What technology development will create the most legal change in the jurisdiction?
The rapid deployment of blockchain technologies and digital currencies is likely to significantly transform a large number of industries – banking, domestic and international commerce, real estate transactions, privacy/cybersecurity, just to name a few – in coming years. That transformation will drive legal and regulatory change, as existing laws may not be easily applied to innovative blockchain solutions, forcing the development and adoption of new rules. In addition, the rise of blockchain technologies – smart contracts and sovereign digital identities in particular – are likely to change the kinds of work that lawyers do, and to replace existing legal protections such as real estate title searches and data privacy regimes with seamless, self-governing and self-executing solutions.
In April 2017, the Cabinet of Minister approved a draft of the National Strategy to promote blockchain technology. It is expected that blockchain technology and smart contracts will be adopted in various government departments and regulatory authorities. Furthermore, the Prime Minister has also hinted that it is the intention of the government to look at Bitcoin and other cryptocurrencies with an open mind. It is envisaged that, if the National Strategy is adopted, this will create a number of legal changes throughout all sectors across the board, but particularly to the Fintech sector.
Artificial intelligence as a means of analysing Big Data or providing services that applies machine learning will greatly affect the Norwegian legal system and necessitate a significant number of changes with regard to liability and the assignment of rights and obligations. For instance, Norwegian law would have to be amended in order to solve legal issues concerning the allocation of intellectual property rights of AI created intellectual property, product liability of autonomous vehicles or robots, smart contract management and the certification and liability of medical and health care diagnostics and procedures conducted by AI and robots, inter alia.
The use of Artificial Intelligence will create the most legal change in Turkey as there is currently no legislation which deal with AI. We believe we will see the first impact with self-driving cars and driver assistance systems.
Big data, cloud computing, internet of things (IoT) and AI may create the most legal changes in China. These new technologies will all involve the processing and the storage of huge amount of data, and will eventually direct to the same legal issues in the protection of personal information and privacy, data and network security as well as the security examination in cross-border data transfer. Another legal change brought by AI could be the legislation specifically for proportionating liabilities when AI malfunctions.
We believe that the Fintech industry growth in Mexico will create a new paradigm in the financial and technology legal framework in Mexico. In fact, Mexico is developing a Fintech Law which purpose will be to facilitate the access to financial products and services.
Companies shall be open to adopt new technologies and new business models in order to innovate on how thigs have been done in the past years.
Also, Internet of Things IoT will create new concerns regarding privacy and data protection, along with the technological development that will have to be created in order to support the whole IoT industry.
Finally, Smart Cities will be a disruptive matter that is supposed to update legal framework in Mexico as Smart cities involve diverse social, economic, structural, technological and regulatory contexts which are meant to meet the needs of citizens and create new opportunities to companies and operators.
Blockchain has perhaps the greatest potential to disrupt the legal market and current sets of legal arrangements.
Whilst Blockchain will not eliminate the need for lawyers it may certainly reduce it and in doing so create new challenges in terms of regulatory oversight, dispute resolution etc which those lawyers who remain will then need to grapple with.
Blockchain is in essence a public/distributed ledger; in essence, it is a network which creates a common and continually updated view of "the truth" in terms of its subject matter, whether that be ownership of Bitcoin or some other form of financial instrument. However, the potential application of Blockchain-based technology and processes is far wider, and could for example extend to:
- "smart contracts" that are conducted automatically once defined criteria are met;
- land ownership records (and the basis for taxation thereon);
- IP rights management (eg protecting rights in copyrighted works or establishing valid trade marks).
It is hard to name only one technology development that would have the biggest legal impact, since any such important development has the ability to produce equally important legal change.
In Romania, as well as worldwide, one of the closest technology developments that have an appreciably effect on society is the development of the Internet of Things (IoT). We now live in a world in which all of our devices are connected to the Internet and the cloud. IoT has developed beyond just laptops, smartphones and tablets and now, includes everything from fitness trackers to even "smart" toys ("smart" fashion toys, like "My friend Cayla" – that has been recently designated as a spy tool by authorities across Europe).
One of the biggest problems that the IoT has is security. When all of your devices constantly collect data and communicate between themselves and even interact with the environment around them, one must be sure that they are not easily "corrupted" and that one`s data is not "stolen". Moreover, there is a need to develop devices and networks with an intense focus on security and create a compatible platform for the IoT. Currently, there are apps and devices that are unable to communicate between themselves due to lack of standardization. Hence, security and standardization are two major aspects to be dealt with by coming legislation.
In addition, the use of IoT also means that all of our data is collected and further processed for commercial purposes, as companies rely more and more on Big Data Analytics (i.e. the process of collecting, organizing and analyzing large sets of data to discover patters and other useful information) to understand and predict human behavior, laws will need to cover not only more efficient data privacy mechanisms.
Although efforts are being made in enhancing security and protecting privacy, one still cannot keep up with the fast pace of technology.
We believe the Fintech technologies, which are revolutionising the banking and financial services industry, as well as Internet of things and artificial intelligence solutions, are the technology developments which in the coming years will create the most legal changes in Italy.
It is anticipated that smart contracts will have a substantial impact on – amongst other – real estate transactions, payment transactions and financial instruments such as letters of credit. An increased use of smart contracts could trigger a fundamental change in the way Dutch contract law is applied to such contracts. Traditional contract law concepts may not necessarily work in case of self-executing contracts which enable to execution of complex financial transactions without any intervention. In this respect, the manner in which Dutch law deals with the interpretation and performance of agreements and the remedies available to claimants in case of non-performance by the other party may need to be revisited.
