The week’s news included; Controversial Online Safety Bill comes into law, US states sue Meta for causing teen mental health crisis, Music publishers sue AI firm Anthropic over copyright breaches.
Below are our top 10 stories that you need to know about. Be sure to check our twitter page, Facebook page and Instagram Page, for regular posts of important headlines. Get all the important stories and insights straight into your inbox by subscribing to our mailing list here.
Opinion articles of the week:
- City A.M. – There isn’t really a war on motorists, but maybe there should be
- BBC News – How does China fix the Evergrande mess?
- Sports Pro Media – Why the NBA is America’s most globally relevant sports property.
- City A.M. – A heavy-handed CMA is standing in the way of Britain being a leader in AI
- CNBC – What China’s slow-motion real estate crisis means for the global economy
1. ONLINE SAFETY BILL COMES INTO LAW
The controversial Online Safety Bill has now come into law. Tech firms now face more onerous rules in order to protect children’s safety online. A number of tech firms have however, warned that they may withdraw entirely from the UK, depending on its how the law is enforced. Under the new law, platforms will need greater controls to prevent and remove illegal content on their websites, such as child abuse, terrorism and self-harm promotion. The “cyber-flashing” and the sharing of “deepfake” pornography have been added as criminal offences.
One of the most controversial powers introduced by the law is the new ability for the government to force messaging apps to monitor encrypted messages. Apps such as WhatsApp and Signal have said they will pull out of the UK if such requests are made. Apps would need to break users’ encryption, a severe breach of privacy, in order to access users’ messages. Wikipedia has also said it would not adhere to certain measures as they stand and also threatened to pull out of the UK (see previous top 10). A code of conduct will be released by Ofcom to help firms comply with the new law. The first draft codes will be released on 9 November.
There are severe penalties for breaches of the new Online Safety law. Companies could face fines amounting to the higher of 10% of global revenue or £18 million. CEOs could also face prison for severe breaches.
2. FORD REACHES AUTO WORKERS DEAL
There is light at the end of the auto workers dispute. Ford has agreed a tentative agreement with the e United Auto Workers (UAW) union. This will see highest the paid workers receive a 25% pay rise to over $40 per hour. Starting wages will increase by a whopping 68% to $28 per hour. Automakers have been on strike for nearly six-weeks and the industrial action has cost car makers severely. The proposed deal still receives approval from UAW union leaders along with Ford’s 57,000 unionised workers. General Motors and Stenallitis, the owner of Chrysler, are still locked in the dispute with the union. Collectively, the three automakers have lost over $1 billion due to the strikes.
3. US STATES SUE META OVER MENTAL HEALTH CRISIS
33 US states are suing Meta for intentionally designing its platforms to get children addicted to its apps, causing a mental health crisis. Roughly 30% of American teenagers use social media “almost constantly”. Instagram and Facebook features are designed to maximise time spent on the app, fundamentally to boost Meta’s profits, according to the states. This alleged manipulation is causing “depression, anxiety and insomnia” among other mental health issues amongst young users of the app. Furthermore, they claim Meta breached the Children’s Online Privacy Protection Act by collecting children’s’ data without parental permission. The attorney generals of 33 states are suing jointly in California. Meta could face fines of between $1000 and $50000 for each individual violation of state laws. An additional 9 states are filing separate lawsuits in their respective states. Meta rejects the claims and highlights its offers 30 tools to support teenagers and families. The tech firm has said it will defend itself.
4. MUSIC PUBLISHERS SUE AI CHATBOT MAKER
Three music publishers have sued AI company Anthropic for using their copyrighted music lyrics with its AI chatbot without permission. Universal Music Publishing Group, Concord Music and ABKCO Music alleged that Anthropic’s Claude chatbot “unlawfully copies and disseminates vast amounts of copyrighted works”. They argue the algorithm ignores copyrights, collects lyrics and when asked by users to provide unique lyrics, simply rips off copyrighted songs. They also claim that the chatbot was trained on copyrighted material without permission. Around 500 songs owned by the three publishers are alleged to have been used by the chatbot. The trio are now seeking up to $150,000 per work infringed. This would cost Anthropic a whopping $75 million, not to mention other costs and additional damages sought by the publishers. The outcome of this case could shape the use of artistic works in AI chatbot training models.
Anthropic is a large player in the AI space. Worth a reported $5 billion, it recently received $4 billion in investment from Amazon as well as $300 million from Google. Music Business Worldwide looks closer at the case.
