unique narrative, it’s pivotal to remain informed and adaptable. This playbook offers a concise yet comprehensive roadmap to navigate this dynamic ecosystem, aiding stakeholders to make informed decisions. Note: The information provided is not legal, tax, investment, or accounting advice and should not be used as such. It is for discussion purposes only. Seek guidance from your own legal counsel and advisors on any matters. The views presented are those of the author and not any other individual or organization. Some parts of the text may be automatically generated. The author of this material makes no guarantees or warranties about the accuracy or completeness of the information.

The UK's Financial Conduct Authority (FCA) has taken a definitive step to safeguard consumers from potentially misleading cryptoasset promotions. Here's a breakdown of the FCA's recent announcement: Date of Announcement: The FCA unveiled its letter on 21 September 2023, marking a significant moment for cryptoasset firms catering to the UK's consumer base. The "Final Warning": Cryptoasset firms targeting UK consumers have been forewarned about the impending cryptoasset financial promotions rules set to come into effect on 8 October 2023. For clarity, "consumer" implies a retail client whose actions aren't linked to their trade, business, or professional pursuits. Key Regulations from 8 October 2023: Only FCA or PRA authorized personnel can approve financial promotions from unregistered cryptoasset firms. Limited exceptions exist under the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (SI 2005/1529). Enforcement Actions: Firms found violating these guidelines will face "robust action" from the FCA. Notably, firms failing to secure approval for their promotions post 8 October 2023 will be contravening section 21 of the Financial Services and Markets Act 2000. This infringement will be treated as a criminal offence and may lead to: A maximum of two years in prison. An unlimited monetary penalty. Or both of the aforementioned penalties. The FCA's Concern: The letter accentuates the FCA's worries about the unresponsiveness of many overseas, unregistered cryptoasset firms that market to UK consumers. Numerous firms have avoided collaborating with the FCA, notwithstanding the authority's persistent attempts. Advice for In-scope Firms: Such firms need to meticulously evaluate the implications of these financial promotion regulations on their operations. The FCA has intimated that it will probably flag firms found promoting illegally to UK consumers on its portal. They will also work to eliminate or suppress unlawful financial advertisements. Additional Developments: On 7 September 2023, the FCA introduced a modification allowing more time for its registered and authorised entities to adhere to certain financial promotion norms necessitating advanced technical progression. The FCA further launched a new online page detailing commendable and less-than-satisfactory practices for firms gearing up for the fresh cryptoasset financial promotions rules. In essence, cryptoasset firms operating in the UK need to be judiciously aware of these impending rules and the severe repercussions of non-compliance. It's not just about staying within the legal framework, but also about building trust with the UK's consumer base. The Letter is available here. The information provided is not legal, tax, investment, or accounting advice and should not be used as such. It is for discussion purposes only. Seek guidance from your own legal counsel and advisors on any matters. The views presented are those of the author and not any other individual or organization. Some parts of the text may be automatically generated. The author of this material makes no guarantees or warranties about the accuracy or completeness of the information.

Artificial Intelligence (AI) is revolutionizing sectors, boosting efficiency, and enhancing the decision-making process. However, as AI systems intensify their dependence on data, the quandary of data ownership emerges as a central concern in framing AI-centric contracts. Types of AI-Related Agreements: Development and Consulting Agreements Partnership and Collaboration Agreements Software Licence Agreements Service Level Agreements Non-Disclosure Agreements End-User Licence Agreements The Heart of the Matter: Data Ownership AI and Data Dependency: AI leans on data for training, testing, operation, and continuous enhancement. The data, often a source of competitive advantage, becomes a contentious point in negotiations. The Ownership Misconception: A frequent stumbling block is an emphasis on "ownership." In jurisdictions like the EU, data, as information, isn't property and can't be "owned" like tangible assets. Though some ownership rights might apply to data encompassed within an IP object (e.g., copyrighted work), individual, especially machine-generated data, often fall outside IP protection. There are instances where data may be shielded as a trade secret, providing safeguards against unsanctioned acquisition, use, or disclosure. Strategic Approach to AI Contract Drafting: Reflective Terminology: Employ terms mirroring applicable law to minimize potential misunderstandings. Focus on Exploitation Rights: Instead of pure ownership, zone in on rights of exploitation and confidentiality clauses. Such a shift aligns better with trade secret protections. Avoid Negotiation Stalemates: Realizing an agreement can become easier when understanding each party's commercial interests and focusing on rights of use, confidentiality durations, and exploitation fields. License Over Exclusivity: Even when one party owns most IP rights, granting a license can be a win-win. By discerning each party's core concerns, you can draft terms catering to both interests. Anticipate Data Evolution: Given the dynamic nature of data and AI, anticipate what data will be collected, used, and generated. As AI systems evolve, data integration grows, amplifying the challenge of rights allocation in agreements. Conclusion: Crafting a clear, transparent AI-related agreement necessitates collaboration from the onset. A proactive approach, combined with legal expertise in IP law, trade secrets, and data regulation, can pave the way for robust, dispute-free contracts. Embrace the AI age, but with a legally clear and strategic vision. Note: The information provided is not legal, tax, investment, or accounting advice and should not be used as such. It is for discussion purposes only. Seek guidance from your own legal counsel and advisors on any matters. The views presented are those of the author and not any other individual or organization. Some parts of the text may be automatically generated. The author of this material makes no guarantees or warranties about the accuracy or completeness of the information.

