Robert Stines
- Apr 4, 2019
- 3 min read

The Digital Revolution

After the TechLaw Institute 2019 conference, I was left wondering what the future of commerce will look like in 5 to 10 years and how the law will keep pace. Judging from the attendees at the conference, the in-house legal departments at many companies are having the same thoughts.

General Counsel made up 75% of attendees at the conference, and only 12% were outside counsel at private law firms. This implies that GCs are concerned about the challenges their companies will face with emerging technologies, new regulations, and how we conduct business.

Emerging Technologies Keep Me Up At Night

What are the issues in emerging tech that GCs are thinking about? Everything I've been writing about - Internet of Things ("IoT"), Artificial Intelligence ("AI"), Biometrics, Blockchain, Privacy, Cybersecurity, and risk allocation and insurance. It is interesting to think that some of these technologies were not viable ten years ago, which means they are developing at exponential rates.

To be clear, these emerging technologies do not discriminate against any specific industry or sector. IoT, AI and Blockchain will become fundamental technologies, similar to email, that will impact all industries. One panelist at the conference mentioned that he cannot think of any industry that will remain unaffected by the digital revolution. This sentiment is echoed by Amy Hess, the new head of FBI’s criminal, cyber, response and services branch, when she stated that cyber is the “future of the world.”

All of these technologies are interrelated and rely on the Internet. The IoT will provide volumes of data for AI to develop. With the development of AI, we will see more applications for Blockchain, which will ease the adoption of cryptocurrencies. Biometrics will impact security and the use of the IoT, which will again provide data for AI. None of which is possible without the Internet

Emerging Tech and Risk Allocation

The IoT, AI and Blockchain will also have an impact on liability paradigms and risk allocation. The FBI is concerned that cyber criminals pose a threat to lives, property and critical infrastructure.

From a civil liability perspective, it is now proven that cyber events can lead to physical and financial harm. How are companies to prepare for such claims and lawsuits? This is where companies need to consider risk allocation through indemnification provisions in contracts with partners, providers, and vendors. Also, insurance will pay a major role in mitigating risk.

Emerging Tech and the Law

With these innovations, we will see the need for regulation. Too much regulation, however, will stifle innovation, which means we need balance between the two.

A great example of the relationship between innovation and regulation is AI and privacy. For AI and machine learning to develop, they need to access volumes of data about almost everything. Data, however, is being protected by privacy regulations. In countries where there are little or no privacy regulations, such as China, AI is being developed at a more rapid pace than the US and Europe. Some are concerned that if China takes the lead in AI, they will become the next super power in technology, commerce, and military might.

Emerging Tech and Privacy

With regard to privacy, the California Consumer Privacy Act ("CCPA") will have a major impact on the nation and many believe it will have negative consequences. The session on the CCPA highlighted some of the problems with the law that will become effective on January 1, 2020. If it is enacted as currently drafted, we could see the first wave of class actions under the CCPA on January 2.

The irony is that the negative consequences of the CCPA might become the catalyst for congress to finally enact a federal privacy law that will preempt the laws of each state.