As the last year was deeply marked by the COVID-19 health crisis, it also provided an economic boost to many in the TMT sector and impacted all sectors and industries globally. Yet, the sector has simultaneously found itself at the center of disruptive global trade-wars faced with growing protectionist trade policies. The geopolitics impact with technological innovation amid increasingly tech-intensive economies has led to trade wars essentially becoming tech wars. Governments have wielded a full parade of tools from sanctions to export controls, from import restrictions to tariffs, from procurement bans to foreign investment controls, targeting key industry players in the name of national security and in pursuit of digital sovereignty. The concerns underlying these measures are so deeply rooted and broadly held that we are unlikely to see a change at the macro level, certainly in the near term. While companies have become more adept at responding and adapting to disruptions in the technology supply chain, the challenge will be how to better anticipate and influence the regulatory map for the coming years to minimize the risk of a fragmented approach that would be detrimental to providers and users alike.
The technology, media and telecommunications (TMT) sector was the rocketing uptake of digital services and technologies and was a positive side-effect of the pandemic in areas like online communication and videoconferencing technologies, streaming services and online shopping. However, there was a heavy impact on the suppliers’ ability to deliver projects (due to illnesses, travel restrictions and work-from-home obligations) as well as to develop new products (due to supply chain issues). Meanwhile, the legal evolution in the TMT sector was persistent at a swift pace.
In 2021, cybersecurity was high on everyone’s agenda. There were also discussions about a “cybercrime pandemic”. Against this, there were three legislative proposals discussed by the EU which were published before the start of the year – the NIS 2 Directive, the Directive on the resilience of critical entities and the Regulation on the digital operational resilience for the financial sector.
The publication of a draft ‘Artificial Intelligence Act’ (AI) was another immense and much-anticipated development. AI remains an increasing trend as it is expected that by 2025 the extent where the AI market will reach will be USD191 billion and will continue to challenge the existing legal frameworks along with the traditional thinking paths. Through it all, technology influences law, and law influences technology.
For any individual not within the sector – and even for those who are – it is difficult to remain informed on the latest major developments in both technological as well as legal. For instance, the result of Mark Zuckerberg’s announcement that he wishes to transform Facebook from a social media network into a “metaverse company” in the subsequent five years, the metaverse has become a rapidly searing subject in the sector.
The UAE endures growing its TMT competencies across the private and the public sectors. TMT businesses demands industry knowledge and experience. Through the emergence of free zone hubs and special economic zones in Abu Dhabi, Dubai and other Emirates, the UAE has developed into a regional centre for many businesses that focusses on technology, media and telecommunications (TMT). It has continued to be a hub for innovation, leading the region in these industries. Through a local and international presence, it is continuously informed on the technological developments on an international scale. The digital explosion in the recent years has had a massive impact on the industries and the businesses around the world. It is becoming increasingly important for companies to stay relevant and informed on all touchpoints with technology developing at rapid speeds. The telecommunications and media industries have had to redefine the means in which they operate, while simultaneously innovating consistently to keep ahead of the pace. The gamechangers in the commerce world have been blockchain, G5 and other technology platforms.
The intellectual property rights, joint venture disputes, licensing, information technology implementation programs, competition, merger and acquisition agreements, non-disclosure agreements, data-related issues, outsourcing programs, and reputation management issues are the most common TMT disputes. The main telecoms regulator in the UAE is the Telecommunications Regulatory Authority (“TRA”) which was created pursuant to the UAE Telecoms Law. Also, the Telecommunications and Digital Government Regulatory Authority (TDRA) regulates all forms of telecommunications, manages and allocates spectrum, regulates all content that is carried over its infrastructure, and manages the two key telecommunications licensees (Etisalat and du) among its many tasks. Furthermore, the Media Regulatory Office has partially replaced the old National Media Council (NMC), and are still waiting to see which parts of the powers designated to the NMC under Federal Law No. 11 of 2016 on the Regulation and Powers of National Media Council are to be transferred across to the Media Regulatory Office.
Likewise MENA arbitration centres have constantly received an increase in TMT disputed contracts over the past few years. As an example, the Cairo Regional Centre for International Commercial Arbitration experienced a 75% annual increase with 91 new arbitration cases filed in 2016. Out of the 91 arbitration cases filed, 11% involved media and entertainment, 3% related to telecommunications and 1% related to IPRs.
