Trends In Information Technology Law: Looking Ahead To 2018

This piece looks ahead to what we might expect as IT law developments in 2018.

Unusually as we go into a new year, the main headlines of what IT lawyers can expect in 2018 are signposted at the outset: new financial services laws in January, the GDPR in May and looking ahead to Brexit in March 2019. But away from the headlines, the developing narrative is more complex. Here, the combination of [mobile+social+cloud] still carries all before it and the machine learning, blockchain and digital reality of the Fourth Industrial Revolution (4IR) are quickly gaining traction whilst Moore's Law still chugs away in the background.

What's also fairly clear as we go into 2018, and whether it's bitcoin, AI or tech valuations, is that we're currently at a rather 'frothy' part of the tech hype cycle. As the economist J. M. Keynes famously said, 'markets can stay irrational longer than you can stay solvent' so there's no telling that this will not continue through 2018. But it is worth calling to mind at the height of the dot com bubble when shares peaked in March 2000, that only 5% of the world's population had an internet connection (it passed 50% for the first time in 2017) and that no one had then foreseen the combination of [mobile+social+cloud] that five to ten years later would be the internet's 'world beater'. So, if we are towards top of a bubble now, there's precedent for thinking that we may not get it entirely right as we look out to say 2025.

Financial Services - MiFID and PSD2

Back to the present, and in January 2018, MiFID II (the Market in Financial Instruments Directive) and PSD2 (the Payment Services Directive) come into effect. MiFID II effectively takes the regulatory regime for equities trading price transparency introduced by MiFID in 2007 and extends it to trading in bonds, derivatives and most structured finance products. PSD2 takes the regulatory regime for payment services introduced by the PSD in 2009 and updates it for developments in e-commerce, the internet, mobile payments and new technologies and changing customer patterns. Both sets of rules are driven by, and in turn drive, technology change. MiFID II means rearchitecting business processes and data flows to fit the new regulatory environment and provides a great opportunity for RegTech. PSD2 provides a great opportunity for FinTech start ups. Changing financial services regulatory environments in these and other areas will continue to be an important source of work for IT lawyers in 2018.

Brexit

Despite the political progress made at the end of 2017, the shape of Brexit still looks hard to call. In a 2017 report for trade association Tech UK, 'The UK Digital Sectors After Brexit'[1] research consultancy Frontier Economics found that the UK's digital sector accounted for 16% of national income, 10% of UK employment and 24% of exports. Consequently, as so much digital business from the UK is in services not goods, the primary...