Fascinating article about a case in Japan which potentially will have a wide impact across social media platforms. Perhaps the impact will be less outside Japan and/or competition rules, but nonetheless it reminded me of two issues with which the US and the UK/EU have grappled. The ruling may open the door to those issues being grappled-with again.

First is the draft Regulation Automated Trading (commonly known as Reg AT). This is not the time or place for an in-depth review of Reg AT. It suffices to say that drafts contained an obligation on firms to disclose to the Commodity Futures Trading Commission (CFTC) its trading and platform algorithms, which proposal was exceedingly contentious and ultimately dropped by the CFTC. Exceedingly early discussion drafts of MiFID II contained similar provisions, but these were dropped before the drafts were finalised.

Second, in the context of the UK/EU, is the focus on what Charles Randall, then Chair of the Financial Conduct Authority (FCA) called "the algoracy" back in 2018. "Big Data" may be collected, disseminated and used in ways of which the data subjects are not aware, with negative consequences for them. I wrote extensively back then (and have written since) on the problems for firms posed by the FCA's position, including the seemingly impossible-to-reach thresholds of appropriate disclosure. Once again, this is not the time or place to rehash those issues in detail. It suffices to say that the FCA's aims seem to come from a 'good place' but as always is the case the reality of implementation is more complex.

For all that this Japanese case focuses on competition rules and P2P review websites, the (mis)use of automated decision-making, algorithms, artificial intelligence and machine learning in the broader financial services industry (including in the upcoming 'consumer duty' obligations in the UK and in the rules regarding best execution, conflicts of interest and senior management culpability) and the increasing number of products and services sought to be offered by or through social media platforms, very likely means that the discussion about 'disclosure' and 'disclosure to whom' is one which has not gone away.

Watch this space.