How Today’s Technology is Influencing Tomorrow’s Compliance Structures

In our modern era, technology is moving much faster than human laws can regulate. And while we hope that tech companies will universally look out for consumer rights, this typically isn’t the case. In fact, it took the American government nearly 20 years after the internet’s inception to regulate it at all. To this day, all governments still struggle with how to regulate it. 

If history repeats itself, then it’s very likely that our consent laws will fall behind. They already have. With the advent of AI technology, artists and writers have to opt-out, rather than opt into technology that uses their work to train AI systems. They can do this thanks to legal loopholes.

Technology is only going to continue to move at a faster pace. If lawmakers want to stay ahead of the game, they need to become more responsive, proactive, and dynamic. Fortunately, multiple kinds of technology can play a role in our regulatory systems of tomorrow. 

The Three Principles for Regulation Tomorrow 

A fascinating paper by the American University Business Law Review created three principles for future regulation. These principles will likely shape how we’ll regulate new technologies. 

The Minimum Regulatory “Sandbox” 

The minimum regulatory sandbox was created by The Financial Conduct Authority (FCA), the financial regulatory body in the UK. This legislation allows Fintech companies to test out new technology-based ideas, even if they don’t meet applicable regulatory rules and regulations.

But to ensure tech companies don’t go overboard, the FCA declared some parameters: 

  • The duration of the test is limited to three to six months
  • The customer pool should be big enough to generate relevant data and information
  • Customers should be informed about the test, know the parameters, and be paid

In a sense, tech companies could violate some laws, but not every law. If these parameters made it to the US, companies couldn’t violate TCPA consent laws because consent is required.

According to the American University Business Law Review study, the Sandbox law has been pretty successful. Not only does this allow companies to test new ideas under discussion and democratic supervision, but it also allows the public to participate in regulatory debates. What results are more laws and regulations that suit the consumer, not the tech companies.

The Data-Driven Regulatory Intervention

It would be nearly impossible to regulate technology without technology. Our ability to gather and learn from real-time data is a thing we take for granted, but data isn’t being used to its full potential. With data, we can understand what, when, and how to regulate new technology.

As the American University Business Law Review study mentioned, a big reason why governments stay away from data-collecting, especially when it comes to creating regulations, is because the task is tedious. However, data can be used to predict when the next big thing will be, and that can save time. It’s also really easy to grab this data from American startups. 

If we switch to a data-driven regulatory system, we can:

  • Understand what technologies are up-and-coming. This allows governments to be more proactive and avoid time wasted on technologies that won’t make it to the market.
  • Understand when a regulatory investment should be made. If we use data in tandem with the sandbox regulation, we can actually know precisely when tech will come out.
  • Understand how to regulate based on demand. If a lot of people are showing interest in a tech product or service, then it would be worth it for governments to regulate it.

These steps would completely avoid the issues we’re seeing with AI technology, as we’d know why consumers want it to be regulated and when these regulations should come into place.

A Principle-Based Approach 

Tech is a global phenomenon, and even if it wasn’t, the laws that regulate it are. For example, the GDPR act that legislates the EU isn’t tied to EU countries. If an American business wants to sell to a person in an EU country and not get in trouble, they have to abide by these rules.

This phenomenon is why many lawmakers see legislation as competitive. The first country that makes fair, people-first legislation becomes the envy of other countries. Soon, lawmakers will have to adopt this new law or be left in the dust. A technology-first country has to be adaptable and flexible to compete, meaning finality and legal certainty have to become a thing of the past.

The quickness of technology should determine the quickness of legislation. If governments get something wrong, there’s no reason why they can’t change it. It shouldn’t be more difficult to change a law than it is to create a new one. This system will hurt every person on the planet.

If we adopt a principle-based approach, we can change compliance laws based on new data. This is much safer than “waiting and seeing,” which clearly hasn’t worked for modern legislation.

In Conclusion… 

Change is difficult for anyone to grapple with, but it’s an inevitability. Trying to fight how technology is shaping our world will mean that the wrong people will govern how it’s used.

There’s no doubt that we’re going to get a few things wrong, even with the three principles. But getting things wrong shouldn’t cause fear, as flexibility will make it possible for us to fix our mistakes. When any law is created, there will always be positive and negative consequences.

If any country wants to keep up with advancements in AI, new privacy laws, and the rights of workers/consumers, governments must play their part. Everyone benefits from a system that’s proactive in creating laws and regulations surrounding technology, so there’s no reason not to. 

After all, without some rules in place, our consent laws won’t be applicable in the new world. 

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