Tech & Sourcing @ Morgan Lewis

Our presenters will address certain recommended provisions for terms of service, relevant questions to ask and issues to consider when planning to enter a new geographic market, as well as recommendations on how to manage risk with expanded regulatory requirements.

As part of our Spotlight series, we welcome Todd Liao, a partner in our Shanghai office who works with clients on a wide range of complex commercial and financial transactions and legal issues involving China. Todd is a thought leader on issues facing tech firms doing business in China, recently publishing articles on new measures for online advertising in China, data privacy, and key drivers of Asia’s tech scene. We caught up with Todd to discuss data privacy regulations in China and cross-border data transfers.

The UK communications regulator and concurrent competition authority, Ofcom, announced on April 5 its proposal to refer the UK cloud services market to the Competition and Markets Authority (CMA) for further investigation. This coincided with publication of the interim report of Ofcom’s market study of the largest providers of cloud services (referred to by the authority as “hyperscalers”) in the United Kingdom’s £15 billion ($18.7 billion) cloud services market.

As noted in our recent blog posts, The Rise of Next-Gen Business Process Outsourcing and Key Contracting Issues to Consider, the core premise of next-gen business process outsourcing (BPO) includes (1) the leveraging of automation, bots, performance tools, and other technology to transform and optimize workflows and business processes and (2) the implementation of solutions to collect and analyze data to improve user experiences and business outcomes. Next-gen BPO drives the development and implementation of transformative technology and the generation of critical business data. As such, the identification of key intellectual property (IP) and the allocation of IP use and ownership rights invariably becomes a gating issue in contract structuring and negotiations.

The US Federal Trade Commission (FTC) recently proposed expanding its Negative Option Rule to all subscription agreements. Businesses offering subscription services would be required to make it at least as easy for consumers to cancel a subscription service as it is to sign up for it. For example, if a consumer can sign up for a service online, then the consumer must also be able to cancel it online in the same number of steps (and not be required to cancel in person).

Our recent blog post, The Rise of Next-Gen Business Process Outsourcing, highlighted the importance of understanding the exciting opportunities and the challenges of next-gen business process outsourcing (BPO) in order to effectively negotiate contract provisions that maximize the benefits of next-gen BPO and minimize the risks. In this blog, we take a look at a few key issues to consider when developing and negotiating a next-gen BPO contract.

Business process outsourcing (BPO) transactions are on the rise, with bullish forecasts from industry analysts including a projected revenue annual growth rate (CAGR 2023–2027) for the global BPO market of 6.48%, reaching a market volume of $450 billion by 2027 and global revenue exceeding $500 billion by 2030, and the North American market alone projected to achieve 8.9% CAGR 2023–2030.

The recent rise in popularity of generative AI–powered applications such as ChatGPT poses important copyright issues for individuals and businesses with respect to content creation, including the scope of rights with respect to commercial use, content publication, potential liability for infringement, and content enforcement.

The UK government published its first National Quantum Strategy (the Strategy) on March 15, setting out £2.5 billion (over $3 billion) in funding quantum research and naming a quantum computing industry as a strategic priority for the United Kingdom. The following day, the science and technology committee of the UK House of Commons (the Committee) announced a new inquiry on turning quantum technologies into commercial products. As quantum-focused startups proliferate, UK policymakers are demonstrating their intent to enable early-mover advantages in the sector.

The UK government published a white paper on March 29 setting out a “pro-innovation” UK regulatory framework for artificial intelligence (AI). The framework centers upon five cross-sectoral principles, of which implementation will be context-specific to the use of AI, rather than the technology itself. The government does not propose introducing a new regulator or any new legal requirements on businesses, instead leveraging existing powers of UK regulators and their domain-specific expertise.