5. BANKERS BONUS CAP LIFTED
A cap on bankers’ bonuses has been scrapped by the government. The plans to remove the cap were announced last year by short-lived former Chancellor Kwasi Kwarteng in his 4 week tenure. This was one of his only policies that was not immediately reversed after his departure. From 31 October, bankers will face no cap on their bonuses. Caps were introduced in the wake of the 2008 financial crisis to curb excessive risk taking. Kwarteng pitched to remove the cap to make the UK’s sector more attractive for global top talent.
The cap also had “unintended consequences” according to the Financial Conduct Authority. With higher base salaries and lower bonuses, companies have less scope to punish poor performance. Many have criticised the government for taking this issue for a small number of high earners as a “priority” amid a cost of living crisis.
6. NATWEST REELS FROM FARAGE DISPUTE
Natwest has lowered its profit expectations amid admissions of failures regarding its scandal involving Nigel Farage. The bank closed Nigel Farage’s account at Coutts, reportedly for commercial reasons. He claimed that it was in fact closed due to his political views. Former CEO, Dame Alison Rose disclosed to a BBC journalist that it was closed as he failed to meet minimum the wealth threshold for a Coutts account. A report was later obtained that showed that his political connections, views and reputation were also considered. A scandal erupted and Alison Rose ultimately resigned. Last week, along with admitting failures in this scandal, it also posted profits of £1.3 billion for the quarter, lower than estimated. Natwest shares plummeted as much as 18% in response to the news.
This came as it was found that Dame Alison Rose breached data protection rules regarding her disclosure of Nigel Farage’s information. The UK Information Commissioner’s Office (ICO) announced this last week. Rose’s disclosure of reasons for the closure of Nigel Farage’s account to a BBC journalist. This constituted a breach of his data protection rights. The ICO said however, that it will not take any further action. This is because Rose has resigned and the bank completed its own investigation.
7. SOC GEN LOSES JURISDICTION ARGUMENT IN CLIFFORD CHANCE LAWSUIT
Societe Generale has lost its attempt to challenge the jurisdiction of its lawsuit against Magic circle firm Clifford Chance. The investment bank claimed the firm was negligent in the handling of its dispute. Societe Generale hired the firm in 2008 amid a dispute over the supply of gold to jewellery maker Goldas. The gold however, was allegedly used before payment had been made. Ultimately however, the court dismissed Societe Generale’s claim on the basis that they had waited too long to file the case in English courts. Societe Generale ended Clifford Chance’s retainer in 2017 and sued the law firm. It currently seeks €140m in damages.
Proceedings are also ongoing in English courts and the court considered whether it was the appropriate forum to hear this case. Societe Generale argued that the courts of France were more appropriate than English courts. The court however, ruled that because all events in question took place in English, Soc Gen’s large London presence and the fact that documentation was also largely in English, the UK court remained the appropriate forum for the case.
8. NO FAULT EVICTION BAN DELAYED
A ban on no fault evictions has been delayed indefinitely. The plans would prevent landlords from evicting tenants without a reason, also known as a Section 21 notice. The new rules were published in May under the Renters Reform Bill. Our previous top 10 explored the changes brought in under the bill. This was a pledge under the Conservative Party 2019 election manifesto. Last week however, the government said that the legal system needs reform before the bill can come into force. Legal mechanisms to reclaim homes need strengthening, for example. The government has not set a timetable for when these reforms will take place or when the bill is expected to come into force.
The government has been staunchly criticised for the move. No fault evictions often result in homelessness and are a source of instability for tenants. Furthermore, the nebulous prerequisite of “court reform” means that this proposal has been kicked into the long grass with no realistic prospect of being implemented, at least in the mid-term.
9. UK POLICE INCREASE SHOPLIFTING CRACKDOWN
Shoplifting will now be treated as severely as organised crime under new police initiatives. Project Pegasus will bring in analysts and officers to tackle shoplifting as thieves grow increasingly brazen. 13 Retailers including Co-op, John Lewis and Tesco will collectively contribute £800,000 to the project. The government will also contribute £30,000. Under the project, police will attend more crime scenes and use facial recognition technology to track more criminals. Violent thefts will be prioritised under the plans. A huge 365,164 shoplifting offences were reported in England and Wales in the year to June. See our previous top 10 which looks at the growing issue of shoplifting.
10. UK LIVING WAGE
The UK Living Wage is to be hiked 10% to £12 per hour. In London, the Living Wage will rise to £13.15 per hour. An estimated 500,000 workers whose employers are signed up to the voluntary real Living Wage will receive the increase. The increase is to reflect the rising cost of living. Around 60% of those earning below the real living wage had visited a food bank in the past year. 14000 UK employers pay the real living wage. The living wage was introduced in 2011 and attempts to reflect a wage that people can realistically live on. The National Minimum Wage is the legal minimum that employers can pay and that is currently £10.42 for workers over the age of 22.
