The Digital Economy in 2022 - Trends and Regulatory Developments Q&A

​​​​​​​​​Artificial Intelligence​​(AI)

​​​In terms of AI, are you looking at the EU draft AI Regulation for the entire EU or are there country specific strategies or policies?

There are currently no country specific rules and policies under the draft AI Regulation, as it is still going through the consultation process, however certain data protection, competition and financial services regulators have already issued their own AI guidance. The draft regulation is currently formulated to apply at a fairly generic level and may well change considerably before it is crystalised into law. However, in our view, the development of industry standards, and the systems and controls adopted by organisations are as important as the regulatory framework to demonstrate the ethical implementation of AI.

AI is currently changing the landscape of intellectual property. The current DABUS patent has created a worldwide debate towards patent ownership by AI systems. Are intellectual property laws adequate to regulate this new market?

Intellectual property laws are inadequate to regulate AI. Patent laws do not accommodate inventions by AI due to, for example, the requirement, in many jurisdictions, that an inventor can only be a human being and the test for patentability, which requires an inventive steps that is not obvious to a "person skilled in the art". The World Intellectual Property Organisation (WIPO) has been steering a "conversation" around how AI should be addressed going forward.

Content moderation and platform liability

What are the views with regards to the recent amendments to the Films and Publications Act and the registration of online content distributors with the Film and Publication Board – in particular, how wide the ambit of "content distributor" appears to be. Will it require all content distributors (even those who do not make money off content) to register and pay fees and how can this be enforced?

The Films and Publications Amendment Act (Amendment Act), which came into law on 1 March 2022, requires any person who distributes, broadcasts or exhibits any film or game in South Africa to register with the Film and Publication Board (FPB) as a distributor or exhibitor. The Amendment Act defines a distributor as a person who is in the business of distributing films, games and publications, and explicitly includes a "commercial online distributor" (being a person whose distribution of content is for commercial gain) in the definition. The exclusion of "non-commercial online distributors" (being a person distributing content over the internet for personal or private purposes) from the definition of a distributor means that ordinary persons sharing content online for private purposes will not need to register as a distributor or exhibitor with the FPB.

An Enforcement Committee will be established under the Amendment Act. One of the powers of the Enforcement Committee is to investigate non-compliance with the Act and where appropriate, impose a fine, suspend a certificate of registration or refer a matter to the National Director of Public Prosecutions for prosecution. The Enforcement Committee will use these powers to deal with persons that do not register with the FPB where they should have done so.

If a media company hosts websites, is it liable for user-generated comments on their pages?

There is no case law in South Africa on this issue. However, in 2021, the highest court in Australia (the High Court) decided that a media company that hosts comments, and benefits from those comments by giving their users an additional value add or attracting activity to their website, is a publisher and is liable for defamation. A media company could potentially raise the defence of innocent dissemination, which means that it would only be liable if it knew or had reason to know that the content being hosted by it is defamatory. It is likely that South African courts would reach the same conclusion as that of the Australian High Court, if (and more likely, when) this issue is decided by them.

ESG

What do you think of the various commitments being published regarding net zero targets - what should companies be doing or thinking about?

Achieving net-zero targets is an "easy win" for companies in that organisations can readily showcase the steps taken by them to reduce greenhouse gas emission and improve the environment i.e. the "E" in ESG. However, organisations should also focus on the "S" and "G" of ESG to entrench ESG holistically. Going forward, it is likely that organisations that have set ambitious ESG targets will be held accountable if they fail to achieve them, and that South Africa will experience a rise in greenwashing claims against these organisations.

With ESG being so broad - where should TMT companies focus first on the ESG journey?

There are multiple opportunities for TMT companies to move into the GreenTech space. From a compliance and reporting perspective, TMT companies seeking to improve their ESG strategies should look internally and externally to improve their ESG strategy and scoring.

From an internal perspective, we recommend that organisations embed sustainability metrics into the organisation with a "top-down" approach (for example, entrenching ESG into the organisation's constitutional documents first and then moving on to other operational documentation and procedures).

From an external perspective, organisations should determine whether they need to change how they operate to transition to a greener future (for example, using less water, using more renewable sources of electricity etc).

 



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