Artificial Intelligence (AI) has brought about new legal and ethical challenges. The EU’s AI Act, proposed in April 2021, seeks to establish a robust framework for regulating AI, ensuring its ethical usage while promoting trust and transparency. This guideline aims to help businesses grasp the AI Act's main points, focusing particularly on large language models (LLMs) and their potential impact. 1. Overview of the AI Act Purpose of the Act: Establish a regulatory framework for AI systems. Promote ethical usage, safeguarding fundamental rights, and enhancing trust and transparency. Timeline: Finalisation is expected around mid-2024, followed by an 18-month transposition period. Definition of AI: The Act adopts a broad definition, aiming to be as "technology neutral and future proof" as possible. Risk Categories in the Act: Unacceptable risk: AI systems posing serious threats to safety, rights, and livelihoods, e.g., critical infrastructure, law enforcement. High risk: AI systems potentially causing significant harm or infringing upon fundamental rights, e.g., AI-based hiring tools, facial recognition. Limited risk: Systems with potential risks but not as severe as the above two categories. Minimal or No Risk: Systems that do not fit the above categories and have no compliance requirements. 2. Understanding Generative AI and LLMs Generative AI: AI systems capable of generating human-like content, such as images, music, or text. They analyze patterns in vast data to produce content, sometimes surpassing human capabilities. LLMs: A subset of generative AI models focusing on natural language processing. Can generate text, answer questions, and engage in conversations. Examples include OpenAI's GPT-3/4. 3. Implications of the AI Act on LLMs Risk Category: Generative AI, including LLMs, falls under the "Limited Risk" category. Key Provisions: Data Governance: Ensure diverse and high-quality training data to avoid bias. Transparency: Inform users of the AI system's artificial nature. For instance, a letter generated through AI might need a disclosure. Accuracy and Reliability: Regularly monitor and test AI outputs, ensuring clear accountability for misleading or incorrect content. Penalties: Companies face fines of up to €30 million or 6% of global income for non-compliance. Misleading documentation can also result in fines. 4. Key Considerations for Businesses Intellectual Property (IP): The Act doesn't address ownership of outputs from generative AI. Businesses must evaluate IP rights when using AI tools and mitigate risks, e.g., by documenting creative processes and including AI provisions in contracts. Be cautious of breaching third-party IP rights when using AI trained on copyrighted material. Commercial Contracts: Businesses should address AI-related matters, such as the use of AI, AI-generated output ownership, and AI-generated content liability. AI Policies: Implement policies governing AI usage, addressing AI's application areas, protecting IP/personal data, and managing associated risks. Audit and Risk Assessment: Determine the risk associated with AI systems, especially in areas like recruitment that fall under the high-risk category. Data Protection: Comply with data protection frameworks like GDPR, especially concerning automated decision-making. Conclusion The EU's AI Act seeks a delicate balance between safeguarding rights and fostering AI innovation. For businesses, understanding and adhering to this regulatory landscape is crucial. The proactive approach involves risk management strategies and continuous education about AI's evolving capabilities. Note: The information provided is not legal, tax, investment, or accounting advice and should not be used as such. It is for discussion purposes only. Seek guidance from your own legal counsel and advisors on any matters. The views presented are those of the author and not any other individual or organization. Some parts of the text may be automatically generated. The author of this material makes no guarantees or warranties about the accuracy or completeness of the information.

We're seeing some amazing AI-powered tools that are changing how industries work. Think of AI as the brain behind smarter business tasks, better insights, and a closer connection with customers. The EU has introduced rules (the AI Act and AI Liability Directive) to ensure AI plays fairly and safely. Also, big organizations are looking closer at how AI might affect fair competition in the market. Here is a quick overview. 1. Key Elements of AI Systems Information Gathering (Data): It is the backbone of AI's learning ability. Firms with expansive data have a leg up in crafting AI solutions. Regulations aim to keep the playing field open for emerging AI innovations. Gathering data? Make sure to follow competition and privacy rules. Tech Power (Computational Resources): It is the engine that drives AI systems. A limited supply of essential tech pieces like server chips is a challenge. AI creators are on the lookout for new solutions and upgrades. Storing Data (Cloud Computing): There's growing concern about easy access to the cloud. The EU is drafting rules to ensure cloud services are fair and transparent. Talent Hunt (Labor Market): There's a race to find the brightest tech minds. Watch out! Some contracts can restrict where talent can go next. 2. Crafting AI (AI Development Process) Many are using shared resources or "open-source" tools. However, there are worries about the "start open, end closed" approach. Setting industry standards? They need to be competition-friendly. Regulators will keep a close eye on how AI guidelines and best practices evolve. 3. AI and Collusive Conduct Algorithmic pricing tools are not new. Collusion via algorithms can be caught under competition law. AI determining and executing agendas present regulatory challenges. Distinguishing between AI-driven behavior and collusion is crucial. Establishing liability for AI actions is complex. 4. AI and Abusive Conduct Dominant firms may use AI for anti-competitive strategies. AI's use in consumer data collection and personalized pricing is under scrutiny. Non-discriminatory behavior and close oversight are expected of dominant firms using AI. 5. AI and Merger Control Regulators are wary of potential "killer acquisitions." Jurisdictional questions arise for mergers involving nascent technologies. 3. AI and Competition Law Detection and Enforcement AI tools can aid in competition compliance and monitoring. Authorities are recruiting data scientists and software engineers. AI-driven detection and enforcement tools are on the rise. The concept of predicting market failures raises ethical and procedural concerns. Conclusion The intersection of AI and competition law presents both challenges and opportunities. While AI can potentially enhance industries, its misuse can lead to anticompetitive behavior. It is imperative for firms and regulatory authorities to strike a balance between harnessing AI's capabilities and ensuring a fair competitive landscape. The information provided is not legal, tax, investment, or accounting advice and should not be used as such. It is for discussion purposes only. Seek guidance from your own legal counsel and advisors on any matters. The views presented are those of the author and not any other individual or organization. Some parts of the text may be automatically generated. The author of this material makes no guarantees or warranties about the accuracy or completeness of the information.

