Snap is in trouble

Hi this is ZipLaw! This is our Roundup Newsletter where we run through all the top news stories of this past week and explain how they impact law firms.

Here’s what we’re serving today:

• Snap's AI data protection trouble
• Air France saves SAS
• Wind turbine producers are shutting down
• Chocolate is about to get really expensive. Here's why.
• Why are Indonesian IPOs booming?

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Snap's AI data protection trouble

In Short: Snapchat's in hot water with the UK's data watchdog over its AI chatbot's privacy risks.

Here's all you need to know.

1. Snap's Oopsie Moment:
Imagine launching a shiny new toy without reading the instruction manual. That's Snapchat with its AI chatbot, My AI.

The UK's Information Commissioner’s Office (ICO) is wagging its finger at Snapchat for not thinking through the privacy risks, especially for children aged 13-17. And given that nearly half of Snapchat's users in the UK are under 24, that's a lot of potential oopsies.

2. The Clock's Ticking, Snap:
Snap has until October 27 to charm the ICO with its side of the story. If they don't convince the watchdog, they might have to hit the pause button on My AI for UK users.

And, oh, there's a potential fine that could make even a billionaire's eyes water. We're talking up to 4% of Snap's global turnover or a cool £17.5m. Ouch.

3. The AI Behind the Drama:
The star (or villain, depending on how you see it) of this drama is My AI, powered by OpenAI’s GPT tech. When Snap launched it in the UK, it was the first time this kind of AI flexed its muscles in a major messaging platform. But with great power comes... well, you know the rest.

Snap's response? They're "closely reviewing" the situation and promise they did their homework before launching My AI. Let's hope for their sake that they've got a good tutor on speed dial.

⚖️ How does this impact Law Firms?

The cross-over between AI and data protection (and IP) will be one of the biggest legal trends in coming years. Large Language Models (LLMs) like ChatGPT are able to process huge amounts of data. That creates a whole host of problems for data protection principles such as data minimisation (i.e. how much data you collect and why do you need to process it).

Plus, AI models are prone to bias and discrimination which make data protection compliance even more problematic. So yes, watch this space. And this is what this means for law firms:

Data Protection:

• Privacy Impact Assessments: Lawyers in this department will be heavily involved in conducting thorough data protection audits and impact assessments for tech companies, ensuring that any new features or tools, like Snapchat's My AI, comply with data protection regulations, especially concerning minors. Children's data is also subject to stricter data protection requirements and if they process any sensitive data (e.g. health or biometric data) there's even tougher criteria to meet.
• Defence Against Regulatory Actions: If the ICO or any other regulatory body initiates proceedings against a company for potential breaches of data protection laws, these lawyers will be at the forefront, defending the company's actions and ensuring that they've adhered to all necessary protocols.

Commercial and Contract Law:

• Contractual Review and Negotiations: Lawyers in this department will be involved in reviewing and negotiating contracts between tech companies and third-party providers, like the licensing deal with OpenAI in the case of Snapchat. They'll ensure that terms are favourable, risks are mitigated, and both parties' interests are protected.
• Breach of Contract Claims: If there's an allegation that a party hasn't met its obligations, these lawyers will be either defending the tech company against such claims or pursuing breaches by third parties.

Consumer Rights and Litigation:

• Consumer Complaints and Redress: With potential risks to users, especially minors, lawyers specialising in consumer rights will be advising companies on how to handle complaints, offer redress, and ensure they're compliant with consumer protection laws.
• Defence Against Consumer Class Actions: If a group of consumers feels their rights have been infringed upon, they might initiate a class action. Lawyers in this department will defend the company against such collective actions, managing litigation risks and potential reputational damage.

Air France saves SAS

In Short: SAS AB, the bankrupt Scandinavian airline, just got a $1.18 billion lifeline from Air France-KLM and Castlelake LP.

1. The Dating Game:
Imagine SAS AB as the most eligible bachelor in the airline world. After a tumultuous year (thanks to Covid-19 and striking pilots), they were looking for a rebound.

Enter Air France-KLM, sliding into SAS's DMs with a cool $144.5 million, hoping for a 19.9% stake in the company.

2. The New Power Couples:
Europe's aviation scene is turning into a reality TV show with tons o airlines coupling up. Air France-KLM isn't just wooing SAS; they're also eyeing Portugal's TAP. Meanwhile, IAG is making moves on Spain’s Air Europa, and Lufthansa is flirting with Italy’s ITA Airways.

It's like "Love Island" but with airplanes. And the alliances? SAS is ditching Lufthansa's Star Alliance to join the SkyTeam union, co-founded by Air France. It's the equivalent of switching from Team Edward to Team Jacob.

3. Shareholder Drama:
The plot thickens. SAS's reorganization will wipe out its current shareholders, including the governments of Sweden and Denmark. Ouch. It's like being voted off the island.

But, there's a silver lining. SAS gets a fresh start, shedding a whopping 20 billion Swedish kronor ($1.8 billion) in debt. And with new partners like Air France-KLM and Castlelake LP, they're set to make a grand comeback. Think of it as a glow-up after a bad breakup.