This ruling calls for congressional clarity

In a significant legal victory, Ripple Labs, the company behind the XRP cryptocurrency, has emerged triumphant in its case against the US Securities and Exchange Commission (SEC). The ruling, which states that the open market sales of XRP do not qualify as a security, carries implications that extend beyond Ripple itself and could reshape the regulatory landscape for cryptocurrencies in the United States.

According to the recent Electronic System Design (ESD) Alliance report, evolving consumer expectations are reshaping the needs and economics of the internet. In the EMEA region, consumers are seeking a sustainable and secure internet infrastructure, demonstrating a growing concern about the carbon footprint of their broadband connectivity. Additionally, as the line between personal and professional lives blurs with hybrid work, security has become a top priority for consumers when choosing broadband packages.

The ruling in favour of Ripple adds to the ongoing debate around crypto regulation. Nicklas Nilsson, a Thematic Intelligence Consultant at GlobalData, suggests that the decision provides a strong precedent for classifying digital assets as non-securities. This challenges the SEC’s approach of categorizing most cryptocurrencies as securities and may impact other enforcement actions taken by the regulatory body.

While the ruling clarifies the status of XRP sales to retail investors, stating they are not unregistered securities, it also deems direct sales of XRP to institutional investors as unregistered securities. This nuance in the ruling may impact the funding landscape for crypto projects, which traditionally rely on early sales to institutional investors and venture capitalists.

Despite the Ripple victory, uncertainties persist. The ruling could face appeal or reach the Supreme Court, and the SEC may argue that the decision was based on the understanding of retail investors in the earlier stages of the crypto industry. Consequently, industry experts and stakeholders are calling for Congress to intervene and provide much-needed clarity on the regulatory status of digital assets in the United States.

The recent legal development serves as a reminder of the need for ongoing dialogue and collaboration between regulators, technology companies, and industry participants. With the potential to shape the future of crypto regulation, the outcome of this case underscores the importance of finding a balanced approach that fosters innovation, ensures consumer protection, and establishes clear guidelines for the rapidly evolving digital asset landscape.

Tags: cryptocurrencyGlobalDataSEC

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Lack of transparency and consumer awareness prompts ACCC’s investigation

The Australian Competition and Consumer Commission (ACCC) has opened a call for submissions from consumers, businesses, and interested stakeholders regarding data broker services in Australia. This initiative is part of the ACCC’s ongoing five-year digital platform services inquiry, which aims to examine the practices of data brokers and the products and services they offer. The focus of the inquiry is on potential competition and consumer issues arising from the supply of data broker services.

In an issues paper published today, the ACCC seeks views and poses questions about the business practices of data brokers, as well as the nature of the products and services they create and provide. The ACCC Chair, Gina Cass-Gottlieb, highlighted the lack of transparency and awareness surrounding data brokers in Australia, despite the vast amount of information they collect about Australian consumers and their pivotal role in facilitating information exchange between businesses.

Data brokers gather information from various sources, including social media sites, internet and search services, apps, customer loyalty programs, card payment providers, and public records such as electoral rolls. The collected data encompasses a wide range of details, such as names, addresses, age, browsing behaviour, purchasing patterns, and socio-economic and demographic information.

Data brokers develop products and services such as audience profiling reports, consumer purchasing data, and risk and fraud management solutions for applications like tenancy or insurance assessments.

The ACCC’s inquiry specifically targets businesses that collect information from third-party sources and subsequently sell or share that data with other organizations (third-party data brokers). The focus does not extend to businesses that collect data from their own customers for internal use or for selling or sharing with others (first-party brokers).

Cass-Gottlieb emphasized that many Australian consumers may be unaware that their information is being collected, stored, and sold by third-party data brokers with whom they have no direct relationship. The inquiry aims to explore how these data brokers collect and utilize information to create products and services, while also examining potential competition and consumer issues that may arise.

The ACCC will evaluate the products and services offered by several data brokers, including CoreLogic, Equifax, Experian, Illion, LiveRamp, Nielsen, PropTrack, Oracle, and Quantium.

“We are eager to hear from data brokers, as well as consumers and businesses that interact with the data broker industry. We are also seeking to understand how data products and services can benefit small businesses,” stated Cass-Gottlieb.

Businesses involved in selling or providing data to data brokers, as well as those that purchase or use data broker products or services, are encouraged to respond to the issues paper by 7 August 2023. The ACCC intends to gather insights from a wide range of perspectives to inform its investigation into data broker practices in Australia.

Tags: ACCCAustraliaData brokers

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The surge in funding for biologic innovator drugs is attributed to the enactment of IRA

According to a recent report by GlobalData, biotechnology companies in the United States have secured significantly more venture financing for biologic innovator drugs compared to small molecule innovator drugs. The analysis reveals that from 2018 to 2023 (year-to-date), US biotechs received 19 per cent or $US7.6 billion more in venture financing for biologic drugs, reaching a total deal value of $Us48.9 billion.