The most used institutions for TMT disputes in the UAE are the International Chamber of Commerce (ICC), World Intellectual Property Organization (WIPO), London Court of International Arbitration (LCIA) and Singapore International Arbitration Centre (SIAC). Other well-known arbitration institutions in the MENA region includes Dubai International Arbitration Centre (DIAC), Dubai International Financial Centre – London Court of International Arbitration (DIFC-LCIA), Lebanese Arbitration and Conciliation Centre (LAMC) and the Cairo Regional Centre for International Commercial Arbitration (CRCICA). However, 67% of the Participants operating in the MENA region chose the ICC as the most-frequently used institution. The MENA arbitration institutions ought to reflect on the cause why the ICC, an international arbitration centre is ranked as used the most frequently in MENA instead of the regional well-known institutions.
The growth of the TMT sector in the recent years has been remarkable. The TMT disputes are naturally expected to increase following such growth. The UAE, as a dispute resolution jurisdiction, its arbitration centres and its UAE-based practitioners should reflect on and draw some lessons in order to be prepared to accommodate the likely rise in TMT disputes. It is significant for all such stakeholders to consider the views of the participants to attract the TMT disputes in the UAE.
The following legislations are of note in the UAE for TMT
There is nothing that leads to believe that the coming years will be less digital. The UAE has expressed its opportunities for the future and declared its priorities in this subject. Evidence of the trend toward digitalization and the digital lifestyle is everywhere in the UAE; from the level of penetration of smart phones, Internet, and social media networks, to the robust ICT infrastructure and government policies that support digital transformation. The translation of digital transformation into economic development is going to be the biggest challenge in the coming phase for the ‘Digital sprinters’, UAE included. If the countries globally achieve success in this challenge, then they have created a historic gain from the digital transformation that is represented in the collective additional economic growth of $3.4 trillion.
Looking at the next phase is to regulate and redirect the compass rather than raising the level of digital transformation and working to achieve it at a faster rate according to the report. The main criterion and the key performance indicator for all plans for the transition towards a digital government, a digital society and a digital economy is achieving economic growth. The conclusion of this deserves a pause for reflection and discussion at all levels. The key law in the telecommunications sector in the UAE still remains the Federal Law No. 3 of 2003 which is regarding the Organization of Telecommunications Sector, (amended as Telecoms Law). This extensive law covers all the aspects of telecommunications services from licensing through spectrum management to marketing.
The Federal Law No. 15 of 1980 concerning Printing and Publishing (PPL) is controlled by the media industry. The PPL remains the predominant law, with the regulators confirming its application across new media. Outside of establishing the rules applicable to those wishing to run a printing press or secure a free-to-air broadcast license, the Law also sets out the basic tenets of content regulation: Section 7 sets out the restrictions that apply to media content.
The TDRA’s internet access management policy (IAM), which sets out the basis upon which the TDRA can block a website is the addition augmenting the PPL (i.e., a list of 17 categories of content that are not permitted to be transmitted over the TDRA network which contains pornography, the promotion of terrorism and criticisms of religion and that will be blocked). The TDRA blocks such content via permits received by the IAM. The UAE residents are aware of the ‘surf safely’ message which appears when blocked content are accessed.
The NMC passed further content laws under the National Media Council Chairman via Resolution No. 20 of 2010 on the Standards of Media Content and Chairman of the Council Resolution No. 35 of 2012 on the Criteria of Advertisement Content in Media in 2010 and 2012. The position of these remains uncertain, as they have been largely superseded by the 2017 resolutions, the most important of which in the content industry are Cabinet Resolution No. 23 of 2017 Concerning Media Content and the related Board Resolution No. 26 of 2017 on Media Content. The latter is extremely prescriptive relating to content regulations and standards and has expanded on the description of prohibited content to enable easier compliance by content producers. Despite being replaced, the NMC regulations remain in force
A vital associated law is the Federal Decree by Law No. 5 of 2012 on Combating Cyber Crimes (CCL), which is well renowned as for the severity of its penalties as the content of the Law itself. The fines thereunder were increased for various offences late in 2018, which reflected the UAE’s concern about the material that is related to terrorism or otherwise dangerous to its residents. Such incendiary material aside, the CCL also covers areas which are more content-focused issues such as privacy, defamation, pornography, and gambling.
