Digital Bytes – May 2021

Some noteworthy recent highlights of proposed UK regulation impacting the Telecoms/TMT sector:

• Internet safety – We have all come to realise the benefits of a free, open and secure internet during the pandemic, but internet safety needs to be improved whilst still respecting users’ rights to freedom of expression. The Online Safety Bill is set to enshrine this, by providing a new regulatory framework for internet safety for all, particularly children. Ofcom will oversee this, as the new online safety regulator, with enforcement powers to fine up to £18million or 10% of annual global turnover. Companies who host user-generated content or facilitate interaction between users, one or more of whom is based in the UK, as well as search engines, will be responsible for their users’ safety online and will need to tackle illegal content on their services to protect users/children from harmful content and activity online. These platforms will need to set out clearly what legal content is unacceptable and enforce this consistently and transparently and have effective and accessible user reporting and takedown procedures in relation to harmful content.

• Protection of smart products and digital communications networks – With 5G use cases gaining speed and increasing consumer reliance on smart products (particularly in the home security and home entertainment markets), the government is proposing the Product Security and Telecommunications Infrastructure Bill to ensure that consumer connected products meet minimum cybersecurity standards. Proposed reforms to the existing Electronic Communications Code should promote more collaborative negotiations for the use of public and private land for faster deployment of digital communications networks.

  Additionally, there will be a new security framework for the UK’s telecoms network, proposed in the separate Telecommunications (Security) Bill. This is the government’s response to the enhanced national security and cyberattack threat to the UK (illustrated by, for example, the removal of Huawei, a “high risk” 5G vendor, and increasing hostile cyber activity from foreign states), which requires greater security standards to be met by public networks, with Ofcom being empowered to impose fines of up to up to 10% of turnover or £100,000 a day for non-compliance. Post Brexit, this Bill also serves to give effect to certain security provisions in the European Electronic Communications Code Directive (EECC) not already transposed into UK.

• Social Influencer marketing curbs – The Advertising Standard Authority is cracking down on influencer advertising. Any commercial relationship, whether commission payments or payments in kind (e.g., free goods or services, such as free subscriptions) between an influencer and a brand needs to be made clear to ensure that consumers are not misled by social media posts relating to or promoting the particular brand. Both the influencer and the brand are responsible for ensuring that all relevant posts are clearly labelled as advertisements (e.g., #advertisement). Compliance with this could be covered in any affiliate agreement between the brand and influencer.