The Cayman Islands, a leading offshore jurisdiction for financial services, has taken steps towards amending its beneficial ownership regime to better align with international standards. This guideline provides an overview of the changes proposed by the Beneficial Ownership Transparency Bill, 2023 (the "Bill") and how these changes may affect relevant entities. Background Since 2017, the Cayman Islands have implemented a beneficial ownership regime. Entities within scope must: Establish a private beneficial ownership register. Monitor and identify changes to beneficial owners. Regularly update this register. Registers are centrally maintained but are not publicly available. They can be accessed by the Registrar of Companies and select regulatory bodies. The Beneficial Ownership Transparency Bill 2023 is set to overhaul the current regime, with the old obligations standing until the new ones are phased in. Key Changes Proposed in the Bill Expansion of Scope: Includes exempted limited partnerships and limited partnerships. Removes certain exemptions, making more entities subject to the regime. Access to Beneficial Ownership Information: Commitment to a public register by December 2023. However, public access will only be possible after regulations by the Cabinet and a parliamentary resolution. Consolidation of Existing Legislation: Merges provisions from various acts into a single Act of Parliament. Intended to clarify obligations and emphasize transparency. Alignment of "Beneficial Owner" Definition: Aims to match the Cayman Islands Anti-Money Laundering Regulations. Control percentage remains at 25%. Increased Reporting Requirements: More data on beneficial owners, especially on the nature of ownership/control and the individual's nationality. Implications for Entities Entities currently in the beneficial ownership regime should: Anticipate continued reporting requirements. Familiarize themselves with increased reporting demands. Determine if they fall within the expanded regime's scope and understand the obligations. Especially relevant for those previously exempted due to their association with an "approved person." Entities benefiting from the Current BOR due to association with the Securities Investment Business Act or the Virtual Asset (Service Providers) Act: These exemptions are not in the new Bill. Affected entities should establish or maintain a beneficial ownership register. Investment Vehicles and Entities: Those not needing to register under the Private Funds Act or the Mutual Funds Act must establish a beneficial ownership register. Beneficial owners might often be individuals controlling the entity or its top executives. Entities registered under these Acts can benefit from an "Alternative Route," which demands contact details of a licensed fund administrator or equivalent. Current Cayman Islands Beneficial Ownership Regime Entities Under the Regime: Cayman Islands companies. Limited liability companies. Limited liability partnerships. Exclusions: Cayman Islands trusts. Other partnership forms. Foreign registered companies. Corporate Service Providers (CSPs): The Regime imposes certain obligations on these entities, especially those registered in the Cayman Islands. Exemptions In-Scope Entities (or their subsidiaries) might be exempted based on several criteria: Listing on Cayman Islands Stock Exchange or another approved stock exchange. Registration under specific regulatory laws such as the Mutual Funds Act or the Private Funds Act. Management or operation by an "approved person" under specified conditions. Regulation in an equivalent jurisdiction recognized for strong anti-money laundering measures. Specific partnerships related to vehicles, funds, or schemes. Holding interests under specified acts like the Banks and Trust Companies Act. Other exemptions under the Beneficial Ownership (Companies) Regulations. Entities that benefit from an exemption are termed "Exempt Entities", while others are termed "Non-Exempt Entities". Obligations of Exempt Entities Duty to File Written Confirmation: Must provide written confirmation of the exemption they’re using. Should provide specific related information about the exemption. Duty to Keep Confirmation Updated: If any info in the written confirmation becomes outdated or untrue, an updated confirmation must be provided within a month. Obligations of Non-Exempt Entities Establishing a Beneficial Ownership Register: Must establish and maintain a private beneficial ownership register at its registered office. Identification of Registrable Persons: These include "beneficial owners" and "relevant legal entities". There's a three-stage test to identify beneficial owners. Duty to Serve Notice: Must notify registrable persons they've identified or anyone they suspect might be a registrable person. Recording Required Particulars: The regime mandates specific details to be recorded. Duty to Keep Register Updated: Regular updates are needed when changes occur concerning a registrable person. Obligations on Corporate Service Providers (CSPs) CSPs might have direct obligations under the regime, including: Maintaining a Register for a Non-Exempt Entity. Notifying a Non-Exempt Entity of non-compliance. Issuing restriction notices for compliance purposes. Regularly updating the Registrar of Companies with beneficial ownership details. Responding to information requests from the Registrar. Access to Registers Registers are held on a centralized electronic platform managed by the Registrar of Companies. The platform isn't public. Access is limited to specific regulatory bodies like the Financial Reporting Authority and Cayman Islands Monetary Authority. Notes: An “approved person” relates to entities regulated or licensed in the Cayman Islands or an equivalent jurisdiction or those listed on the Cayman Islands Stock Exchange. The Anti-Money Laundering Steering Group's list of equivalent jurisdictions, established in 2018, can be found here. The information provided is not legal, tax, investment, or accounting advice and should not be used as such. It is for discussion purposes only. Seek guidance from your own legal counsel and advisors on any matters. The views presented are those of the author and not any other individual or organization. Some parts of the text may be automatically generated. The author of this material makes no guarantees or warranties about the accuracy or completeness of the information.

