the data economy - f.datasrvr.com · 1105 - 1130 big data and antitrust: competition law issues in...
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The Data Economy Wednesday 8 May 2019
Agenda 0900 - 0915 Welcome and introduction
0915 - 0940 New infrastructures in the data economy: Impact of Greater Bay Area
initiative, smart cities, autonomous mobility and more
0940 - 1005 AI & Blockchain: New Technologies benefiting from and enabling the data
economy
1005 - 1030 Impact of data privacy: Cybersecurity/ data localisation/ data surveillance/
data ethics
1030 – 1040 Coffee break
1040 - 1105 Doing deals in the data economy: The role of data in tech transactions and
the impact of data transfer on the restructuring of groups
1105 - 1130 Big data and antitrust: Competition law issues in the data economy
1130 - 1155 Future of work in the data economy: Employment issues in the data age
1155 - 1205 Coffee break
1205 - 1230 Open data and its impact
1230 - 1300 Digital taxation
Lunch Keynote with Rob Koepp, Director of The Economist Corporate Network in
Hong Kong
Welcome and Introduction
Raffaele Giarda Global Chair, TMT Group Rome
Paolo Sbuttoni Partner Hong Kong
New infrastructures in the data economy: Impact of Greater Bay Area initiative, smart cities, autonomous mobility and more
Raffaele Giarda Global Chair, TMT Group Rome
Jennifer Trock Partner Washington DC
Rico Chan Partner Hong Kong
Liability and
Insurance
Where are we? Volume deployment at least
10 years away
ADS equipped vehicles
developed over the next 2
years
Testing takes the form of
on-road testing and
simulation miles
Civil negligence
Criminal liability
Contractual liability
Insurance
Regulatory
Trends M2M Communications
IoT applied to cars
Ethics based regulation
Harmonizing solutions
Regulatory
trends to watch Balance of top-down and
industry-led regulation
Adaptation of road laws
Connectivity standards
Blockchain: New technologies benefiting from and enabling the data economy
Sue McLean Partner London
Gavin Raftery Partner Tokyo
Dominic Edmondson Associate Hong Kong
©2019 Baker McKenzie
Models
7
A centralised system
Model 1
Current
system
An open network that anybody can
access. The digital ledger of transactions
is shared, transparent and run by all
participants
Model 2
Public blockchain
(permissionless)
Model 3
Private blockchain
(permissioned)
The preferred option of most regulated
entities. It is a private system which
controls access to certain invited
participants.
Impact of data privacy: Cybersecurity/ data localisation/ data surveillance/ data ethics
Jay Ruan Partner Shanghai
Paolo Sbuttoni Partner Hong Kong
Michael Egan Partner Chicago
Anne Petterd Partner Singapore
Francesca Gaudino Partner Milan
Impact of
new legislation
Cybersecurity
Data Localization
Data Surveillance
Data Ethics
Interplay between
privacy consumer
and antitrust law
Commercial
aspects
China
perspectives
Impact
on Csuite
Data
ethics
Cybersecurity
+ vigilance
Impact of Data Privacy
Doing deals in the data economy: The role of data in tech transactions and the impact of data transfer on the restructuring of
groups
Kirsty Wilson Partner London
Rob Wright Partner Hong Kong
Darcy Down Partner Chicago
Tracy Wut Partner Hong Kong
Delivering a successful integration
Project Team
Cultural impact Clarity
around
integration
objectives
Clear
direction
Implement all
encompassing
communication
strategy
Compliance
and Code of
Conduct
IT systems
Incentives and
harmonisation of
terms and
conditions Resources
and cost
Align with
integration
timeline
Conflicts with
business
priorities
Financial
Reporting
Employees
and unions Between
work-
streams
Market
profile
Senior
champion
Balanced
integration
team
Align with
acquisition
objectives Don’t over
estimate
synergies
Minimise
opportunity for
competitors
Prioritise
objectives
Retention of
talent and
institutional
knowledge
Fiscal
efficiencies
Achievable
deadlines
Resources
not just a
30 day
plan
Strong and
relevant
project
management
Minimise
distraction to
the day to
day business
Top down
Clear,
frequent and
consistent
Successful
Integration
Big data and antitrust: Competition law issues in the data economy
Sam Mobley Partner London
Carolina Pardo Partner Bogota
Stephen Crosswell Partner Hong Kong
Antitrust Plus
Exploring platform dominance and data
advantage/power
Interest in mergers of datasets and the hunt for
killer acquisitions
Scrutiny of e-commerce/online when reviewing distribution
practices
Appetite to assess new ways of interacting
with competitors: AI and online collusion
The Global Antitrust Spotlight
Focus on adapting to
tackle the new digital reality: data, tech and
platforms
©2019 Baker McKenzie
Agencies grappling with digital: Americas, Asia Pacific and Europe
©2019 Baker McKenzie
Regulation and Antitrust reform
15
Reversing the
burden of proof –
e.g. for 'defensive'
acquisitions of
start-ups
Enhanced data
access to allow
switching and
interoperability to
open up secondary
markets
Less emphasis
on traditional
market definition
analysis
- EU Reg on platform
fairness (P2B)
- UK proposal for Code of
Conduct for companies with
Strategic Market Status
REGULATION / ANTITRUST REFORM
Regulation
/ Antitrust
reform? Exclusionary Behaviour
Anticompetitive mergers
Collusion risks
UNDER DISCUSSION BY
REGULATORS CLOSER SCRUTINY IS
ON THE CARDS…
Data-driven deals:
- Consider 4Vs for measuring 'data advantage’
- Internal documents may tell the story…
Data sharing / pooling :
- Exchanging competitively sensitive info
- Freezing out rivals
Platforms and competition ‘for the market’:
Multi-homing, switching, complementary
services – all under protection
Compliance and advocacy:
Many regulatory and antitrust options being
considered
Future of work in the data economy: Employment issues in the data age
Fermin Guardiola Partner Madrid
Meredith Kaufman Partner New York
Rowan McKenzie Partner Hong Kong
©2019 Baker McKenzie
Future of work in the data economy
17
Open data and its impact
Manuel Lorenz Partner Frankfurt
Karen Man Partner Hong Kong
Anne-Marie Allgrove Partner Sydney
Adrian Lawrence Partner Sydney
©2019 Baker McKenzie
Open Data
19
Account + Transaction Data
Access Seeker Key Issues
Accreditation process
Reciprocity
Complexity of rules
Ease of access to data
Key Issues
Who is covered?
