Commercial Awareness Update – W/C 28th June 2020

The round-up of the stories that a budding Student Lawyer should be aware of this week. Sign up here to get these updates in your inbox every week.

The Committee for Climate Change 2020 Progress Report

Article by Jamie Howarth (Second Year LLB at ULaw)

The Committee for Climate Change’s 2020 Progress Report, led by Lord Debden, boldly states that not enough is being done to support a green recovery. It is important to note that the Coronavirus has stunted most developments in this area during the last 12 months. However, with more societal pressure on businesses and government to perform, this is the time to stimulate an audacious environmental recovery.

The report makes suggestions to speed up the transition to low-carbon, particularly through investment and other economic stimuli being attached to climate goals. One of the main policy suggestions laid out in the report is that public money should not go toward sectors that are not contributing to the ‘net zero’ economic future of the UK. Similarly, the report states that Boris Johnson should take advantage of the fact that the COP26 has been delayed by becoming a global leader carbon pricing and environmental innovation. The government announcements regarding climate change over the last year have consisted of big claims and promises, yet the detail required to introduce such policy is not there. The report is critical of this, and of the fact that there always seems to be some other issue in the way of progress – Brexit, Coronavirus, etc.

The report calls for focus on certain areas over the next 12 months. This includes the decarbonisation of transport, electrifying heating systems, introducing further flexible grid balancing systems, and more. The report itself appears optimistic for the future, so it will be interesting to see the governments engagement with it over the next year.

Entry of Global Digital Tax in the Arena of Tech Giants

Article by Zyeraph Bucalan (Final Year LLB Law, University of Leicester)

Recent progress of technology companies remaining profitably strong and innovating through the coronavirus pandemic have proven the strength of digital businesses in times of crises. However, tech giants, such as Google, Facebook and Amazon, may face challenges in a new global tax framework.

Last year, the Organisation for Economic Co-operation and Development (OECD) proposed a change in the global corporate taxation of multinational technology companies based on two pillars. The first pillar suggested that countries would be allowed to have some rights to tax profits generated based on jurisdictional sales. The second is implementing a global minimum corporate tax rate, to discourage countries lowering corporate tax rates in an attempt to shift company headquarters to their jurisdiction.

International discussions between leading economies have thrown the OECD initiative into disarray. Earlier this month, the US withdrew from global negotiations and threatened to impose tariffs on countries continuing to implement unilateral digital taxes. US Treasury secretary, Steven Mnuchin, comments that the “United States remains opposed to digital services taxes and similar unilateral measures” and “if countries choose to collect or adopt such taxes, the United States will respond with appropriate commensurate measures.” This raises tensions of a possible trade war as individual countries pursue their own plans.

Nevertheless, in the EU continue to pursue its digital tax policy. In the UK, the Digital Services Tax (DST) was implemented in April introducing a new 2% tax on the revenues of search engines, social media services and online marketplace, making over £500m per annum globally. This policy also aims to raise £280m this financial year. Digital companies need to consider if they are subject to this tax, and for affected businesses this means greater compliance with new tax regulations.

For now the OECD remains firms in maintaining its schedule of talks between over 130 countries, members of the Inclusive Framework, to develop the global digital tax before the end of 2020.

We are yet to see how this may spiral into a digital trade war.

You can read more here and here.

What have your favourite corporations done for the BLM movement?

Article by Tamilore Olamiju (2nd year LLB with Business student at University of Essex)

Following the murder of George Floyd in Minneapolis in the US, many corporations all across the globe have shown their support through social media uploads, donations alongside internal and external changes in response to the Black Lives Matter movement, showcasing their stance in solidarity with Black people against police brutality and bringing light to the importance of protecting Black lives. This unfortunate occurrence has put a direct spotlight on the recurring issue of systematic racism and oppression.

Netflix, the widely used streaming service, who in fact remain in a league of their own, took to twitter voicing their support for the movement by stating that; “To be silent is to be complicit. Black lives matter. We have a platform, and we have a duty to our Black members, employees, creators and talent to speak up.”

The online clothing brand, Pretty Little Thing, have partnered up with rapper Saweetie, to donate all the proceeds from their recent collaboration to the BLM movement, soon after being accused of capitalising on black culture, but remaining silent on such a global issue. The fashion brand also dedicated a series of Instagram posts in seek of justice for those who have lost their lives to police brutality, including George Floyd, Ahmaud Arbery and Breonna Taylor.

Ben and Jerry’s ice-cream issued a powerful statement in support of the movement. With a blog post titled “Silence is NOT an Option”, the infamous ice-cream company set up a 4-step plan, detailing ways in which we can combat racism. A segment of the post was dedicated to the dismantling of white supremacy, where Ben and Jerry also explained four critical actions that they support, such as the call for the creation of “a national task force that would draft bipartisan legislation aimed at ending racial violence and increasing police accountability.”

EA Inc., one of the largest gaming companies in the world, made a million-dollar donation towards the improvement of racial equality, to the Equal Justice Initiative and the NAACP Legal Defence and Educational Fund. Further making claims to donate more to partners in the future. The company have also announced that they will be increasing their dialogue with Black employees, as well as improve their volunteer work.