This guideline delves into the crucial topic of data scraping, particularly its impact on privacy and data protection regulations. The digital landscape has seen a surge in data scraping activities, and the implications are far-reaching. 1. Comprehending Data Scraping: Data scraping refers to the automated extraction of data from the web. This method can harvest vast amounts of personal data from online platforms, causing privacy concerns even if the data is publicly accessible. 2. Legal Implications: Personal information available online is typically regulated by data protection and privacy laws. Both individuals and companies involved in scraping are accountable for ensuring compliance. Social Media Companies (SMCs) and other web platforms also bear the responsibility to safeguard against third-party scraping. In numerous jurisdictions, large-scale scraping can lead to a reportable data breach. 3. Potential Misuse of Scraped Data: Monetization on third-party platforms. Sale to malicious entities. Intelligence gathering. Diverse threats include targeted cyberattacks, identity fraud, surveillance, and unwanted marketing. 4. Responsibilities of SMCs and Other Websites: Protecting against Unlawful Data Scraping: Implement multi-layered technical and procedural measures. Constant vigilance and adaptation to emerging threats are crucial. Specific Measures Include: Designating dedicated teams for data protection. Implementing "rate limiting." Monitoring user activity for abnormal patterns. Detecting bots through pattern recognition and CAPTCHAs. Taking legal actions when data scraping is identified. Notifying affected individuals and regulators if a data breach occurs. Promoting User Privacy: Provide tools and information to users to make informed decisions. Educate users about the privacy settings available. Transparently inform users about anti-scraping measures in place. Continuously update security protocols to tackle evolving threats. 5. Steps for Individuals to Mitigate Risks: While platforms are responsible, users also play a role in ensuring their data remains secure. Educate Yourself: Review SMC's or website's policies on personal data sharing. Understand potential risks before sharing sensitive details online. Manage Your Data: Limit online data sharing to essential information only. Periodically check and update privacy settings to control data accessibility. Think Ahead: Reflect on the potential long-term implications of the data you share. Even if data is deleted or hidden later, once scraped, it might remain accessible online. If You Suspect a Breach: Contact the concerned SMC or website. Adjust privacy settings and re-evaluate shared data. If unsatisfied with the platform's response, report the incident to the relevant data protection authority. The information provided is not legal, tax, investment, or accounting advice and should not be used as such. It is for discussion purposes only. Seek guidance from your own legal counsel and advisors on any matters. The views presented are those of the author and not any other individual or organization. Some parts of the text may be automatically generated. The author of this material makes no guarantees or warranties about the accuracy or completeness of the information.

The Information Commissioner's Office (ICO) and the Competitions and Markets Authority (CMA) recently issued a joint position paper titled "Harmful Design in Digital Markets," shedding light on issues arising from harmful website architecture (link below). This guideline outlines the salient points and legal implications covered in the position paper. Key Objectives of the ICO and CMA Joint Position Paper The paper primarily focuses on two aims: Empower User Control: Ceasing website designs and practices that undermine people's control over their personal information. Promote Informed Decisions: Making it easier for users to make informed decisions that serve both consumer and competition interests. Legal Framework: Know Your Regulations UK GDPR (Article 5(1)(a), Article 7): Concerns the lawfulness and consent related to data protection. Privacy and Electronic Communications Regulations (PECR) (Regulation 6): Concerns the consent required for tracking cookies and other data storage mechanisms. Categories of Harmful Practices Harmful Nudges and Sludge Definition: Tactics that prompt users to make inadvertent or ill-considered choices, such as misleading cookie consent banners. Legal Violation: Infringes both Article 5(1)(a) of the UK GDPR and Regulation 6 of PECR. Confirmshaming Definition: Using suggestive language or incentives that induce guilt or embarrassment for not sharing personal information. Legal Violation: Infringement of UK GDPR on the grounds of a lack of fairness and consent not freely given. Biased Framing Definition: Presenting choices in a skewed light, thereby not providing users with balanced information. Legal Violation: Breaches Article 5(1)(a) (lawfulness) and Article 7 of the UK GDPR for invalid consents. Bundled Consent Definition: Combining consents for multiple purposes into a single option, thereby restricting user choice. Legal Violation: Violates the 'lawfulness' requirements of Article 5(1)(a) and PECR Regulation 6. Default Settings Defaults in digital environments are potent tools that dramatically influence user behavior. A pre-selected default option is 27% more likely to be chosen than if no default option were available. Potential Risks: Infringing on User's Autonomy: Not allowing a user to change defaults easily could lead to a loss of control over their personal data. Data Privacy: Default settings that share user data more widely than the user realizes can lead to violations of privacy laws. Consumer and Competition Law: Misleading or restrictive default settings could also result in violations of competition laws. Ethical and Behavioral Implications of Default Settings Status Quo Bias: Defaults leverage users' tendency to stick with the current or previous decision. Endowment Effect: Users consider the default as their actual choice, using it as a reference point for future decisions. Implied Endorsement: Defaults might give an impression that it is the recommended or popular option, which could be misleading. Best Practices for Website Owners and Developers Four Key Questions to Inform Design Choices Is the user at the heart of the design choices? Does the design empower user choice and control? Have the design choices been rigorously tested and trialed? Does the design comply with data protection, consumer, and competition law? Give Users Control Easy to Change: Make sure users can easily change the default settings. Clarity: Clearly indicate what each default setting means for the user's privacy and data. Granular Choices: Offer users more granular control over their options rather than bundling them together. Testing & Documentation User-Centric Design: Continuously test how users interact with default settings. Documentation: Keep records to show that you’ve considered ethical and legal obligations in your design choices. Regulatory Implications The ICO will assess the cookie banners of frequently used websites in the UK, taking action where necessary. A failure to respond to these expectations will increase the risk of regulatory actions. Link to the Position Paper. The information provided is not legal, tax, investment, or accounting advice and should not be used as such. It is for discussion purposes only. Seek guidance from your own legal counsel and advisors on any matters. The views presented are those of the author and not any other individual or organization. Some parts of the text may be automatically generated. The author of this material makes no guarantees or warranties about the accuracy or completeness of the information.

