Osborne Clarke’s Regulatory Outlook is intended to help your business to navigate a regulatory landscape increasingly influenced by the rapid developments in technology. As the Information Commissioner’s Office has starkly illustrated in recent weeks, regulatory risk can have a serious impact on the bottom line. The ICO’s intention to fine Marriott £99m and British Airways £183m confirms that much-talked-about GDPR risks are beginning to crystallise, and that when it comes to enforcement, the ICO is a regulator that means business.
In this edition of the Regulatory Outlook, we take a look at the powers and behaviour of a number of regulators that your business may find itself dealing with in one way or another. Which regulators have powers to compel businesses to hand over documents? Which can, and which do, conduct dawn raids? Which have powers to bring prosecutions against individuals, and do they typically do so?
We also look at how the regulatory landscape is being impacted by digital transformation: in terms of both the new technologies that regulators are focussing on, and how regulators are adapting their own behaviours and toolkits. Some of the themes that emerge are that:
- Digital transformation is affecting all areas of business and regulation. From the difficulties that cryptocurrency causes in tracing proceeds of crime, to the regulation of influencer marketing on social media or 3D printing of foods, digital transformation is pervading all areas – as are the challenges of regulating it.
- The breadth of the challenges varies markedly. For some regulators, it is about applying existing powers to specific new technologies, as in the example of 3D printed foods. In other areas, such as competition, principle-based regulation has proved itself very adaptable over the decades, but new platform-centred models, price-comparison algorithms and the central role of data in powering digital markets are causing regulators to pause to verify whether longstanding approaches remain effective.
- It is not always the most cutting-edge technology that is the most disruptive. Electronic commerce is far from new in itself, but the prevalence of smartphones, the use of new technologies in warehouses and logistics, and the rise of the gig economy have all contributed to a dramatic shift in customer habits and expectations. Advertising, competition, financial services and consumer protection regimes are all having to adapt as a result.
- Keeping pace with technology will always be a challenge for regulators. But regulators are taking a much more proactive approach to innovation. The Advertising Standards Agency has started using avatars to probe ads being directed at children, while the Financial Conduct Authority’s ‘regulatory sandbox’ initiative takes a collaborative approach, and one that may be extended cross-sector.
Navigating this complex, evolving regulatory landscape requires businesses to have a strong compliance function, with systems and processes that can be applied to a range of different regulatory risks, in whichever territories you operate in worldwide. In addition to deep expertise across the spectrum of business regulation, Osborne Clarke’s Global Compliance team can help you design and operate the overarching systems that you need in order to understand and manage all of the regulatory risks that you may face.