The TRDA also provides licenses for the provision of public telecommunications services. The following are the services that fall into the telecommunication services:
Since the operation of a public telecommunications network or provision of telecommunications services are regulated activities, there is a resolution namely Resolution No. 6/2008 regarding the Licensing Framework that requires a license from the TRDA. The process for obtaining a license varies from category to category.
The rise of social media across the past few decades has had a substantial effect on the way that brands interact with consumers. Not only is social media now taking a large percentage of global advertising budgets it is also providing an efficient way for brands to communicate directly on a B2C level. With the rise of social media, the introduction of a new type of brand ambassador – the social media influencer was met. All of this arose under the umbrella of media and advertising laws that were not designed always to deal with the way the new media is operated. Governments worldwide are reacting consequently, and brands need to stay agile and keep up to date with new rules and regulations on a consistent basis.
In the UAE Penal Code, the core right to privacy and confidentiality of information and trade secrets is codified. The Cyber Crime Law was passed in 2012 in order to keep up with new means of technology and subsequently was amended in 2016 to cover all types of cybercrime that may occur in the UAE. The National Cybersecurity Strategy was launched in June 2019 as the TRA views cybersecurity as a crucial element in providing a robust and efficient telecommunication infrastructure. The aim of the National Cybersecurity Strategy is to ensure that the country is prepared in the event of a cyberattack at a regulatory and policy level as well as at a commercial and individual level. The right to privacy is an important element of an individual’s right in the UAE and is enshrined in the UAE Constitution. The Cyber Crime Law lay clear penalties in the event where a communication is accessed or obtained by an individual unlawfully.
It is set by the Consumer Protection Regulation (CPR) that telecom providers are obligated to take all the reasonable measures that may be required to protect the privacy of the consumers and must ensure the safety of any information regarding their consumers that are stored on their servers. They are also obligated, through the CPR, to use service providers that abide by the same standards that are issued by the TRA and are held responsible for any unlawful usage of consumer data that is obtained by third-party suppliers.
Privacy and security of company information is critical, particularly when you consider the sensitive information employees have access to and submit over wireless and wired networks like passwords, email addresses, personal information, phone numbers, residential addresses, proprietary information, financial data, communication about customers and employees.
Children’s privacy protection laws exist in every region and are typically actively enforced given the widely shared goal of shielding children from unsafe content and situations. Video game companies often have to make strategic decisions about whether to let children play their games, and then comply with all applicable children’s privacy requirements, or use technical measures to block children from playing, and accordingly limit the universal appeal of their games. These decisions are made more complicated by the fact that different jurisdictions define children’s age thresholds differently and the online nature of many games makes it possible for children anywhere to play. Advertising through mobile games has been commonplace for some time, but now even console games that require an Internet connection are beginning to embrace dynamic digital advertising. We expect this trend to increase as more consumers spend more of their leisure time playing games than perhaps watching TV. At the same time, data protection laws and regulators are paying close attention to the privacy issues surrounding the digital advertising industry, with new laws being regulated and govern the use of profiling and other cross-context behavioral advertising techniques as well as cookies. In Europe, there has been a spotlight on adtech practices for some time now with different regulators taking a close look at the adtech industry’s data monetization practices and making it clear that they expect the industry to step up their data privacy efforts.
Privacy laws around the world are giving data subjects new or expanded rights, with recent or upcoming developments in China, India, Brazil and Canada, to name a few. Video game companies should expect to receive higher volumes of data subject requests, including requests for access to copies of their personal information and data to be forgotten. Video game companies must navigate the sometimes inconsistent goals of comprehensively responding to requests while not disclosing information about how their internal algorithms and anti-cheating measures work so as to preserve the integrity and security of their games.
While the ever-shifting global landscape of privacy laws can be daunting for any video game business, there are tremendous incentives to getting privacy compliance right. Implementing a holistic compliance program that demonstrates to gamers that their personal information will be handled responsibly and securely will earn and keep their trust. Better resourced regulators, ever more vigilant consumers and the public at large increasingly expect business to handle personal data in a trustworthy and transparent manner, and this trend is set to intensify.