Cryptocurrency marketing is challenging, mainly due to the ever-changing landscape of legal regulations. One of the key hurdles is steering clear of suggesting that your project's tokens or digital assets could fall under the category of securities in some jurisdictions. The following guidelines aim to assist you in maintaining proper project communication. Points to Avoid 1. Profit Talk is Off-Limits: Do not hint that your tokens or NFTs can gain in value or share profits. Rationale: Financial gain is often a hallmark of a security, which could trigger regulatory scrutiny. 2. Ownership Stake Warnings: Do not suggest owning your tokens or NFTs implies holding a share in any asset or project. Rationale: Ownership rights are traditionally linked to securities. 3. Price and Listing Discussions: Avoid mentioning current or potential token pricing or exchange listings. Rationale: Talking price can easily be construed as pushing an investment opportunity. 4. Investment Advisories: Stay away from stating that owning tokens or NFTs might be a profitable investment. Rationale: Words like these can categorize your token as a security under applicable laws. 5. Shunning Investment Terminology: Steer clear of using language that encourages seeing your tokens or NFTs as an investment route. Rationale: This may make your asset a candidate for classification as a security. 6. No Team Glamorization: Evade glorifying your team’s capabilities as an incentive for participation in your project. Rationale: This can be seen as an investment enticement based on expected performance. 7. Speculative Announcements: Refrain from making pre-announcements concerning prospective listings on exchanges. Rationale: Market manipulation charges can arise from such behavior. Points to Emphasize 1. Encourage Research: Stress the importance of reading all documentation, like the Whitepaper, and following official news. Rationale: Educated participants are less likely to allege they were deceived. 2. Opt for Tentative Language: Use "may," "might," and other non-committal words when discussing future capabilities or features. Rationale: Specific guarantees could be construed as investment advice or assurance that a project will increase its value resulting from your efforts. 3. Validation Matters: Cross-verify all public statements with your internal team. Rationale: Accurate information minimizes the risk of legal repercussions. 4. Utility Over Profit: Reinforce the idea that the project's aim is to build a community and utility, not a profit-making venture for participants. Rationale: A focus on functionality over financial gains can help avoid securities classification. 5. Just the Facts: Offer straightforward, factual responses regarding a project. Rationale: Remaining factual avoids the risk of being interpreted as providing investment advice and creating future expectations. These guidelines are a general roadmap and should definitely be customized based on your local laws and regulations. While they provide some golden rules that can help you navigate the intricate world of crypto marketing, simply following them to the letter won't guarantee that you're in the clear legally. Remember, it's always a wise idea to consult with legal professionals who are up-to-date with your local and international laws. They can offer you advice that's tailor-made for your unique project. The information provided is not legal, tax, investment, or accounting advice and should not be used as such. It is for discussion purposes only. Seek guidance from your own legal counsel and advisors on any matters. The views presented are those of the author and not any other individual or organization. Some parts of the text may be automatically generated. The author of this material makes no guarantees or warranties about the accuracy or completeness of the information.

Welcome to our guide on British Virgin Islands (BVI) fintech regulations. 1. Legislation Recognising Electronic Means Electronic Transactions Act 2021 Purpose: To legally recognize the filing, creation, or retention of official documents electronically with a government body. Previous Act: It replaces the Electronic Transactions Act 2001, which initially provided legal recognition for electronic signatures. Electronic Transfer of Funds Act 2021 & Electronic Filing Act 2021 Purpose: To support a digital environment and e-government services in the BVI. AML/CFT Compliance Year: In 2018, the BVI permitted the use of appropriate digital and electronic means for identification and verification in compliance with Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) regulations. 2. Expansion of Money Services Business Financing and Money Services Act 2009 (Amended in 2019) Definition: The definition of "money services business" now includes electronic money, mobile money, and alternative methods of money and payment transmission. New License: The introduction of a new license class (Class F) allows international financing and lending in the P2P fintech market, including P2B and B2B markets. Note: This amendment has yet to be in force. 3. Data Protection Obligations Data Protection Act 2021 Data Controller: A person or entity that has control over or authorizes the processing of personal data. Conditions: Processing is allowed only if it satisfies one of the conditions specified in the Data Protection Act (DPA). Rights: The data subject has certain rights, including access rights. Sensitive Data: Stricter rules apply to sensitive personal data. 4. The Virtual Asset Service Providers Act (VASP Act) Effective Date: Came into force on 1 February 2023. FATF Recommendations: The Act is in accordance with the Financial Action Task Force (FATF) recommendations. Additional Guides: Accompanied by the VASP AML Guide and FSC Guidance on Application for Registration of a VASP. 5. Predominant Business Models in BVI's Fintech Space In BVI, there are primarily four types of Fintech-related business models: Digital Asset Funds: These are funds investing in digital assets or blockchain-based businesses. Token Issuers: Firms that offer and promote various types of crypto-coins or aim to raise capital for blockchain ventures. Digital Asset Exchanges: These can be centralized or decentralized (DEX) platforms for trading digital assets. NFT Platforms: These are platforms specifically designed for dealing in Non-Fungible Tokens (NFTs). 6. Regulatory Authorities The Financial Services Commission (FSC) is the competent authority overseeing financial services activities in BVI. Entities must be licensed or registered with the FSC to conduct regulated activities. 