The surge in funding for biologic innovator drugs is attributed to the enactment of the Inflation Reduction Act (IRA) in the US, which aims to lower prescription drug prices. The IRA grants Medicare the authority to regulate drug prices and limit increases above inflation. Biologics, which are complex protein-based drugs, are granted a 13-year protection period before price controls come into effect. In contrast, small molecules, which are simpler chemical-based drugs, undergo price negotiations after only nine years of approval.

Ophelia Chan, a Business Fundamentals Analyst at GlobalData, suggests that the IRA could further favour biologics over small molecules, influencing the financing decisions and drug development pipelines of biotech companies in the future.

While the IRA has had negative effects on small molecule companies and has increased capital costs, impacting early-stage investments in the biotech industry, it has also led to an upswing in collaborations within the biopharmaceutical sector.

Despite the potential challenges posed by the IRA, including its impact on innovation, drug pricing, and the loss of exclusivity for major products, the report highlights that collaborations within the biopharmaceutical industry can help mitigate costs and support future innovation.

Chan concludes by mentioning that while the implementation of the IRA may affect revenues and reduce investments in research and development (R&D), ongoing collaborations within the industry can play a crucial role in fostering innovation and offsetting financial burdens.

As the biotech landscape continues to evolve in response to regulatory changes, the allocation of venture financing between biologic and small molecule drugs will remain a key area of interest for industry stakeholders and investors alike.

Tags: BioTechGlobalDataUS

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EU proposes regulations to ensure safe and responsible use of AI

As part of its digital strategy, the European Union (EU) aims to regulate artificial intelligence (AI) to establish better conditions for the development and utilization of this innovative technology. AI has the potential to bring numerous benefits, including improved healthcare, safer transportation, more efficient manufacturing, and sustainable energy solutions.

In April 2021, the European Commission introduced the first regulatory framework for AI within the EU. The proposal involves the analysis and classification of AI systems based on the risks they pose to users. The level of risk determines the extent of regulation required. Once approved, these regulations will become the world’s first rules specifically addressing AI.

Key Objectives of AI Legislation According to Parliament

The European Parliament prioritizes the safety, transparency, traceability, non-discrimination, and environmental sustainability of AI systems deployed in the EU. It emphasizes the need for human oversight to prevent harmful outcomes, advocating for people to be in control rather than relying solely on automated decision-making.

Parliament also aims to establish a technology-neutral and uniform definition of AI that can be applied to future AI systems, ensuring clarity and consistency in its implementation.

AI Act: Tailored Regulations Based on Risk Levels

The newly proposed rules outline obligations for AI providers and users based on the risk levels associated with their AI systems. While many AI systems pose minimal risks, they still need to undergo assessment procedures.

Unacceptable Risk

AI systems considered to be an unacceptable risk will be prohibited. These include:

• Cognitive behavioural manipulation of individuals or vulnerable groups, such as voice-activated toys encouraging dangerous behaviour in children.
• Social scoring, which involves classifying individuals based on behaviour, socio-economic status, or personal characteristics.
• Real-time and remote biometric identification systems, including facial recognition.

Certain exceptions may be allowed. For example, “post” remote biometric identification systems that identify individuals after a significant delay may be permitted for prosecuting serious crimes, but only with court approval.

High Risk

AI systems that have a negative impact on safety or fundamental rights will be categorized as high risk and will fall into two main groups:

• AI systems used in products covered by the EU’s product safety legislation, such as toys, aviation, automobiles, medical devices, and lifts.
• AI systems falling under eight specific areas that will require registration in an EU database, including biometric identification, management of critical infrastructure, education and vocational training, employment and worker management, access to essential services, law enforcement, migration and border control management, and legal interpretation and application of the law.

All high-risk AI systems will undergo thorough assessments before entering the market and throughout their lifecycle to ensure compliance and mitigate potential risks.

Generative AI

Generative AI, exemplified by models like ChatGPT, will be subject to transparency requirements, including:

• Disclosing that the content was generated by AI.
• Designing the model to prevent the generation of illegal content.
• Publishing summaries of copyrighted data used for training.

Limited Risk

AI systems with limited risk will need to comply with minimal transparency requirements, enabling users to make informed decisions. After interacting with these applications, users can decide whether they wish to continue using them. Users should also be made aware when they are engaging with AI, particularly for systems that generate or manipulate image, audio, or video content (e.g., deepfakes).

The EU’s proposed regulations aim to strike a balance between fostering innovation and ensuring the responsible and ethical use of AI technology. As the legislation progresses, stakeholders across industries will closely monitor its development and implementation to understand its impact on AI practices within the EU and beyond.

Tags: AIEU

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