The US cryptocurrency company Paxos was ordered by the New York department of financial services (NYDFS) to stop the issuance of the BUSD stablecoin.
This action comes after Paxox received a notice from the US Security and Exchange Commission (SEC) that BUSD stablecoin is a financial security and that Paxos needs to register with the Commission. Stablecoins are cryptocurrencies that are pegged to the US dollar or other national currency. The regulatory battle around the stablecoins will continue as Paxos complained to the decision from the SEC. Meanwhile, all deposits of the BUSD will be halted. BUSD is a stablecoin used on a cryptocurrency exchange Binance as a stablecoin pegged to the US dollar. The Binance online exchange is the world’s second largest cryptocurrency exchange based. Binance announced that this will not affect their business.
Stablecoin regulation will be on the agenda of the G20 Finance Ministers meeting on February 24-25 in India. Regulation around this issue might need an overarching regulatory approach.
On 27 January 2023, the Australian Competition and Consumer Commission (ACCC) started a search to identify misleading testimonials and endorsements by social media influencers. The action is in response to ‘community concern about the ever-increasing number of manipulative techniques on social media, designed to exploit or pressure consumers into purchasing goods or services’.
With the overall goal of identifying deceptive marketing practices across the digital economy, the ACCC plans to analyse influencer marketing practices across several social media platforms such as Instagram, TikTok, Snapchat, YouTube, Facebook, and Twitch. The authority is also looking at the role that other parties such as advertisers, marketers, brands, and social media platforms may have in facilitating misconduct.
Google has committed to introducing changes to better inform consumers about their purchases via Google Store, Google Play Store, Google Hotels, and Google Flights, as a way to comply with relevant consumer protection rules in the EU. The commitment results from a joint action by European regulators, led by the Nederlands Authority for Consumer & Market and the Belgian Competition Authority.
The policy changes that Google has committed to include:
• more precise information on final prices on Google Hotels and Google Flights;
• limitation of Google’s right to unilaterally cancel orders or change prices in the Google Store;
• more accessible report for regulators regarding illegal content;
• make it easier to consumers to find out information about sellers in Google Store and Google Play Store;
• feature the option to make purchases using all EU payment methods in Google Store;
• improve the application of geo-blocking rules enabling consumers to download their apps anywhere in the EU.
The Consumer Protection Cooperation Network (CPC) will monitor the implementation of these adjustments and commitments, while the EU national authorities will track and enforce compliance where concerns remain.
The US Department of Justice (DoJ) and eight US states filed a lawsuit against Google, accusing it of illegally abusing its dominance over internet advertising business and limiting fair competition.
The lawsuit by DoJ alleges that Google used anti-competitive methods to eliminate or drastically reduce any threat to its dominance over the technologies used for digital advertising. Allegedly, Google has undertaken a systematic campaign to take control of a wide range of high-tech tools used by publishers, advertisers and brokers to facilitate digital advertising and manipulate the mechanics of online ad auctions to force advertisers and publishers to use its tools.
The suit, filed in the state of Virginia, asked the US District Court to force Google to sell its suite of ad technology products, including software for buying and selling ads, a marketplace for completing transactions and an online ad-serving service. The lawsuit also asked the court to stop the company from allegedly engaging in anti-competitive practices.
The European Parliament adopted a report on consumer protection in online video games, calling for better protection of gamers from addiction and manipulative practices. The report notes the need for harmonised rules that would give parents an overview of and control over the games played by their children. It also highlights the importance of clearer information on the content, in-game purchase policies, and target age group of games.
In the view of the European Parliament, online video games should prioritise data protection, gender balance, and the safety of players and should not discriminate against people with disabilities. Moreover, cancelling game subscriptions must be as easy as subscribing to them. The purchase, return, and refund policies must comply with EU rules.
The World Economic Forum and the Council on the Connected World published the State of the Connected World 2023 report exploring governance gaps related to the internet of things (IoT). The report outlines the findings of a survey conducted with 271 experts worldwide to understand the state of IoT affairs. The COVID-19 pandemic has increased IoT demand in health, manufacturing, and consumer IoT. However, there is a lack of confidence when it comes to matters such as privacy and security.
Two main governance gaps are identified: (1) a lack of governmental regulation and implementation of industry standards and (2) IoT users are more susceptible to cyber threats and cyberattacks.
One recommendation is for businesses and governments to develop and implement practices to improve privacy and security and create a more inclusive and accessible IoT ecosystem. The need to improve equal access to technology and its benefits is also underscored.
The German Federal Cartel Office, Bundeskartellamt, issued a statement of objections against Google’s data processing terms, declaring that it plans to oblige the company to change the choices offered to consumers regarding data processing.
The Bundeskartellamt’s preliminary conclusions of its administrative proceeding against Google state that users of Google services ‘are not given sufficient choice as to whether and to what extent they agree to [a] far-reaching processing of data. The choices offered so far, if any, are, in particular, not sufficiently transparent and too general.’ The office argues that users should be able to limit the processing of data to the specific service used and to differentiate between the purposes for which the data are processed. In addition, the choices offered must not be devised in a way that makes it easier for users to consent to the processing of data across services than not to consent to this.
Following the issuance of the statement of objections, Google has the opportunity to comment on the office’s preliminary assessment and present either reasons to justify its practices or suggestions to dispel the concerns. A final decision on the administrative proceeding is awaited in 2023.
On 10 January 2023, the Federal Trade Commission (FTC) published an order against the online alcohol marketplace Drizly and its CEO for security failures that resulted in a breach of personal information of around 2.5m consumers.
The critical requirements of FTC’s order are, among other things:
• destruction of any personal data collected that is not necessary for Drizly to provide products or services to consumers;
• refraining from collecting and storing personal information if it is not needed;
• publicising on its website the information Drizly collects and why such data is necessary;
• implementing an information security program and establishing security safeguards.
The US Federal Trade Commission and the creator of Fortnite, Epic Games, have reached a settlement which would see the company pay a total of US$ 520 million in penalties over allegations that it had violated the Children’s Online Privacy Protection Act and used dark patterns to trick players into making unintentional purchases.
For allegations related to collecting personal information from Fortnite players under the age of 13 without getting consent from their parents or caregivers, Epic has agreed to pay a US$ 275 million penalty. Furthermore, the FTC determined that Epic’s default settings for its live text and voice communication features, as well as its system of pairing children with adults/strangers to play Fortnite with, exposed youngsters to harassment and abuse. Epic is also required to adopt strong privacy default settings for children and teens, ensuring that voice and text communications are turned off by default.
In a second case, the business conceded to pay US$ 245 million to refund users for its dark patterns and billing practices.
On 7 December 2022, the Federal Court of Australia penalised Uber with AUD$21m after the platform admitted it had breached the Australian Consumer Law regarding misleading conduct, cancellation messages, and the price of Uber taxi rides.
Cancellation messages between December 2017 and September 2021 stated that users might be charged a cancellation fee even if users decided to cancel during Uber’s ‘free cancellation period’. Uber also admitted that between July 2018 and August 2020, the prices of Uber taxi rides displayed on the app and website were false and overstated.
The Federal Court Order prohibited Uber from making similar representations to consumers for the following three years, required publishing a corrective notice on its website, as well as contributing to the payment of the Australian Competition and Consumer Commission costs.