7. Key Legislation Principal Financial Services Legislation The principal legislation governing financial services in the BVI includes: Securities and Investment Business Act (2020 Revision) - SIBA Banks and Trust Companies Act (2020 Revision) - BTCA Financing and Money Services Act (2020 Revision) - FMSA VASP Act Anti-Money Laundering and Countering Financing of Terrorism Legislation BVI has adopted AML/CFT and CPF legislation based on the Financial Action Task Force (FATF) recommendations, effective 1 December 2022. 8. Definitions Virtual Assets Defined as a digital representation of value that can be digitally traded or transferred and can be used for payment or investment purposes. Virtual Asset Service (VASP) The business of engaging, on behalf of another person, in any VASP activity or operation (as outlined in the definition of VASP), including but not limited to: Hosting wallets Providing financial services for issuing virtual assets Virtual asset kiosks Transfer of virtual assets Virtual Assets Exchange Generally expained as a trading platform that is operated for the purpose of allowing an offer or invitation to be made in order to buy or sell any virtual asset in exchange for money or any virtual asset and which comes into custody, control, power or possession of – or over – any money or any virtual asset at any point in time during its course of business. 9. Regulatory Sandbox Introduced in 2020, the regulatory sandbox allows fintech companies to test their business models under a focused and tailored supervisory framework. Eligibility Criteria Must be an institutional applicant. Should intend to offer an "innovative fintech" business model. Benefits and Requirements Exemption from specific regulatory legislation. AML/CFT/CPF rules will still apply. 10. Additional Compliance Requirements Firms must also comply with beneficial ownership disclosure, tax information exchange, and economic substance requirements. 11. Regulating Authorities in the BVI Financial Services Commission (FSC) Jurisdiction and Functions: Regulation, supervision, and monitoring of regulated entities Enforcement of financial laws Issuance of guidance and advisories Facilitation of regulator-to-regulator assistance FSC's Objectives: Protect the public from financial loss Enhance BVI's reputation as a financial services jurisdiction Reduce crime related to financial services International Tax Authority (ITA) Responsibilities: Negotiating tax information exchange agreements Supervising legal entities subject to BVI's beneficial ownership and economic substance regimes Financial Investigation Agency (FIA) Functions: Investigating financial offences like money laundering Receiving and analyzing information related to proceeds of crime Information Commissioner under DPA Powers: Investigating data protection-related complaints Issuing notices and carrying out assessments Note: As of the last update, the Information Commissioner has not yet been established. 12. Enforcement Measures VASP Act Provisions: Ability to inspect regulated entities Power to remove directors and make public statements AML/CFT/CPF Regime: FSC and FIA can exercise powers under the AML/CFT/CPF framework related to virtual assets and VASPs. 13. Implications of Additional Regulations AML Regulations Effective from 1 December 2022, specific updates mandate compliance for transactions involving virtual assets valued at USD 1,000 or more. New AML Regulations: Require robust customer due diligence procedures and proper recordkeeping measures. Cybersecurity Computer Misuse and Cybercrime Act 2014 outlines prohibitions against unauthorized computer data access and modification. 14. Non-Regulatory Parties Entities like accountants and auditors must also comply with BVI law relevant to their businesses. 15. Online Lenders Differences in Regulation BTCA vs. FMSA: If a BVI entity provides loans and accepts deposits, it falls under the Banks and Trust Companies Act (BTCA). If it only provides loans and the borrowers are BVI-based, the Financial Management and Services Act (FMSA) applies. Economic Substance: Regardless of regulatory status, entities in financing and leasing must comply with BVI's economic substance requirements unless they can prove their income is taxed elsewhere. Underwriting Regulatory Gap: BVI doesn't regulate underwriting activities. Such activities, generally conducted onshore, must comply with the laws of that particular jurisdiction. Sources of Funds Retail Lending: Mostly conducted by branches of major banks licensed under the BTCA. P2P Fintech Market: A Class F license was introduced in 2019, although applications are pending due to the need for detailed regulations. Syndication of Loans Compliance Requirement: If a BVI entity is involved in loan syndication, it must adhere to the laws of the onshore jurisdiction where syndication is arranged. 16. Fund Administrators Licensing: Must hold a license in accordance with SIBA. Due Diligence: Administrators are required to satisfy various criteria regarding mutual funds before providing administration services. AML/CFT/CPF Requirements: Administrators must provide necessary documents and report suspicions of money laundering, terrorist financing, or proliferation financing to the fund's Money Laundering Reporting Officer. Data Protection: Provisions often require administrators to safeguard personal data according to certain standards. 17. Permissible Trading Platforms SIBA vs VASP Act SIBA: Under the Securities and Investment Business Act (SIBA), any person providing a facility for trading or listing "investments" must be licensed under SIBA. VASP Act: Those operating virtual asset exchanges are required to be registered as a Virtual Asset Service Provider (VASP) under the Virtual Asset and Service Providers Act (VASP Act). Defining Investments and Virtual Assets The Financial Services Commission (FSC) has clarified that utility tokens are not "investments" under SIBA. Stablecoins or altcoins might qualify as "investments," depending on their structure. Important: Businesses need to identify whether they deal in "investments" under SIBA or "virtual assets" under VASP Act to determine the applicable regulatory regime. 18. Virtual Asset Service Providers (VASP) The FSC mandates that VASPs must provide extensive information on: Safekeeping facilities and potential risks. Security measures. Client asset segregation measures. Higher level of paid-up capitalization is required for VASPs operating exchanges or providing custody services due to the higher level of risk involved. VASPs cannot engage in deceptive trading or marketing activities. Provision of fiat currency exchange services for users requires written FSC approval. 