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Baker McKenzie Technical Disruption Round Table Highlights That Increasing Business Complexity is More Than an Augmented Reality

DSA attended a media round table with international law firm Baker McKenzie to discuss their findings in the recently published Asia Pacific Business Complexity Survey, which was made available at their technology conference which took place in KL on 16th Jan in Bangsar South.

The survey itself makes an interesting reading with insights and stats that cover many areas across Tech, Media and Telco (TMT) industries. At a high level, the survey confirms that 89% of corporate executives believe that their sectors will experience major technical disruption in the next two years and 78% expect that innovative, transformative technology will be the leading business complexity for them over the same time period.

The survey is well worth a read and can be downloaded here.

For DSA, we had the opportunity to spend nearly a couple of hours in a round table session with some of the Baker McKenzie team, including Adrian Lawrence, a partner from the Sydney office who heads the Asia Pacific TMT industry group, Anne Petterd, Principal at the Singapore Office, Kherk Ying Chew, a partner from the KL office who heads the IP and Dispute Resolution Practice, Ken Chia, Principal at the Singapore office and an expert in IP and commercial competition law matters, and Brian Chia, a partner at the KL office who heads the Corporate Commercial and Securities Practice. Clearly the table was loaded with a daunting amount of brain power and experience.

Adrian Lawrence

Anne Petterd

Kherk Ying Chew

 

Ken Chia

Brian Chia

What became clear is that even with all this experience, disruptive technology, such as AI, Big Data and Augmented Reality, is moving at such a fast pace that its impact on regulation, compliance and even line of business decision-making is becoming increasingly hard to monitor and control. The experts around the table didn’t pretend to have all the answers, and that was possibly the largest takeaway that DSA took from the round table session.

Increasingly complex challenges, risks and compliance issues are being thrown in the way of business due to disruptive technologies and everyone’s attempts to become “data driven” in order to survive. Just as important, the lines of how to navigate to stay compliant or minimise risk are perhaps more blurred than they have ever been before. In some ways, this is manor from heaven for a company like Baker McKenzie who have the people working round the clock to solve these questions for major clients all over Asia Pacific.

Some of the discussion topics which demonstrated just how complex technology is making life for the TMT sector included the idea of AI and Liability. Baker McKenzie explained that during their conference, one of the most trending questions that was raised was around this area. The example they provided was if an AI-powered driverless vehicle is involved in an accident, who is liable. To be clear, AI is more than just machine learning. Pre-programmed algorithm through AI mimics thought, learns to make decisions and even develops its own personality via constant learning. Adrian Lawrence raised the point that we (humans) already accept that companies are treated as legal entities. Thus, we need to be open to the possibility that AI may eventually be treated in the same way. It’s fascinating stuff, leading to the possibility that an AI implementation could own its own IP and be legally liable for the decisions it makes.

DSA did not agree with the Baker McKenzie panel about the rate at which AI will pose problems. We feel the rate of learning of AI will mean that it takes hold faster than regulators, risk managers and lawyers can cope, while the Baker McKenzie assembled talents felt it will be more manageable. Either way, the point is that AI will become part of many businesses, if not all business, over time and understanding what that means from a liability and risk point of view is far from clearly defined. In fact, one might argue that it is being defined as we go, therefore seeking expert advice around these difficult questions will be critical for companies of any size.

Coming "back down to earth", the conversation moved on to the General Data Protection Regulation (GDPR). If you have not yet come across this four-letter acronym, trust me that they are about to become a thorn in the side of any organisation that does business in Europe or with European companies. The GDPR is a set of laws designed to protect the security and privacy of EU citizens’ personal data that comes into effect in May of this year. In answer to the straight question, “Are Asian businesses ready for GDPR?”, we got a very straight answer from the Baker McKenzie people at the table, “No!”.

Delving a little deeper, it is not an outright no, with Anne Petterd explaining that some companies are more prepared than others, especially local subsidiaries with European HQs. However, on the whole, the feeling is that far too many Asian companies really don’t understand the impact this regulation will have over here. There’s a number of clearly defined examples of exactly how GDPR will have an effect, but even if you have no link to Europe other than having B2B relations with European companies, be ready for them to ask if you are GDPR compliant and lose them as customers if you are not.

In terms of personal data privacy and security, Brian Chia pointed out that irrespective of the European legislation, regulators and government in countries such as Malaysia are starting to take protection of personal data very seriously. His point is that local lawmakers really are committed to protecting citizens from data breach and data abuse. His advice is that businesses need to take this seriously – if they hold data on people, they have to be cognisant of data protection and privacy requirements or find that they will increasingly fall foul of the law.

DSA questioned the Baker McKenzie experts whether the pace of change of technology will ultimately mean that regulation and more specifically, regulators, will become irrelevant. Our point being that regulators have to work through a judicial process that is simply too slow to keep up with the pace of technological change. By the time regulation is implemented, technology has moved on and made the regulation irrelevant. Adrian cited blockchain (the technology that underpins cryptocurrencies) as an example of technology regulating itself, but ultimately fell back to the fact that regulators are catching up with this technology and are starting to add layers of regulatory protection around the technology already.

The general consensus from the experts around the table was that there has always been a lag between change and regulation catching up, and they don’t see that is any different with the disruption we are seeing today. On that point, DSA will have to differ. We believe the rate of change driven by new disruptive technologies is faster than the world has ever known and if regulators don’t change their approach, we may be in for some problems!

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