ICLG - Digital Business Laws and Regulations - covers e-commerce regulations, data protection, cybersecurity, cultural norms, brand enforcement, data centres and the cloud, trade and customs and tax treatment and more.
1. Overview
The year 2025 marks a pivotal moment in the convergence of technology and law. As rapid technological advancements and shifting geopolitical landscapes reshape our world, legal frameworks across the globe are striving to keep pace with these dynamic changes. Amidst fragile economies, regulators are increasingly urged to adopt more business-friendly approaches. In this compelling chapter, we delve into the most significant legal trends emerging in the tech sector and examine how businesses are strategically responding to these evolving challenges. Join us as we uncover the future of law and technology, and what it means for the global business landscape.
2. AI
AI is starting to revolutionise many industries, and its legal implications are profound. The concept of AI scaling law, where typical AI model performance doubles every six months, is reshaping the tech landscape. The arrival of Deepseek has turned the use of generative AI on its head. This demands more efficiency and there is an impetus to make algorithms, computer power and energy consumption greener and more efficient. AI agents are beginning to reshape the way that we transact online. These autonomous tools can act on our behalf, making decisions and executing orders with minimal human input. However, this requires guardrails to ensure alignment between providers' and users' intentions. Legal frameworks are adapting to ensure responsible AI development, focusing on transparency, literacy, accountability, and ethical considerations, yet the EU's AI Act may prove to be too restrictive and costly – no wonder the US and tech scale-ups are synonymous. The UK government has published its AI Opportunities Action Plan, outlining its strategy to harness AI for economic growth, job creation, and improved public services, and is consulting on regulating generative AI.
3. Quantum Computing and the Metaverse
Quantum computing develops, although its uses are not so clear. According to Gartner, it may make most conventional asymmetric cryptography unsafe, so cybersecurity measures will need to be reviewed in detail. The Metaverse is now known as "spatial computing". It digitally enhances the physical world by augmented (AR), extended (XR) and virtual reality (VR) technology. It is being used in areas like training, workflows and collaboration. Rather like AI, these technologies are throwing up challenges in the areas of copyright and trade marks.
4. Data Privacy and Protection
With the increasing volume of data generated, data privacy and cyber should remain a boardroom concern. In 2025, we see the implementation of more stringent data privacy laws globally, while legal challenges surrounding cross-border data transfers are intensifying. In the UK, we are waiting for the Information Commissioner's final guidance on generative AI, while the European Data Protection Board has published an interesting opinion on data protection and AI. The Labour government's Data (Use and Access) Bill continues to pass through the parliamentary process and, among other things, will align the regulatory regimes for cookies and other storage technologies and direct marketing with the UK GDPR. It also clarifies the rules around automated decision making and the (re-)use of personal data for scientific research. In addition, it includes provisions for digital verification services and digital IDs.
5. Digital Platforms and Market Regulation
The digital markets competition provisions in the UK's Digital Markets, Competition and Consumers Act 2024 came into force on 1 January 2025 and grant the CMA enhanced powers to regulate digital markets. This includes designating firms with strategic market status (SMS) and imposing tailored codes of conduct to ensure fair competition. The CMA has already announced two SMS investigations. Other regulators are also investigating big tech companies, with the US acting against TikTok, and the European Commission carrying out multiple investigations under the Digital Markets Act and Digital Services Act. In addition, disinformation is a big challenge, especially when platforms like Meta disband their disinformation teams – we may see new tech aimed at increasing trust. When it comes to online safety, many jurisdictions have online safety laws, and platforms should be thinking about how they can harness emerging tech to implement secure and reliable age assurance mechanisms that prevent children from encountering harmful content. Expect to see leaps and bounds in the availability of technologies that drive efficient "notice and takedowns", which is likely to be achieved by harnessing large language models (LLMs) for volume-focussed content moderation capabilities.
6. Strengthening Cybersecurity Regulations
As cyber threats become more sophisticated, governments are enacting stricter cybersecurity regulations. The Cybersecurity Maturity Model Certification (CMMC) in the US and the Network and Information Systems (NIS) Directive in the EU are examples of regulatory efforts to enhance cybersecurity resilience. The EU's DORA (digital operational resilience for regulated financial entities) has applied since the middle of January 2025. The UK is consulting on proposed new laws to combat ransomware attacks and has proposed a legislative regime for critical third-party suppliers.
7. Fintech and Financial Regulations
Thankfully, regulatory sandboxes are becoming more prevalent, allowing fintechs to test innovative products in a controlled environment. The legal landscape for crypto and blockchain is maturing. Countries are developing comprehensive regulatory frameworks to address issues such as fraud, money laundering, and consumer protection. Fintech will benefit from continued AI adoption, especially in fraud prevention, yet operational resilience and human oversight will remain critical.
8. Environmental and Climate Tech
The push for sustainability is driving the development of climate tech, with legal frameworks supporting green innovation. Governments are introducing regulations to promote renewable energy, reduce carbon emissions, and encourage sustainable practices. Environmental, Social, and Governance (ESG) compliance is becoming a legal requirement for tech companies, even though some have been stepping back from ESG activities. For example, in the EU, regulations are being implemented to ensure that businesses adhere to ESG standards, which is finally affecting investment decisions and corporate strategies.
9. Healthtech: AI-driven Diagnostics and Personalised Medicine
The health tech sector is poised for significant advancements in 2025, particularly in AI-driven diagnostics and personalised medicine. AI algorithms will enhance diagnostic accuracy and speed, enabling early detection of diseases and more effective treatment plans. Wearable health tech devices will become more sophisticated, providing continuous health monitoring and personalised health insights, which may be able to detect illness at earlier stages. The rise of AI in health tech brings several legal challenges. Ensuring the accuracy and reliability of AI-driven diagnostics will be key, raising questions about liability for errors. The use of personal health data for AI training and personalised medicine will require stringent data privacy and consent protocols, mainly due to the processing of special category data.
10. Intellectual Property
Patent law is generally evolving to keep pace with technological innovation. Reforms are being introduced to streamline the patent application process and address challenges related to AI-generated inventions – the rise of digital content is prompting changes in copyright law. Legal frameworks are typically adapting to protect creators' rights while balancing the interests of consumers and tech businesses. The UK government launched a consultation late in 2024, seeking views on how to ensure the legal framework in the UK for copyright and that AI can support both the creative industries and the AI sector. Its opt-out proposals were controversial, so we can expect to see some changes to the UK's original preferred approach.
Originally published by ICLG.
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