Last but not least many fast-food companies supported the movement through a series of donations and social media posts that bring awareness to the cause. Just to name a few, McDonalds will be implementing opportunities for conversations around the issues of racial inequality in the coming months, inviting the general public to provide their own feedback, as well as that, the corporation plan on donating one million dollars to the NAACP and the National Urban League. Shake Shack took to twitter with a message of support of racial justice, further sharing a detailed list of anti-racist resources including articles and podcasts. Many other organisations have been vocal and made contributions to develop and support Black communities and businesses during these difficult times.

The domination of autonomous vehicles

Article by Beth Zheng (Law Student at Durham University)

The latest deal struck between Amazon and self-driving start-up Zoox has turned heads around the world as the acquisition, reportedly costing over $1.2billion, is Amazon’s biggest investment to date in the self-driving vehicle industry. Autonomous vehicle technology has been increasingly popular amongst companies such as Google, Apple and Tesla. Google first released their prototype of their driverless car in May 2014 and named the unit Waymo: ‘a new way forward in mobility’ whilst Apple have been widely reported to be developing an electric car project, codenamed ‘Titan’, recently acquiring software Drive.ai.

Autonomous vehicles are becoming more and more popular with companies over the world for a variety of reasons including greater environmental efficiency, lower fuel consumption and transport accessibility. For the likes of Lyft and Uber, self-driving cars have been used for cutting costs in an effort to increase profitability. Uber drivers take around 80% of a total per mile cost, therefore are the largest expense. However, Uber has come under great pressure following a devastating crash in 2018, killing a pedestrian who was pushing a bicycle across a road in Arizona, US. Following the fatal incident, Uber stopped testing their self-driving vehicles in 4 US cities and chose not to renew their licence in California. The National Transportation Safety Board, who investigated the crash, focused on the effects of human error, stating these errors would still be a problem for other companies.

Although autonomous vehicles have gradually become more popular with the likes of Tesla introducing their autopilot software in October 2015, there still remains an air of hesitation amongst consumers. In a 2018 report conducted by the Cox Automotive Evolution of Mobility Study, only 16% of respondents felt comfortable letting an autonomous vehicle drive without the option of taking back control whilst 57% would not buy a self-driving car even if they could afford to do so. These trends show that even though the technology is exciting and innovative, consumers are still wary of the dangers of autonomous driving technology, preferring to have individual control.

This new deal between Amazon and Zoox is therefore a positive boost to the industry, inevitably encouraging other companies to advance and develop their technologies faster. Amazon’s acquisition of Zoox aims to support Zoox through bringing the vision of autonomous ride-hailing to reality, with the current CEO, Aicha Evans, to continue leading the team as a business within Amazon. During the Covid-19 pandemic, as consumers flocked online to purchase goods as stores were closing down, Amazon experienced a boom in sales with revenue in the first three months of 2020 of $74.5billion. In a 2018 interview, Amazon CEO Jeff Bezos described his strategy with the company as fixating on the future, rather than the present. Therefore, this acquisition comes as no surprise as Amazon seeks to take a piece of the market to reflect consumer flexibility in the automotive industry.

It will be exciting to see how Amazon works with Zoox to become a competitive player in this highly innovative market. Amazon’s continuous success and domination during Covid-19 emphasises its ability to adapt and leave a significant impact on many people’s lives.

You can read more here, here and here

Facial Recognition turns out to be toxic

Article by Advaita Kapoor (3rd year B.A. LLB (Hons.) student at Hidayatullah National Law University, Raipur, India)

IBM has recently announced that they will no longer be offering, developing or researching general purpose facial recognition technology or analysis software.

What is the reason behind this?

Arvind Krishna, the CEO of IMB, remarked in a letter to Congress on 8th June 2020, in the pretext of recent movement on racial discrimination and anti-police brutality, that it is time to re-evaluate if and how facial recognition technology should be employed by domestic law enforcement agencies.

With the advances in artificial intelligence, facial recognition software has gained a hefty momentum in the last decade, however it still suffers from myriad problems such as racial and gender biases. A research by Joy Buolamwini and Timnit Gebru in 2018 had highlighted the existence of these disparities in AI based facial recognition software specifically analysing them in the context of IBM’s technology. There are various other studies that claim the use of discriminatory AI based facial recognition algorithms. In order to remedy the ever-prevalent bigotry and to combat systematised racism, this move was focused on propagating racial justice.

Will this move mark the end of facial recognition software?

Condemnation of this technology by IBM has garnered extensive support and appreciation from the public. Initiative by a big-tech company such as IBM will create discourse and can extensively influence other establishments to follow its footsteps. Amazon, along the same vein, recently announced a one-year moratorium of providing Rekognition (Amazon’s facial recognition technology) to police forces across the USA and called for reforms from the Congress to enforce stringent regulatory norms in this regard.

Although the big giants such as Google and Axon have also indicated a temporary ban on providing this technology, there still persists ambiguity whether this will obliterate facial recognition as there are numerous companies such as NEC and Idemia that continue to provide similar services to law enforcement agencies around the world.

You can read more here.