Coding the Rules: The Impact of Technology on Regulatory Frameworks
The world’s largest tech companies are facing a series of new regulatory rules from the European Union. The EU famously introduced General Data Protection Regulation (GDPR) rules in 2016 to give Internet users more power over their data.
Now, the EU is introducing tougher data protection that could affect tech giants, from Apple and Microsoft to Google and TikTok. The EU isn’t alone in regulating tech businesses.
Throughout the world, regulators are tabling rules to regulate businesses using technology. Below is an overview of top tech sectors affected by new regulatory frameworks.
The Impact of Technology on Regulatory Frameworks
Digital Payments
Today’s online companies all support a way to transact digitally. Some offer card support to Visa, MasterCard, Discover and American Express users. Others accept mobile wallets like PayPal and Apple Pay. Many companies also work with Bitcoin, electronic checks and bank transfers.
Digital payments mean there’s less demand for paper cash and more transactions taking place through mobile devices. Where money is involved, governments take an active role in protecting consumers.
In many countries, digital banking companies face countless regulatory measures that affect how they handle customers’ data and money. Not only are financial companies required to protect user data but they must also insure users’ money and keep it in safe bank accounts.
The result is that online banking has become safe and reliable. You can buy virtually anything in the world and pay for it using digital money. Regulations make it possible to transact online fast without paying hefty fees.
Online Shopping
Before e-commerce went global, regulators were mainly concerned with pricing and product quality. Now, they also must protect consumers from data abuse, financial fraud and unfair competition.
By law, every online shopping website must secure user data through encryption. It also needs to avail its privacy policy publicly and give its customers a way to protect their data through password protection.
To reduce online scams, retail stores must apply for licensing from state or federal governments. They have to comply with tax regulations and reveal important information about their products to the public.
Without regulation, companies could sell products without revealing side effects or nutritional values. They could hide some fees or sell your data to the highest bidders. However, regulations ensure retail stores meet high standards of security and transparency.
Digital Entertainment
Digital entertainment in the form of music, movies, online games and social media has been around for decades. But it has never been as prevalent as it is today.
People all over the world spend multiple hours a day staring at their mobile devices. That’s good news for investors in the entertainment sector. However, regulators are making it clear that entertainment companies have to take responsibility for protecting consumers.
Most countries have advertising restrictions, which prevent entertainment companies from advertising inappropriate messages to minors. Also, they have laws about data protection, political messages and character defamation.
In the online gambling space, casinos and sportsbooks face a myriad of regulations, starting from data protection to problem gambling tools. In the UK, constant government involvement has led to a rise in demand for betting sites not on gamstop. Most of these companies are located offshore and have fewer restrictions than their UK counterparts.
Artificial Intelligence and Machine Learning
AI and ML companies are gaining traction rapidly. Last year, ChatGPT recorded tremendous growth within months of existence. Google responded by creating a worthy competitor.
Since then, AI-powered products have been disrupting the tech world, left right and centre. Regulators are stepping in to regulate Artificial Intelligence companies for a good reason—they can be misused.
AI and ML regulations will have far-reaching effects on the industry. That’s because they touch on just about everything AI does, from data collection and content creation to robots and driverless cars.
In the usual style, the European Union has already taken measures to regulate Artificial Intelligence Companies. The EU AI Act was introduced late last year and aims to promote a better environment for creating AI products.
To expound further, the EU wants to ensure AI companies in Europe are creating safe, transparent and fair products. It has subdivided its AI to define the types of risks AI companies must avoid, generative AI rules and other rules.
Telecommunications
If you’re like most people, you hate robot calls. They make you get excited to take a phone call only to annoy you with their unwarranted spam messages. Regulators are creating rules to clamp down on unwanted robot calls.
One of the rules is to have telecommunication companies authenticate all calls with a caller ID. This will reduce the number of spam robot calls now that you can easily identify and block robot call numbers.
Similar to most tech companies, telecommunication operators face a slew of new rules meant to govern data collection and usage. Not only will your cell phone provider need to protect your privacy, but it will also have to limit the amount of data it collects from you.
Healthcare Companies
Medical companies have always faced tough restrictions. Now, regulators are adding more rules to ensure healthcare companies handle user data with utmost privacy.
Some rules, like data privacy, have always been in effect. Some of the new regulations include transparency in payments reporting on data breaches. Medical device manufacturers will also need to monitor vulnerabilities in devices and keep updates about security threats.
As the medical sector evolves, so will regulations surrounding it. Remote healthcare is growing quickly. This will mean the government will need to introduce better laws designed to eliminate quacks and protect consumers from malpractices.
Cloud Computing
More and more companies are replacing data rooms with cloud storage. Cloud computing is cheaper, more convenient and better for small and large companies. It is also secure and mobile.
However, cloud computing involves storing and rendering large volumes of people’s data. Most of the large tech companies use cloud storage to store clients’ data.
Regulators want these companies to invest heavily in data protection. Cloud storage providers can’t afford to leak user’s data due to negligence and weak security systems.
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