Here’s your top 3

#1: Renewed focus on cyber resilience

The major tech story from the last few weeks? The IT outage caused by a US cybersecurity firm’s faulty software update, which Microsoft estimates affected 8.5 million Windows devices worldwide. There was significant disruption, with planes grounded and banks, other businesses, the media and a range of public services also hit.

While the incident wasn’t malicious, the National Cyber Security Centre warned about an increase in related phishing activity. Unsurprisingly, there are questions about reliance on too few providers and the vulnerability of our critical infrastructure. One week earlier, the International Chamber of Commerce published a working paper on protecting the cybersecurity of critical infrastructures and their supply chains.

“The NCSC warned last year of an ‘enduring and significant threat’ to the UK’s critical infrastructure. Just a few days before this outage, a new Cyber Security and Resilience Bill was announced in the King’s Speech. We’ve been waiting to see what changes would be made to the UK’s existing EU-derived regulations, which have already been upgraded in Europe.

“A key feature of the proposed legislation is ‘mandating increased incident reporting’, ‘expanding the type and nature of incidents that regulated entities must report’. We’ll be monitoring what this means practically, as the Bill progresses. We’re also waiting to see how the 2 voluntary codes of practice for software vendors and on AI cybersecurity develop – they’re currently being consulted on.”

– Nick Stubbs, Partner, Technology & Digital

For more information on operational resilience in the financial sector, see our recent article on DORA developments.

#2: Product safety reform

Since 29 April 2024, manufacturers, importers, and distributors of consumer connectable products have had to comply with the UK’s new product security regime. But we’ve also been waiting for the results of a 2023 government consultation on reform of the wider product safety regime, to overhaul our current laws to make them fit for the modern digital age. Enter the Product Safety and Metrology Bill, also announced in the recent King’s Speech.

“This new Bill is a welcome development. Our existing product safety regime is based on EU-derived laws which have been developed over a long period of time. They’re already in the process of being upgraded in Europe, as we’re seeing with cybersecurity. The government has indicated that the Bill will allow for mirroring or divergence from updated EU rules, depending on what’s best for businesses and consumers. It will also equip the UK with what’s needed to keep pace with technological advances and their associated challenges.”

– Luke Jackson, Director, Commercial

#3: What’s next for data protection law?

Reform of our existing data protection laws was on the previous government’s agenda for a few years, with the stated aim of seizing on post-Brexit freedoms. The Data Protection and Digital Information Bill introduced last year was designed to amend existing laws to streamline data controller and processor obligations, and change the rules around data subject access requests, cookie pop-ups and restrictions on solely automated decision making. But with the Bill failing to progress in the run-up to the election, it was unclear what stance a Labour government might adopt in relation to potential reform.

“It’s notable that the Digital Information and Smart Data Bill announced in the King’s Speech doesn’t have ‘data protection’ in the title. It seems to be aimed more at some of the other aspects of the previous Bill, such as introducing a framework for provision of digital verification services, and enabling smart data schemes.

“There’s mention of ‘targeted reforms to some data laws’ where there’s ‘currently a lack of clarity impeding the safe development and deployment of some new technologies’. It’s not clear at the moment what that will mean for businesses, and we’ll be keeping a close eye on developments as they unfold.”

– Grace Stirrat, Associate, Regulatory & Compliance

More legal and regulatory developments…

• The European Union AI Act was formally published and most provisions will apply from 2 August 2026.
• We were expecting a new Artificial Intelligence Bill to introduce binding regulation on the developers of the most powerful AI models. While this wasn’t mentioned explicitly in the King’s Speech, there was a clear indication that legislation along these lines is coming down the track.
• The Financial Conduct Authority and Payment Systems Regulator launched a joint call for information on big tech and digital wallets. The regulators want to better understand the impact of digital wallets’ increasing popularity on consumers and businesses. Feedback is requested by 13 September 2024 and an update will be provided by Q1 2025.
• The Court of Appeal ruled that a company’s AI invention was a computer and therefore not protected under patent law.
• The Competition and Markets Authority signed a joint statement with its EU and US counterparts on competition in generative AI foundation models and AI products.
• We’ve also seen the CMA launch a new merger inquiry into Microsoft’s hiring of certain former employees of Inflection AI, Inc. and secure undertakings from Wowcher to change its online selling practices.
• The Law Commission published a scoping paper on ‘Decentralised Autonomous Organisations’ – essentially a new type of online organisation using rules set out in computer code.
• The Information Commissioner’s Office said in a statement that it was “disappointed” after Google announced it no longer plans to block third party cookies in Chrome. The CMA is seeking views until 12 August 2024 on Google’s revised approach, which involves introducing a user-choice prompt allowing users to choose whether to retain third party cookies.
• In one of a number of recent examples pushing back against big tech, the European Commission sent X its preliminary findings that the company is in breach of the Digital Services Act in areas linked to dark patterns, advertising transparency and data access for researchers.

…and in other news

• In a sign of things to come, it was announced post-election that the Department for Science, Innovation and Technology “will expand in both scope and size bringing experts in data, digital and AI from the Government Digital Service, the Central Digital and Data Office and the Incubator for AI to unite efforts in the digital transformation of public services under one department”. DSIT will be the digital centre of government.
• Other recent DSIT press releases include: a £16 million boost to upgrade how UK Biobank uses and stores its growing wealth of health data; £100 million in funding for 5 new quantum research hubs; and an Action Plan to identify how AI can drive economic growth.
• The BBC reported on the unveiling of a quantum computing chip by a UK firm which could be “pivotal” to creating effective quantum computers.
• The Boston Consulting Group published the results of a global survey on AI at Work. Key findings include: worker confidence in generative AI has grown since 2023, but so has fear of job loss; frontline employees are less confident about generative AI than managers and leaders; and frontline employees (28%) are far less likely than leaders (50%) to have received training in how AI will affect their job.
• According to this article from the Guardian, the co-founder of a UK chipmaker recently sold to Japan’s SoftBank (the same company that acquired chip designer Arm in 2016), warned of a tech “talent drain” to the US if pension funds here fail to back the sector.
• The National Cyber Security Centre published a blog post on sharing lessons learned from cybersecurity incidents.
• The Royal Institute of British Architects published horizon scans looking at trends in technological innovation that will shape society and the built environment over the next decade. For help on anything PropTech/ConTech-related, contact Senior Associate Ryan Doodson.
• And finally, this BBC article discusses Elon Musk’s recent announcement that Tesla will start using humanoid robots next year.

If you have queries about any of the points covered in this edition of the Technology & Digital round-up, or need further advice or assistance, please get in touch with Sally or one of our Technology & Digital experts.

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