What data is covered?
Liability
Cost of implementation
Data Holder
Key Issues
Consent + Knowledge process
Control of “own” data
Access to services and choice
Customer
API Access to data Accreditation Body
Regulator(s)
Consent
Services
Consent + Access Request
Primary Aims Facilitate Innovation and Competition
Promote Customer Choice
Maintain Privacy and Security
Digital taxation
Kate Alexander Partner London
Dominika Korytek Partner San Francisco
Carrie Lui Associate Hong Kong
©2019 Baker McKenzie
The long tail of BEPS Action 1
21
Jun
2016 2017
Apr
2018
Oct
2018
Jan
2019
Mar
2019
Jun
2019 2020
Oct
2015 2013
OECD Task
Force on the
Digital Economy
(Task Force)
formed
Inclusive
Framework
formed
Interim
report
released
OECD Policy
Paper released
and update
from Task
Force
Osaka
G20
Meeting
BEPS Action 1
final report
released
Task Force
re-formed
UK DST
announced
Update on
progress by
Task Force
OECD
Consensus
solution
expected
©2019 Baker McKenzie
OECD Consultation – current proposals
22
Pillar I Proposals
User Participation
• Nexus based on the existence of active user engagement
Marketing Intangibles
• Allocation of some return to the market state (above and beyond the ALP result)
• Multiple variations and levers
Significant Economic Presence
• Nexus based on "a purposeful and sustained interaction with the jurisdiction via digital technology and other automated means."
Pillar II Proposals
Income Inclusion Rule
• Tax on income of foreign branches or controlled entities if subject to a low ETR
• Styled as a minimum tax; draws on aspects of GILTI
Tax on Base Eroding Payments
• Undertaxed Payments Rule denies deduction for related party payments not subject to a minimum ETR
• Subject to Tax Rule denies tax treaty benefits for undertaxed payments
The new politics: a path to
consensus?
©2019 Baker McKenzie
Different approach across the world
23
United States
Base erosion and anti-
abuse tax (“BEAT”)—
minimum tax of 5% for
2018, 10% for 2019-24,
and 12.5% for 2025 and
after
United Kingdom
DST potentially from April
2020
France
Potential tax on
highly-digitalised
enterprises from
January 2019
Spain
Temporary tax
on digital
company
revenue
considered for
2019 Italy
Tax on digital
services expected
to enter into force
in 2019
India
From 1 June 2016, 6% "equalization levy" imposed on payments to non-
residents for digital advertising services
Taiwan
30% "deemed profit“
from digital supplies for
an effective rate of 3%
or 6% effective from
2017
Malaysia
Service tax will apply to
Business-to-Business imported
taxable services via a reverse
charge mechanism from 1
January 2019.
Service tax will apply to
Business-to-Consumer digital
services provided by foreign
service provider by requiring the
foreign service provider to
register and collect service tax.
This will take effect from 1
January 2020
Indonesia
Proposals to tax foreign
e-commerce businesses are being
considered, including requiring a local
entity to be incorporated and introducing
a VAT on all e-commerce transactions
Singapore
GST will apply on
imported services
from January 2020
Australia
Senate has expressed not to support a
3% digital focused levy
©2019 Baker McKenzie
Comparison of proposed unilateral measures
EQ. LEVY
Withholding
taxes
TAIWAN
ISRAELI WEB PE INDIAN SEP
AUS MAAL /
UK DPT
Alternative
applications of the
PE threshold
US GILTI/BEAT
Specific regimes targeting
large MNEs
UK DST
EU DST / FRENCH THDE /
ITALIAN DST
Turnover taxes
Keynote from Rob Koepp, Director of The Economist Corporate Network in Hong Kong
©2019 Baker McKenzie
Comparison of proposed unilateral measures
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The Data Economy Wednesday 8 May 2019