Clifford Chance

Nigeria publishes roadmap for adoption of Blockchain Technology

The Nigerian government has published a draft National Blockchain Adoption Strategy that outlines how the adoption of Blockchain technology could generate $10 billion for Nigeria over the next decade. The proposed strategy intends to resolve business and governance process inefficiencies by promoting digital literacy in both the public and private sector and incentivising SMEs and start-ups to adopt Blockchain technologies, amongst other things. The key focuses of the draft are regulation, skills and capacity building, innovation, investment, and international competitiveness and collaboration.

As per our October update, the Nigerian Securities and Exchange Commission has recently announced plans to regulate cryptocurrencies, which tend to make use of Blockchain technology, for the first time. This regulation is likely to be crucial if the country is to succeed in adopting its proposed Blockchain strategy.

Zimbabwe's five-year economic blueprint highlights the digital economy as a priority

The government of Zimbabwe has launched its National Development Strategy which outlines the steps, priorities, policies and institutional reforms that must be achieved and implemented between 2021 and 2025 for the country to realise the stated aims of its Vision 2030.

The Strategy lists the digital economy and information and communication technologies (ICTs) as areas of high priority and proposes a number of recommendations including: (i) the expansion of fibre optic backbone and mile connectivity (with a target internet penetration rate of 75.42% by 2025); (ii) the establishment of a National Data Centre; (iii) the development of an e-Government Enterprise Architecture and Interoperability Framework; and (iv) enforcement of ICT sector policies and regulations to improve ICT governance. This will include the promulgation of the Cyber Security Act and the development of a policy on adoption and adaptation of emerging technologies including Big Data Analytics, Artificial Intelligence and Virtual Augmented Reality.

California Establishes First US Data Protection Regulator

While the rest of the world was watching the US presidential elections, privacy practitioners had their eye on another contest: California's Proposition 24 ballot initiative—better known as the California Privacy Rights Act (CPRA).

This vote ended up being far less contested, with the Associated Press reporting that over 56% of Californians had voted in favour of the bill.  The law will bring significant amendments to California's existing privacy law—the California Consumer Privacy Act (CCPA)—strengthening many of the law's privacy protections and establishing new privacy rights.  Perhaps most notably, the initiative also establishes the California Privacy Protection Agency (CPPA), the nation's first regulator focused solely on data privacy.

DOJ challenges Visa's acquisition of Plaid – a statement on fintech, monopolisation, and nascent competition

On 5 November 2020, the Antitrust Division of the Department of Justice (DOJ) filed a complaint to block Visa's proposed acquisition of Plaid. At a time of increased antitrust scrutiny for tech companies, this lawsuit illustrates the DOJ's interest in financial technology—fintech, protection of nascent competition and maintenance of monopoly claims, and stresses the importance of innovation.

The lawsuit comes as DOJ officials indicated that they are "leaning in" to scrutiny of financial and tech markets, including their combination in the form of fintech. Recognising that the lines between different financial technology and banking services have blurred, this year the DOJ unveiled its plan to reorganise its civil sections and create a new Financial Services, Fintech, and Banking section, which is now responsible for overseeing the Visa / Plaid investigation.

For more information, see Clifford Chance's Talking Tech article on this subject: DOJ Challenges Visa's Acquisition of Plaid – a Statement on Fintech, Monopolization, and Nascent Competition.

OMB issues guidance to federal agencies on AI policy

The Director of the Office of Management and Budget (OMB) issued a memorandum providing guidance to the heads of federal agencies and executive branch departments  to inform the development of policy approaches regarding technologies and industrial sectors that are empowered or enabled by artificial intelligence (AI). The memorandum encourages federal agencies to consider ways to foster innovation and growth and engender public trust in AI, while reducing unnecessary barriers to the development and deployment of AI, and protecting core American values. The memorandum focuses on "narrow" (or "weak") AI, which goes beyond advanced conventional computing to learn and perform domain-specific or specialized tasks by extracting information from data sets, or other structured or unstructured sources of information.

China consults on central bank digital currency

On 23 October 2020, the People’s Bank of China (PBOC) started to consult the public for proposed amendments to the PRC PBOC Law. The PRC PBOC Law is the constitutional statute for China's central bank, PBOC. Among others, the proposed amendments demonstrate the PRC government’s determination to impel the digitalisation of Renminbi by providing legal basis for PBOC to issue China's central bank digital currency – the so-called "Digital Currency / Electronic Payment (DC/EP)" which is now being tested. Furthermore, the proposed amendments also echo the PRC government’s enforcement activities to crack down on unauthorised virtual currency in recent years and specifically prohibits the issuance and sale of digital currency tokens.