The use of encryption and blockchain technologies will probably lead to important changes in the Brazilian legal system. On encryption, several discussions are taking place in the Supreme Court regarding the lawfulness of using strong encryption systems to ensure privacy, in opposition of allowing law enforcement agencies to wiretap private communications systems. As for blockchain, we believe that such technology will probably lead to a material change on how legal documents are treated. By creating a safe environment for identifying individuals/legal entities online and assuring integrity of documents in a low cost way, it will certainly affect and lead to a material change on how the judiciary and other stakeholders deal with documentation in the country.
One of the newest technology developments that has kick-started a progression of changes in many areas of Indonesian law is the emergence of application-based transportation services, e.g., Uber, Grab, and Go-Jek. Previously, a line divided the transportation business and the application provider business, in that a company could not “provide transportation” when it was “only” supported by a mobile application, with no actual fleet of vehicles by its side. The appearance of application-based transportation services triggered the issuance and amendment of various regulations, including the amendment of the Business Fields Standard Classification (Klasifikasi Baku Lapangan Usaha Indonesia or “KBLI”) and the issuance of a Ministry of Transportation regulation that specifically regulates the provision of non-trajectory public transport, to name a few.
Over the last few years, the Indian Government has sought to create a Unique Identification Number (“Aadhaar”) card, which includes personal information about each citizen in India, such as name, address, contact number, photograph and biometric information (fingerprints and retinal scan), and store the data of all citizens in a central repository. Though, under law, proof of Aadhaar is necessary for receipt of certain subsidies, benefits and services, it does not make enrolment to Aadhaar compulsory. Some of these services/benefits include payment of taxes, application for telephone connections, opening and operating bank accounts, and application for gas connections. However, citizens who have not yet been assigned the Aadhaar card by the Government are offered alternate and viable means of identification for receipt of certain subsidies, benefits and services. Through Aadhaar, the Government intends to use technology, including electronic storage of massive amounts of personal data, to deliver citizen services. This has raised fundamental questions relating to data security as well as individual privacy. Various petitions have been filed in the Supreme Court questioning the constitutional validity of this massive scale of change brought about by use of technology. Although the Supreme Court is yet to decide on the constitutional validity of the Aadhaar Act, 2016, it has upheld the linking of Aadhaar for the purpose of filing income tax returns. Further, the Court has observed that right to privacy is not an absolute right, and the Government is free to impose reasonable restrictions on the same. The introduction of Aadhaar is also expected to bring about changes to existing technology laws, especially those relating to data security and online privacy.
The increased use of blockchain technology may create the most legal change in the Israeli jurisdiction in the upcoming years, as such technology may disrupt conventional ways of doing business. Law makers may need to adopt and find creative ways to "manage" and regulate the use of this technology in different business cases, given the blockchain technology`s un-centralized nature and other unique features. For example, among the areas affected are security (e.g., anti-laundering laws and national security) and data protection and privacy. Such legislation may be local or part of a global effort to regulate the blockchain technology and its uses.
The increasing adoption of cryptocurrencies and blockchain technology in Singapore will drive the need for significant legal change. Currently, there is no regulatory framework in place to govern the use of such technology or provision of related services in Singapore. However, in 2016, the MAS has proposed, in a consultation paper, a new regulatory framework and governance model for payment solutions. Among other changes, the consultation paper proposes to bring all payment regulations under a single framework that will provide for the licensing, regulation and supervision of all payment services, including stored value facility holders, remittance companies and virtual currency intermediaries. Hence, it is likely that virtual currency intermediaries (such as Bitcoin exchanges) will be subject to greater regulation and scrutiny in the near future.
The blockchain might generate the most substantial legal change, in France like elsewhere. As this technology relies on a chronological transactions database that is both distributed and encrypted, it ensures the integrity of the identification of the author of a legal act as well as the apparently flawless traceability of the origin and subsequent stages of a transaction. Consequently, the system may be used for transactions such as money transfers, land registration, royalty collection societies, the issuance of bonds, of diplomas, etc. above all without territorial boundaries nor government regulation. To some extent the blockchain might also offer an effective alternative to the ‘electronic signature’ as devised under current legislation (see Question 11).
In parallel, more and more objects are connected to the Internet thanks to the Internet of Things, which the International Telecommunication Union defines as a ‘global infrastructure for the information society that provides advanced services by interconnecting objects (physical or virtual) with information and communication (…)." IoT gives another major example of a communications network that develops itself regardless of territorial boundaries and with only limited government control.
The most legal change is to be expected regarding artificial intelligence. As mentioned above the liability for malfunctions of A.I. is still unsolved in German law. The lack of liability provision will trigger need for a legal reform. Essential questions that have to be solved soon are for example: Who will be liable for robots? Will intelligent machines be able to conclude valid contracts and under which requirements, e.g. in the Internet of Things (IoT)?
Based on its general technology neutrality, the Swiss regulatory framework allows for ample regulatory latitude and room for development for technology driven business models and companies, including compared with other jurisdictions. Specific areas of presumed legal development includes the legal classification of virtual currencies as digital objects and the evidentiary value of confirmations provided for digitised assets and the transfer thereof by means of distributed ledger technology (public faith in blockchain entries).
From our point of view, the development of artificial intelligence will undoubtedly be the technological development that will create the most legal change in the Ecuadorian legislation, since it have implications on the treatment of labor law, commercial relationships, civil and tort law, intellectual property. Above all, it will be necessary to determine up to what point can determined tasks be performed through artificial intelligence developments, and its responsibility before users, employers and third parties.