Digital sovereignty concerns will continue to affect the TMT supply chain. We have seen a tendency towards countries implementing restrictions to preserve the integrity of critical supply chains including in the critical infrastructure, telecommunications/5G, digital economy, bulk power supply, and critical mineral sectors, amongst others. A prime example is the US Clean Network Program, a bipartisan effort designed to combat the “long-term threat to data privacy, security, human rights and principled collaboration posed to the free world from authoritarian malign actors”. These measures are designed to curb the use of certain foreign technologies in domestic critical supply chains, both public and private, and even block access to procurement opportunities for suppliers that choose to use targeted foreign technologies and equipment for their own internal business use. Companies will need to map their end-to-end supply chains to understand what parties and inputs are involved and may need to make hard choices to preserve certain business at the expense of other supplier relationships. Foreign direct investment constraints national security concerns over intense reliance on key technologies and data, which will continue to drive a tightened foreign investment review regimes even in countries with traditionally more open investment environments. Recent scrutiny of foreign investments in traditionally lower risk sectors, such as social media, dating apps and so forth demonstrate the reach of these concerns. Companies should expect scrutiny over broader types of cross-border transactions beyond typical M&A, such as fund investments and financings, and should plan and prepare for conditions and demands for commitments, including potentially restructuring of deals and foregoing of governance rights.
Recent years have seen growing policy concerns over the misuse of technologies in support of the expansion of civil/military fusion programs, electoral interference, cybercrime, cyber surveillance, censorship, human rights violations. Yet many of the technologies so used are commonplace and can be utilized for good aims and for ethical purposes. To tackle misuse, governments are deploying end-user and end-use based restrictions to curtail the transfer of even basic technologies to particular targeted “bad” end-users or end-uses. Examples include black-listings by the US, EU and other governments of certain individuals, entities, and even cryptocurrency addresses involved in such activities, as well as stricter controls on exports to military end-users and military end-uses. These measures have a proven quick and chilling effect on cutting the targets off from access to key technologies, financing and markets as they are often accompanied by the zero-risk tolerance approach of banks, lenders and insurers towards being seen as supporting such activities, even if otherwise lawful. Mitigating these compliance risks is a challenge, particularly for end-use screening which cannot readily be automated; companies will need to take a more holistic, cross-functional and connected approach to their transactional compliance screening. Export controls have long been a tool to protect a country’s technological “crown jewels” and this is particularly so now as the US, EU, China and other countries take steps to limit outbound transfers of critical emerging and foundational technologies to prevent a dilution of their digital sovereignty.
The PPL and the Penal Code has been the text of law for a long period of time to ascertain permits for audio-visual media content. At the front, the NMC Law has established the NMC as the sole regulator of audio-visual media in the UAE. The NMC has enacted regulations on a day to day basis to improve and refine the active regulations in the country.
Most recently, the Media Content Regulation and the Economic Substance Regulation (ESR) has provided a clear distinction with regards to the usage of media content providing a clear platform to protect IPR (Intellectual Property Rights) in printed and digital formats. The audio-visual media in the UAE are regulated by the National Media Council.
The TRA regulates and is responsible for content available on any webpages or websites. Simultaneously, the telecom providers have been imposed a requirement to filter and restrict the content that passes through their network . They are also responsible to restrict access while reporting all instances of any unlawful content to the TRA.
Content is deemed unlawful if it violates public policy and values as is imposed under the UAE law. A non-exhaustive list as to what is considered blocked content is provided by the TRA which adheres to not only morally and commercially illegal activities but also to activities that are considered against the benefit of the State.
The TRA has also imposed restrictions on the usage of Proxy servers and VPNs which allow access to prohibited content. It has clarified that VPNs are only permissible where their use is not to access blocked and unsecured content.
With the UK now preparing to leave the EU, the UK’s future relationship with the EU will have a particular impact on telecoms and media businesses, not least because these industries are subject to sector-specific EU regulation. In addition, technology and data businesses are exposed to a number of more general legal issues raised by Brexit, including in relation to data protection, cyber security and intellectual property.
The technology, media and telecoms (TMT) sector endures to prosper in the Middle East. It has also expressed its opportunities for the future and declared its priorities towards implementing more laws to protect the residents and help countries globally in achieving the same. A new federal law regulating the media, publications and online content was introduced in the UAE this year, as reported by the Federal National Council (FNC). These laws will be introduced to keep pace with the growing technological changes which will be to safeguard the privacy and data protection of its residents. It has also undertaken various steps and implemented laws to keep pace globally by growing competencies in TMT across its private and public sectors. If you need any legal assistance you can reach out to the TMT lawyers in UAE.