19. Market Makers and SIBA Principal Capacity: Entities functioning in a principal capacity and performing a market-maker role must be licensed or registered under the Securities and Investment Business Act (SIBA). Virtual Assets: If such market-making involves virtual assets for a third party like an exchange, the entity is likely to be governed by the Virtual Asset Service Providers Act (VASP Act) and must register with the Financial Services Commission (FSC). 20. Funds Open-End Funds: Must be licensed by the FSC. Closed-End Funds: Must be approved by the FSC. 21. Investment Managers and Dealers Licensing Requirement: Must be licensed by the FSC if dealing with what qualifies as an "investment" under SIBA. Virtual Assets: If dealing in virtual assets, dealers must likely register as a VASP with the FSC. 22. Blockchain Regulations Classification: Blockchain assets likely fall under the "virtual assets" definition under the VASP Act. NFTs: NFTs are generally not considered "virtual assets" unless used for payment or investment. * * * Navigating the regulatory landscape of financial technologies can be intricate and requires a precise understanding of local laws and global compliance norms. It's crucial to get these aspects right to ensure your venture's seamless operation and success. If you need expert advice or guidance in understanding the legal frameworks detailed above, don't hesitate to reach out for professional assistance. We have global partnerships that make us adept at handling global regulatory compliance. The information provided is not legal, tax, investment, or accounting advice and should not be used as such. It is for discussion purposes only. Seek guidance from your own legal counsel and advisors on any matters. The views presented are those of the author and not any other individual or organization. Some parts of the text may be automatically generated. The author of this material makes no guarantees or warranties about the accuracy or completeness of the information.

The upcoming Payment Services Directive 3 (PSD3) is expected to transform how payment service providers (PSPs) and electronic money institutions (EMIs) operate within the EU. This guideline will help you to navigate potential future developments. 1. Why the Transition from PSD2 to PSD3? The move toward PSD3 is underpinned by several challenges and limitations identified in the current Payment Services Directive (PSD2) and the Electronic Money Directive (EMD2). The aim is to merge these separate regimes for payment services and electronic money into a unified framework. Regulatory Arbitrage: Unfair Competition What’s the Issue?: The European Commission has noticed that some PSPs strategically select their home countries to be those Member States where the application of Union rules on payment services is more lenient or favorable. Impact: In the Commission's opinion, such practice creates an uneven playing field and distorts competition among Member States, especially those that employ stricter rules or more active enforcement policies. PSD3’s Approach: The new directive aims to mitigate such practices, ensuring that competition is more evenly balanced across Member States. Delineation Difficulties: EMI vs. PI What’s the Issue?: National financial supervisory authorities have found it challenging to distinguish between services offered by Electronic Money Institutions (EMIs) and Payment Institutions (PIs). Impact: This ambiguity complicates the regulatory landscape and can result in overlaps or gaps in supervisory practices. PSD3’s Approach: Under PSD3, EMIs will cease to exist. Instead, there will be only Payment Institutions (PIs) that will be authorized to offer both electronic money and payment services, thus simplifying the regulatory scope. Lengthy Licencing Processes What’s the Issue?: An EBA Peer Review conducted in January 2023 concluded that the authorization process for PSPs is excessively time-consuming. Impact: Such delays hinder market entry and can negatively affect competition. PSD3’s Approach: The directive mandates the European Banking Authority (EBA) to develop draft regulatory technical standards for authorizations, as well as a common assessment methodology, to speed up and standardize the process. Banking Challenges for PSPs What’s the Issue?: PSPs frequently experience difficulties in opening bank accounts, often due to vague concerns related to Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) controls. Impact: This has significant implications for the operation and financial viability of PSPs. PSD3’s Approach: The directive requires banks to offer detailed explanations for any denial of access to a bank account or withdrawal of such a service. PSPs will also have the right to appeal such decisions to national authorities. Consumer Protection Against Fraud What’s the Issue?: With an upswing in consumer interest in electronic payments, there’s a concurrent increase in the risk of fraud. Impact: Consumers could be significantly affected, eroding trust in electronic payment systems. PSD3’s Approach: The European Commission, under the PSD3 framework, will enable PSPs to share fraud-related information, thus enhancing collective security measures. 2. What Other Changes Does PSD3 Bring? Safeguarding Funds: Evolving the Safety Net New Mandate: One of the critical areas of reform in PSD3 focuses on safeguarding customer funds, which will require Payment Institutions to avoid concentration risk. Operational Implications: In practice, PSPs should not use the same method to safeguard their customer funds. This will necessitate exploring multiple safeguarding avenues, potentially requiring PSPs to restructure their current safety measures. Engagement with Credit Institutions: Moreover, PSPs must spread the risk by not keeping all customer funds with one credit institution. This diversification aims to protect consumers by reducing the systemic risk tied to the failure of a single credit institution. Winding-up Plans: Preparedness and Continuity Regulatory Requirement: PSPs must have a winding-up plan in place as a condition for authorization under PSD3. Key Components: These plans should cover what steps would be taken in the event of the firm’s failure, how an orderly wind-up of activities would occur, and what arrangements are in place for the continuity or recovery of critical functions that are outsourced or performed by agents and distributors. Initial Capital Requirements: Raising the Bar Increased Financial Commitment: PSD3 calls for an increase in the initial capital that a Payment Institution must have, raising it to a minimum of €150,000. Scope: This requirement is particularly relevant for Payment Institutions intending to offer a range of services like maintaining accounts, executing transactions from payment accounts, issuing payment instruments, and acquiring. Account Information Service Providers: Financial Resilience Alternative to Indemnity Insurance: PSD3 allows registered Account Information Service Providers to hold their own funds of €50,000 as an alternative to currently required professional indemnity insurance. Flexibility: This offers greater flexibility to providers in how they choose to safeguard against operational and financial risks. 