APEC Business Advisory Council publishes report on AI

The Asia-Pacific Economic Cooperation (APEC) Business Advisory Council (ABAC) has published a report on AI in APEC. It provides an overview of the state of AI in APEC economies and the enabling initiatives that will further drive adoption. The Report puts forward six key recommendations:

• include AI as a part of the broader APEC economic agenda, not simply as a technology issue;
• build trust in AI;
• introduce supportive policy frameworks for AI;
• improve regulatory coherence and international cooperation; (v) prepare jobs and skills for the transformations of AI; and
• create opportunity from the COVID-19 economic recovery.

The report also addresses ethical issues arising out of AI. The report calls on APEC leaders to encourage regulators, industry and other stakeholders to make fairness, transparency, accountability, explainability and ethics part of the design and implementation process of AI products and services. It also calls for its member to support and drive the emergence of sector-specific, industry-led efforts to develop ethical principles, guidelines and frameworks for AI and update outdated or inadequate regulations that may hinder the public's understanding of, and confidence in, AI.

The UK government has announced plans to establish a code of conduct for firms with strategic market status, overseen by the DMU

On 27 November 2020, the UK government announced its plans to introduce new rules for online platforms. The government announcement is set out in its written response to the findings of a report by the UK competition regulator, the CMA, from July this year, which called on the government to "to introduce a new regulatory regime for platforms comprising both the code and the pro-competitive interventions."

The UK government largely adopts the recommendations of the CMA's report. According to the response, the UK government will:

• establish an enforceable code of conduct to govern the behaviour of platforms funded by digital advertising that are designated as having 'strategic market status'; and
• establish a Digital Markets Unit (DMU) to undertake 'strategic market status' designation, introduce and maintain the code and produce detailed supporting guidance.

The report does not articulate in detail what powers the DMU will have at this stage, though makes clear that measures should be "mandatory and enforceable". The government also agrees in principle to give pro-competition powers to the DMU, though concludes that "more work is required" to determine the exact shape and scope of these powers.

The next step will be consultations on the form and function of the DMU, scheduled to take place in early 2021.

For more information, please see Clifford Chance's briefing on this subject, The UK's new competition regime for digital platforms with strategic market status.

Landmark proposals for new Digital Services Act and Digital Markets Act expected imminently

The European Commission has announced that two proposals for legislation will be published on 9 December, one week later than the originally planned publication date.

The proposal for a Digital Services Act will aim to define new and enhanced responsibilities and reinforce the accountability of online intermediaries and platforms. The Commission's objective is that consumers are as protected illegal products, content and activities on online platforms as they are offline.

The proposal for a Digital Markets Act will combine the ex ante regulation of digital platforms considered to be "gatekeepers", by reference to specific criteria; with a dynamic market investigation framework to examine digital markets prone to market failures.

Once published by the European Commission, the proposals will be sent to the European Parliament and Member States for adoption.

New Data Governance Act aims to improve and facilitate data sharing in the EU

The European Commission published a proposal for a Regulation on European data governance on 25 November 2020. The proposal is the first of a set of measures announced in the 2020 European strategy for data. The aim is to increase trust in data intermediaries and strengthen data sharing mechanisms so as to increase the availability of data and facilitate data sharing across sectors and Member States. The Act will need to be considered and adopted by the European Parliament and Member States before it can enter into force.

The Commission is consulting on new standard contractual clauses for data transfers

The European Commission has launched a consultation on standard contractual clauses between controllers and processors located in the EU. The deadline for submission is 10 December 2020. Following the European court ruling invalidating the Privacy Shield, European Commissioner for Justice, Didier Reynders, said that Standard Contractual Clauses remain a valid tool for international data transfers and can continue to be used. He added that one of the Commission's priorities was to guarantee the protection of personal data transferred outside the EU in full compliance with the Court’s ruling and the Commission had therefore intensified work on the modernisation of the Standard Contractual Clauses which are the most used transfer mechanism for European companies.

Focus on FinTech in UAE // UAE Central Bank introduces new crypto assets regulations with Clifford Chance's support and updates payment services regulations

Clifford Chance supported the UAE Securities and Commodities Authority in preparing a wide ranging crypto assets regulation recently issued, covering both (i) the new regulation of certain non-security crypto assets treated as investments and (ii) enhancements to the securities law regime in respect of security tokens.  The regulations cover issuance requirements and disclosure standards, conduct rules, requirements for custodians, fundraisers and exchanges along with provisions on interactions with and enhancements to existing financial services rules to apply to crypto assets business and technology/financial crime control standards.

UAE also introduced new payment services regulations.

In November, the Central Bank of the UAE hosted the Government FinTech Forum to foster cross-border collaboration. UAE hosted officials from a number countries in the region and from further afield, including from Hong Kong, Saudi Arabia, Singapore and Israel.

In the lead-up to the forum the Abu Dhabi Global Market Financial Services Regulatory Authority and the Israel Securities Authority entered into a FinTech cooperation agreement, see press release. It provides a framework for information sharing, and for facilitating the movement of start-ups, knowledge, and talent between the two jurisdictions.