2016 may have shown us the danger in making predictions but we look ahead at what to expect in terms of legislative developments in technology and communications in 2017.
Pretty well everything is going to be seen through the prism of Brexit in 2017, particularly in relation to EU level legislation and case law. While Article 50 is likely to be triggered in 2017 (whatever the outcome of the Supreme Court decision), we will still be in the EU by the end of the year. We can only hope that there will be greater clarity around the UK's position by this time next year about what sort of Brexit we will have and whether it will align with the government's recently issued wish list.
One of the few concrete announcements that has been made is around 'The Great Repeal Bill' which is intended to repeal the European Communities Act 1972 and implement all EU legislation into UK law. This is going to be very far from a 'quick fix'. The House of Commons Library estimates that 13% of legislation enacted between 1993 and 2004 is EU-related. It suggests the review which will be required to decide which legislation to keep, which to repeal and which to amend, will constitute one of the largest legislative projects ever undertaken in the UK. The Great Repeal Bill is to be announced in the next Queen's speech and is likely to pass into law during 2017, but only leaving the EU will trigger its provisions.
As we progress towards Brexit, there will be uncertainty over what is to happen as EU law develops. EU laws will be passed between now and Brexit. Will those be implemented by the UK? Regulations (which are directly applicable and do not have to be implemented into local law) which come into force before we leave should, in theory come into effect and be within the scope of the Great Repeal Bill but does this also hold for a Regulation which is passed before we leave but which doesn't apply until after we leave?
The situation with Directives is still more complicated. Directives usually come into effect with a date by which Member States must pass implementing legislation. Typically, this period is eighteen months to two years depending on the complexity of the legislation although it can be as little as six months. So what happens when the EU passes a Directive during the exit negotiation period? Do we draft legislation to implement it or not? It is possible that the Great Repeal Bill will answer some of these questions when it is published but equally likely that it will not deal with the full complexities.
Data protection and cybersecurity
Last year was a big year for new legislation with both the General Data Protection Regulation (GDPR) and the Network Information Security Directive (NISD) finally getting onto the statute books. While both these pieces of legislation will come into effect in 2018 (the GDPR directly and NISD through implementing legislation), we will be getting guidance and more information as the year progresses and we move towards implementation. The government has confirmed that both these pieces of legislation will be implemented notwithstanding Brexit.
Also ripe for reform is the ePrivacy Directive which the European Commission is currently in the process of amending with a draft Regulation just published. This has implications for rules on cookies and for providers of 'Over the Top' services which are likely to come into scope for the first time. See below for more on this.
Progress was made on data exports during 2016 with the new EU-US Privacy Shield coming in as a replacement for Safe Harbor. However, data exports will remain under scrutiny with the first annual review of the Privacy Shield. Legal actions also continue in relation to other data export mechanisms such as Binding Corporate Rules and EU standard model clauses, particularly in relation to exports to the USA.
The UK passed the Investigatory Powers Act 2016 (IPA) at the end of last year. This controversial piece of legislation is likely to stay high on the agenda throughout 2017, not only because of the data retention requirements placed on stakeholders but also because it is already a focus for legal challenge. Human Rights campaign group Liberty announced it was seeking crowdfunding for its application for judicial review of the IPA in the wake of the CJEU ruling which held that general and indiscriminate retention of traffic and location data by electronic communications service providers is unlawful. Further down the line, the IPA may prove a stumbling block to the UK obtaining an adequacy decision from the European Commission in respect of personal data transfers from the EU once we are on the outside, but this is an issue unlikely to come into sharp relief in 2017.
We are likely to see the ICO (together with Ofcom) continue its attack on unsolicited marketing communications and efforts will be aided by incoming personal liability for directors for nuisance calls and fines which will come into effect in spring 2017, as well as the intended new statutory code on direct marketing under the Digital Economy Bill.
Digital Single Market
Much to general surprise, the European Commission stuck more or less to schedule with its Digital Single Market project in 2016, publishing a raft of consultations followed by draft legislation. To some extent, the easy stuff has now been completed. The draft proposals on online platforms, consumer protection, geo-blocking, copyright, communications and VAT among others, now face the long and potentially painful process of negotiation and agreement. We can, however, expect to see progress throughout the year.
Digital Economy Bill
The government published the Digital Economy Bill 2016 (Bill) in July. The Bill is wide ranging in the areas it tackles, with an overarching aim of improving internet connectivity and providing protections for internet users. The Bill covers areas including:
- universal service obligation – allowance for a new universal service order which is expected to include a requirement for broadband connections and services to be provided up to 10Mbs;
- switching – Ofcom to be given new powers to facilitate consumer switching, including setting out the information which providers must give to consumers;
- Electronic Communications Code – the Code is intended to replace the existing version and lower the cost of infrastructure rollout, including by providing rights for communications providers to install and maintain equipment on land;
- spectrum management – amendment of the Wireless Telegraphy Act 2006 (WTA), to introduce services which provide information about the availability of certain radio frequencies in order to facilitate the use of 'white space'. Ofcom will also be given the power to impose financial penalties for non-compliance with spectrum licences through amendment of the WTA;
- online pornography – online pornographic material will only be allowed to be made available online if it is done so in such a way as to make it not normally accessible to the under 18s. Breach will be subject to fines to be imposed by a newly created age-verification regulator;
- copyright – the maximum penalty for online copyright infringement is to be raised from two to ten years;
- registered designs – owners of registered design rights will be able to give online notice of their rights by reference on their products to a website of design right holders;
- copyright in broadcasts re-transmitted online – ss73 and 73A of the CDPA will be repealed. These provisions provide that copyright is not infringed where a wireless broadcast is re-transmitted by cable;
- digital government – measures to improve the delivery of public services including provision for a single gateway to allow certain public authorities to share personal data. Safeguards for the data are provided, in particular, by new offences for unlawful disclosure and a new code of practice;
- additional regulator powers – Ofcom and other regulators are given various new powers, for example, Ofcom will have the power to obtain information from communications providers to help give consumers clear information on services;
- direct marketing – the ICO's Direct Marketing Guide will be given statutory force as the Direct Marketing Code and there will be an obligation on anyone sending direct marketing communications to comply with direct marketing rules, making it easier for the ICO to take action for non-compliance.
The Digital Economy Bill is expected to achieve Royal Assent in spring 2017.
Another EU-led piece of legislation will be moving towards implementation. The EU Payment Services Directive (PSD2) came into force on 13 January 2016 and must be implemented into Member State law by January 2018 (when the UK will still be an EU Member).
Under PSD2, banks and other payment service providers (PSPs) must give payment initiation service providers (PSIPs) access to their customers' accounts to allow them to facilitate customer requested transactions. PSIPs will be subject to data security obligations and take on liability in relation to unauthorised transactions. PSPs are subject to rules on customer authentication, facilitating third party access to accounts, data security and liability as well as transparency requirements. The new legislation covers a wider range of organisations than the outgoing legislation.
The Small Business, Enterprise and Employment Act 2015 gave the Secretary of State the power to require large companies to publish information about their payment practices relating to business to business contracts for the supply of goods and services. Regulations introducing payment practice reporting obligations are now expected to come into force in April 2017.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.