3. When Will PSD3 Come into Force? The Timeline for PSD3 Implementation Official Commencement: According to the disclosed draft dated June 28th, 2023, it is expected that the final version of the PSD3 directive will officially come into force in 2026. Preparatory Steps for Stakeholders Three-Year Window: Stakeholders have a roughly three-year window from the date of the draft's disclosure to prepare for the full implementation of PSD3. This period is crucial for Payment Service Providers (PSPs), Electronic Money Institutions (soon to be obsolete under PSD3), and other financial entities to align their operations with the new regulations. Revisit Existing Compliance Frameworks: Given the expansive changes that PSD3 will bring, financial institutions must review their existing compliance frameworks and possibly revamp them to align with the new directives. Resource Allocation for Compliance: Organizations should consider earmarking funds and human resources for managing the transition from PSD2 (or EMD2, where applicable) to PSD3. This could include legal consultations, technical upgrades, and training sessions for staff. Regulatory Monitoring Interim Updates: While the official implementation is slated for 2026, organizations should closely monitor any interim updates or modifications to the directive that may be introduced by the European Commission or the European Banking Authority (EBA) before the full implementation date. National Authority Guidelines: As PSD3 aims to harmonize practices across Member States, there may be supplementary guidelines issued by national authorities to assist local institutions in compliance. Staying abreast of these guidelines will be essential for seamless transition and compliance. The information provided is not legal, tax, investment, or accounting advice and should not be used as such. It is for discussion purposes only. Seek guidance from your own legal counsel and advisors on any matters. The views presented are those of the author and not any other individual or organization. Some parts of the text may be automatically generated. The author of this material makes no guarantees or warranties about the accuracy or completeness of the information.

Welcome to our high-level guideline focusing on horizontal agreements in EU digital markets. This guide will be instrumental for professionals and businesses venturing into or already active within the European digital landscape. 1. Basic Framework Standard EU Competition Rules: The assessment of anticompetitive agreements between competitors in digital markets follows standard EU competition rules. There are no distinct rules or exemptions specific to digital agreements. 2. Revised Regulations (Effective from 1 June 2023) Key Developments: R&D Block Exemption Regulation Specialisation Block Exemption Regulation Guidelines on Horizontal Co-operation Significant Additions: The revisions include guidance on: Data pooling Data sharing 3. Access to Online Platforms Commission's Stance: No enforcement actions have been taken addressing horizontal online platform access restrictions. Highlight: A noteworthy case involved Google and Meta (‘Jedi Blue’). Initial concerns suspected preferential treatment for Meta in auctions on Google's ad platform. Following investigations, the Commission did not find any infringements and closed its proceedings. Platform to Business Regulation: It imposes obligations on online intermediation services. Notably, a platform must clarify any restrictions on businesses' ability to offer goods/services outside the platform. Digital Markets Act (DMA): Contains specific provisions regarding access to a gatekeeper platform. 4. Algorithms and Competition Law Commission's Position on Algorithms: No enforcement actions have specifically addressed algorithmic pricing in a horizontal context. Algorithms can play roles in various horizontal settings: Monitoring prices agreed between competitors. Implementing a price settled through separate collusion. Acting as communication channels for explicit collusion. Engaging in tacit collusion without human intervention. Revised Horizontal Guidelines: Two Principal Tenets: Illegal offline pricing practices are likely illegal online. Firms can't escape liability for illegal pricing by blaming algorithms. 5. Data Collection and Sharing Commission's Position on ‘Hub and Spoke’ Exchanges: No specific enforcement actions were taken concerning 'hub and spoke' exchanges in digital markets. The revised Horizontal Guidelines recognize potential scenarios of an online platform acting as a hub and facilitating anti-competitive practices. Information exchanges using publicly available data are legal, but aggregating sensitive information into a shared pricing tool can lead to horizontal collusion. 6. Emerging Issues Algorithmic Transparency & Monitoring: Algorithms can augment market transparency, making it simpler to monitor anti-competitive agreements. This can amplify the impacts across markets. Case Highlight: The Commission found suppliers using algorithms for monitoring resale price maintenance can exacerbate its effects (notably in cases against Asus, Denon & Marantz, Philips, and Pioneer). In conclusion, it's pivotal for businesses operating in the European digital realm to be cognizant of these guidelines and the evolving landscape of competition law. Always remain updated compliant, and consult with legal experts to navigate potential pitfalls. The information provided is not legal, tax, investment, or accounting advice and should not be used as such. It is for discussion purposes only. Seek guidance from your own legal counsel and advisors on any matters. The views presented are those of the author and not any other individual or organization. Some parts of the text may be automatically generated. The author of this material makes no guarantees or warranties about the accuracy or completeness of the information.