Dear Readers,
In this August edition of the TechREG® Chronicle, we host a selection of articles from our esteemed Editorial Advisory Board. This set of contributions opens with a TechREG® Talks discussion between Philip Marsden & Jacqueline Downes, moderated by Katharine Kemp. The panelists discuss the pressing issues facing legislators, regulators and litigants throughout the world as the regulation of online platforms appears on the policy radar to an ever-greater extent, particularly insofar as it relates to the protection of consumer rights, online privacy and expanding antitrust legislation.
Martin Cave discusses the trend of “softwarization” in certain industries. Advances in data and digitalization create substantial opportunities for cost savings and enhanced competition in many network industries subject to regulation. Softwarization refers to innovations which reduce the need for hardware assets; these can be not only code, but the use of any smart asset, algorithm or economic tool across the whole value chain. Two sectors are considered. In mobile communications, the scope for digitisation and the starting level of competition are high; in electricity, both are substantially lower.
Katharine Kemp follows, with a timely piece on the theme of anonymization and data privacy. Representations in online privacy policies that certain data is anonymous or “not information that personally identifies you” can have significant consequences. They may indicate that a firm considers the data to be outside the scope of data protection regulation, and/or give consumers the impression that this is data which cannot have an individual impact; for example, that it will not add to the individual consumer’s profile. However, there are a growing range of data practices and services offered by adtech and data analytics providers that do affect individuals’ privacy while claiming not to use personal information. The article argues that such claims require tighter regulation.
Turning to crypto, David S. Evans tackles the question of how to regulate so-called stablecoins. Such decisions should be based on crypto’s past and present and discount overly optimistic forecasts of its future. The past demonstrates public blockchains cryptocurrencies are highly volatile; main blockchains have no mechanisms for ensuring stability; and that after 13 years there are unfulfilled promises and no widespread use of cryptocurrencies for productive purposes. The present shows that speculation is the main use case for currencies with the leading exchanges investing in feeding hype with celebrity-studded ads among other things. There is hard evidence that lax regulations of stablecoins, combined with the inherent volatility of the native cryptocurrencies result in the classic systemic financial risks from runs and contagion.
Liyang Hou & Shuai Han turn to the question of platform regulation. The fast expansion of the digital sector has raised regulatory attention across the world. In order to maintain competition, major economies have proposed legislative drafts to regulate digital platforms. This article offers a comparative view on those drafts in China, European Union, and the United States, and submits suggestions for future revision for the Chinese drafts. Mihir Kshirsagar looks to how consumer protection regulators across a variety of jurisdictions are taking on the challenge of combating so-called “dark patterns” online, through targeted enforcement actions and new rulemaking initiatives. Broadly speaking, “dark patterns” are user interface techniques that benefit an online service by leading users into making decisions they might not otherwise make. Some are outright deceptive, while others exploit cognitive biases or shortcuts to manipulate user actions. But businesses complain that authorities’ newly found attention to the issue of dark patterns risks targeting legitimate persuasion techniques that have been long used in the marketplace.
As always, many thanks to our great panel of authors.
Sincerely,
CPI Team
