Eagle Alpha Legal Wrap

Eagle Alpha rounds up some of the most relevant legal and compliance articles surrounding the alternative  data space  over the past month.

Senators introduced a bipartisan bill designed to address security threats from foreign tech and apps. One potential implication could result in banning apps such as TikTok. The Restrict Act — an acronym for “Restricting the Emergence of Security Threats that Risk Information and Communications Technology” would give the commerce secretary the power to identify threats and block foreign technology. You can access the full article here.

Democratic senators put forward a new bill that will ban the sale of personally identifiable information (relating to location and health). The lawmakers said: “By stopping the use of personal health information for commercial advertising and banning the sale of location data, this legislation will put new protections in place to safeguard Americans’ privacy while giving consumers greater say over how their sensitive health data is shared online.” You can access the full article here.

The SEC warned asset managers on the use of predictive data analytics and how they work with digital-asset firms. “I believe this may lead to conflicts relating to how they use predictive data analytics and individually tailored investment engagement,” SEC Chair Gary Gensler had stated. “Thus, I’ve asked the staff to recommend how we might potentially address these inherent conflicts through rulemaking or otherwise.” You can access the full article here.

The House Committee on Energy and Commerce’s new subcommittee on Innovation, Data, and Commerce hosted the latest congressional hearing to discuss the proposed federal privacy law. Lawmakers endorsed the proposed ADPPA as the preferred solution to address regulatory shortcomings. You can access the full article here.

The FTC issued an order to ban an online counseling service BetterHelp from sharing users’ health data for advertising purposes. BetterHelp will also be required to compensate customers with $7.8 million to resolve allegations that it shared sensitive information with third-party platforms like Facebook and Snapchat. You can access the full article here.

The FTC introduced a Mobile Health App Interactive Tool to assist app developers in in identifying federal regulations, privacy laws, and security requirements that may pertain to consumers' health data, including data related to treatment, diagnosis, wellness, fitness, or addiction. You can access the full article here.

Europe

European lawmakers urged the European Commission not to adopt the proposed EU-US Data Privacy Framework arguing that it “fails to create actual equivalence” with the level of protection enjoyed in the EU. A full vote is expected in the coming months. You can access the full article here.

The European Parliament and the European Council announced a plan to create standards for proposed European Green Bonds. Issuers aiming to obtain the designation will be required to follow strict transparency criteria with funded projects to be aligned with the EU taxonomy. You can access the full article here.

The rise of ChatGPT is forcing European lawmakers to upend their plans to regulate AI as the original plans are no longer deemed sufficient. It is currently being debated whether AI systems producing complex texts without human oversight constitute a “high risk” with stricter requirements for developers and users of ChatGPT also expected in the near future. You can access the full article here.

France’s regulator AMF proposed to tighten rules on ESG funds to avoid greenwashing. The regulator noted that the SFDR’s classification of funds into Articles 8 and 9 “may be misinterpreted by savers as a guarantee that they are participating in the financing of a more sustainable European economy.” You can access the full article here.

WhatsApp has agreed to be more transparent regarding changes to its terms of service, following discussions with EU consumer protection authorities and the European Commission. The company has committed to making it easier for users to decline updates if they don’t agree with them. You can access the full article here.

The UK government is set to introduce new data protection reform proposals, which would replace the existing Data Protection and Digital Information Bill currently under parliamentary consideration. The UK GDPR is to be replaced with the question of priority to be addressed. You can access the full article here.

YouTube is being accused of breaching a UK data privacy code when collecting the viewing data of children under 13. Campaigner Duncan McCann argued that the company should stop collecting unnecessary information and only process the data of adults who opt-in. You can access the full article here.

China

China’s cyberspace regulator issued a standard contract for organizations intending to transfer personal and users’ data abroad. Organizations will be required to sign this contract with their local internet regulators from June 1st onwards. You can access the full article here.

China is planning to create a new regulator that will oversee data governance to simplify the country's regulatory framework. The proposed national data bureau is expected to become the primary regulatory body for various data-related issues, replacing the current system in which several ministries share the responsibility for data oversight. You can access the full article here.