Commercially Connected Shorts - 14 June 2023

Round-up of knowledge

Welcome to Commercially Connected shorts, our weekly bitesize newsletter summarising the latest updates in UK commercial law.

This week we look at:

• In the news: UK-US economic partnership announced
• Privacy: UK-US data bridge update
• Public sector: Procurement Bill update
• Crypto assets: Updates from UK and EU

Atlantic declaration: plans to build on existing relationship and focus on technology

Last Thursday saw the start of ”an innovative economic partnership” between the UK and US named the “Atlantic Declaration”.

Measures included within the partnership plan cover:

• working to reduce vulnerability across critical technology supply chains
• the launch of a new civil nuclear partnership
• in principle commitment to a new UK-US data bridge (see below for more)
• the safe and responsible development of AI starting with the international summit on AI safety in London later this year
• enhancing co-operation on cyber security measures
• research collaboration on AI; future telecoms; quantum; semi-conductors and engineering biology
• increased investment opportunity

Negotiations will now start on the detail with immediate focus on a Critical Minerals Agreement.  As a net exporter of  raw materials for electronic vehicle (EV) batteries this agreement aims to help UK based firms who export to the US.  Buyers in the US benefit from tax credits where their vehicle is produced using material from the US or countries whom the US has a critical mineral agreement with.

We already know that the Government has plans / policy for these areas (having covered the items listed in recent bulletins) so it will be interesting to see the output from the detailed work with the US and how this impacts businesses “on the ground” – will this partnership help the speed of outputs being produced/implemented?  We will keep you updated on developments!

Plans for UK-US data bridge

Referenced as part of the Atlantic Declaration agreed last Thursday, the UK and US report they have reached an “in principle” commitment to establish the UK Extension to the EU-US Data Privacy Framework.

This would mean that US companies who are approved to join the Framework would be able to receive UK personal data more easily. The UK Government consider that the data bridge would effectively “speed up processes, reduce costs and increase opportunity for trade”.

These proposals do need to be finalised and it has taken 2 years to get to this stage.  Further work is required on the technical detail and the UK reviewing US data protection laws and practices.  The ICO will be engaged in this process.  This is not a first for the UK – we already have such data bridges with other countries such as the Republic of Korea.

We will keep an eye on developments and let you know if there is final agreement on this which will mark a significant development in UK-US contracting and transfers of data.

Procurement Bill will include measures to protect national security

The UK Government has announced that stepped up measures to protect national security in government contracts are to be brought forward.

Two new measures have been tabled for consideration:

• establishing a National Security Unit for Procurement - based in the Cabinet Office it is proposed this team will investigate suppliers who pose risks to national security and assess whether companies should be barred from public procurement. This will be a proactive team investigating suppliers who may pose risks
• new powers to ban suppliers from specific sectors (eg: defence) whilst permitting them to bid in non-sensitive areas – this will be based on a risk profiling exercise

Alongside this, the Government has also indicated it will publish a timeline for the removal of surveillance equipment which is produced by companies subject to China’s National Intelligence Law from sensitive central government sites.  This follows the halt of installation of such equipment last year.

Steps to address the misleading promotion of crypto assets

Following on from the plans announced in April by UK bodies to look at issuing guidance to fin-fluencers, the FCA has introduced a final draft of its new advertising rules which will apply from 8 October 2023 and include:

• a cooling off period for first time investors
• the banning of “refer a friend” bonuses
• high risk warnings on promotions for consumers

Meanwhile in the EU, steps have now been asked of the European Commission and the Consumer Protection Co-operation Network by European consumer group (BEUC).

BEUC have filed a complaint against a number of social media platforms for “facilitating the misleading promotion of crypto assets”.

The complaint follows a report by BEUC “Hype or harm, The greatest social media crypto con” which provides the evidence of the misleading crypto promotions.  Their concerns are that the planned crypto regulation Market in Crypto Assets (MiCA) is still some time off being in force (30 December 2024) and that the EU Digital Services Act obligations regarding advertising transparency, traceability of traders, notice and action is still several months from being fully operational and applicable to social media companies.  BEUC therefore raise the concerns under the Unfair Business to Consumer Commercial Practices Directive which does apply to platforms who need to exercise care to ensure their users are not harmed by misleading or aggressive commercial practice.

Measures sought by BEUC include:

• Stricter advertising policies
• Measures to prevent influencers misleading consumers on the nature of crypto
• Report to the Commission on the effectiveness of measures to protect consumers in this area
• Liaison with financial services authorities to prevent the misleading promotion of crypto

We will keep an eye for how this plea for action is reflected in EU law / practice.

For further information, please email your usual contact or our Commercial PSL team: