February

Information Commissioner’s foreword

Data sits at the heart of the digital services children use every day. From the moment a young person opens an app, plays a game or loads a website, data begins to be gathered. Who’s using the service? How are they using it? How frequently? Where from? On what device?

That information may then inform techniques used to persuade young people to spend more time using services, to shape the content they are encouraged to engage with, and to tailor the advertisements they see.

For all the benefits the digital economy can offer children, we are not currently creating a safe space for them to learn, explore and play.

This statutory code of practice looks to change that, not by seeking to protect children from the digital world, but by protecting them within it.

This code is necessary.

This code will lead to changes that will help empower both adults and children.

One in five UK internet users are children, but they are using an internet that was not designed for them. In our own research conducted to inform the direction of the code, we heard children describing data practices as “nosy”, “rude” and a “bit freaky”.

Our recent national survey into people’s biggest data protection concerns ranked children’s privacy second only to cyber security. This mirrors similar sentiments in research by Ofcom and the London School of Economics.

This code will lead to changes in practices that other countries are considering too.

It is rooted in the United Nations Convention on the Rights of the Child (UNCRC) that recognises the special safeguards children need in all aspects of their life. Data protection law at the European level reflects this and provides its own additional safeguards for children.

The code is the first of its kind, but it reflects the global direction of travel with similar reform being considered in the USA, Europe and globally by the Organisation for Economic Co-operation and Development (OECD).

This code will lead to changes that UK Parliament wants.

Parliament and government ensured UK data protection laws will truly transform the way we look after children online by requiring my office to introduce this statutory code of practice.

The code delivers on that mandate and requires information society services to put the best interests of the child first when they are designing and developing apps, games, connected toys and websites that are likely to be accessed by them.

This code is achievable.

The code is not a new law but it sets standards and explains how the General Data Protection Regulation applies in the context of children using digital services. It follows a thorough consultation process that included speaking with parents, children, schools, children’s campaign groups, developers, tech and gaming companies and online service providers.

Such conversations helped shape our code into effective, proportionate and achievable provisions.

Organisations should conform to the code and demonstrate that their services use children’s data fairly and in compliance with data protection law.

The code is a set of 15 flexible standards – they do not ban or specifically prescribe – that provides built-in protection to allow children to explore, learn and play online by ensuring that the best interests of the child are the primary consideration when designing and developing online services.

Settings must be “high privacy” by default (unless there’s a compelling reason not to); only the minimum amount of personal data should be collected and retained; children’s data should not usually be shared; geolocation services should be switched off by default. Nudge techniques should not be used to encourage children to provide unnecessary personal data, weaken or turn off their privacy settings. The code also addresses issues of parental control and profiling.

This code will make a difference.

Developers and those in the digital sector must act. We have allowed the maximum transition period of 12 months and will continue working with the industry.

We want coders, UX designers and system engineers to engage with these standards in their day-to-day to work and we’re setting up a package of support to help.

But the next step must be a period of action and preparation. I believe companies will want to conform with the standards because they will want to demonstrate their commitment to always acting in the best interests of the child. Those companies that do not make the required changes risk regulatory action.

What’s more, they risk being left behind by those organisations that are keen to conform.

A generation from now, I believe we will look back and find it peculiar that online services weren’t always designed with children in mind.

When my grandchildren are grown and have children of their own, the need to keep children safer online will be as second nature as the need to ensure they eat healthily, get a good education or buckle up in the back of a car.

And while our code will never replace parental control and guidance, it will help people have greater confidence that their children can safely learn, explore and play online.

There is no doubt that change is needed. The code is an important and significant part of that change.

Elizabeth Denham CBE

Top scientists to be given fast-tracked entry into the UK.

• Top scientists and researchers to be given fast tracked entry to the UK
• No cap on who can benefit
• £300 million made available for research into advanced mathematics

A new, fast-track visa scheme to attract the world’s top scientists, researchers and mathematicians will open on 20 February.

This follows a commitment by the Prime Minister last summer to put science, research and innovation on the top of the government’s agenda.

The bespoke Global Talent route will have no cap on the number of people able to come to the UK, demonstrating the government’s commitment to supporting top talent.

The Prime Minister, Boris Johnson, said:

The UK has a proud history of scientific discovery, but to lead the field and face the challenges of the future we need to continue to invest in talent and cutting edge research.

That is why as we leave the EU I want to send a message that the UK is open to the most talented minds in the world, and stand ready to support them to turn their ideas into reality.

The Global Talent route replaces the Tier 1 (Exceptional Talent) route and for the first time UK Research and Innovation (UKRI) will endorse applicants from the scientific and research community. The route will:

• provide for a brand new fast-track scheme, managed by UKRI which will enable UK-based research projects that have received recognised prestigious grants and awards, including from the European Space Agency and the Japan Science and Technology Agency, to recruit top global talent, benefiting higher education institutions, research institutes and eligible public sector research establishments - this will enable an individual to be fast-tracked to the visa application stage
• double the number of eligible fellowships, such as Marie Skłodowska-Curie Actions, the European Research Council and Human Frontier Science, which also enable individuals to be fast-tracked
• continue to ensure dependents have full access to the labour market
• preserve the route’s flexibility by not requiring an individual to hold an offer of employment before arriving or tying them to one specific job
• provide an accelerated path to settlement for all scientists and researchers who are endorsed on the route
• provide for an exemption from our absences rules for researchers, and their dependants, where they are required overseas for work-related purposes, ensuring they are not penalised when they apply for settlement

The changes are part of the initial-phase wider reforms to enable those with world class skills in science and research to come to the UK as soon as possible.

The Home Secretary, Priti Patel, said:

The UK is a world leader in science, with research and innovation that changes lives being undertaken every day in this country.

To keep the UK at the forefront of innovation, we are taking decisive action to maximise the number of individuals using the Global Talent route including world-class scientists and top researchers who can benefit from fast-tracked entry into the UK.

The reforms to the Global Talent route coincide with ambitious government investment of up to £300 million to fund experimental and imaginative mathematical sciences research by the very best global talent over the next five years.

With around £60 million funding available per year, the investment will double funding for new PhDs, as well as boost the number of maths fellowships and research projects – increasing the pool of trained mathematicians in the UK and providing more freedom for researchers to develop new ideas.

This funding will make sure the UK remains at the cutting edge of maths research, underpinning real-world technological developments, from smoother traffic flow, crime prevention, safer air travel, and smarter phone technology to the use of artificial intelligence and creating greener energy systems.

Business and Energy Secretary Andrea Leadsom said:

Leaving the EU gives us new freedom to strengthen research and build the foundations for the new industries of tomorrow.

By attracting more leading international scientists and providing major investment in mathematics, we can make the UK a global science superpower and level up our country.

The funding forms part of the government’s ambitions to considerably boost research and development spending and establish the UK as a global science superpower, changing the way people live, work and travel.

To ensure the UK is the best place in the world for research and development, the government is launching a major review of research bureaucracy and methods, including unnecessary paperwork, arduous funding applications and research selection processes. This will free up and support the best researchers to focus on groundbreaking, ambitious and meaningful research that goes on to cure diseases or improve our transport networks.

UKRI is already taking steps to reduce bureaucracy, and in the coming weeks the government will be consulting world-leading scientists, researchers, academics and industry figures on what more can be done. As part of this, UKRI will simplify the process to apply for funding, removing the unnecessary requirement to precisely forecast the long-term benefits of projects with unpredictable results.

An ambitious Place Strategy for UK research and development will also be published in the summer to ensure funding builds on strengths of the regions. In addition, this year the government will examine how the UK’s catapult centres can strengthen research and development capacity in local areas, improving productivity and contributing to greater prosperity across the UK.

UK Research and Innovation Chief Executive, Professor Sir Mark Walport, said:

Today’s announcements further underline the importance of research and innovation to the future success of the UK and the government’s continued commitment and investment.

Working with the government, UK Research and Innovation is ensuring that the UK remains a globally leading environment for research and innovation.

Our ambition is clear: to create a stronger research and innovation environment that is focused on supporting talented people and realising the full potential of their work.

Professor Julia Buckingham, President of Universities UK and Vice-Chancellor of Brunel University London, said:

We share the Prime Minister’s vision to position the UK as a magnet for global science and research talent. The Global Talent visa is a positive step towards this for UK universities. The visa route will help to ensure that universities can attract the brightest scientists and researchers to the UK with minimal barriers.

Universities are globally connected and this announcement signals that the UK remains open to talent from around the world. Our universities carry out life-changing research and our knowledge base, economy, and wider society will benefit from the international staff we can attract through this visa route.

The government continues to work closely with the scientific community in developing its proposals and to ensure the UK immigration system attracts the sharpest minds and scientific talent.

The Immigration Rules to bring the visa changes into effect will be made on the 30 January 2020 and come into effect on the 20 February.

Frustrated with federal inaction, California aims to build a “mini” version of a federal agency that is tasked with consumer protection.

Billing it as California’s version of the Consumer Financial Protection Bureau (CFPB), Governor Gavin Newsom revealed in his proposed 2020-2021 state budget that the new entity — a Department of Financial Protection and Innovation — intends to “cement California’s consumer protection leadership amidst a retreat on that front by federal agencies including the [CFPB]” and “provide consumers greater protection from predatory practices.”

Richard Cordray, one of the architects of the proposal and the first director of the federal CFPB, told Yahoo Finance that the state’s move is monumental.

“California really is a very influential policymaker when it wants to be,” Cordray said in an interview. “This is a major, major initiative that will make a big difference, not only in California — certainly in California — but also nationally.” 

Newsom revealed his overall budget proposal in late January, which includes the new CFPB proposal. More details were introduced in the state legislature on Feb. 1, in the form of a “trailer bill.”

The bill was clear in laying out its purpose.

“The lack of a single regulatory body over providers of financial products and services in California leaves California consumers vulnerable to abusive financial products and practices,” the budget stated. “Unfair, deceptive, or abusive practices in the provision of financial products and services undermine the public confidence that is essential to the continued functioning of the financial system and sound extensions of credit to consumers.”

The proposal pushed for consumer financial protection laws and the new agency. Revisions by the Assembly and the Senate will be decided by June 15, and the bill would then go back to Newsom for his review (i.e. to sign or to veto).

‘There wasn’t a need for this 50, 60 years ago’

The need for a consumer watchdog in the first place was due to the stunning increase in the use of credit, Cordray explained.

“Things have changed dramatically in the last two generations, in terms of the financialization of our lives… People use credit cards more than ever, mortgages… And student loans have proliferated to a degree that they didn't exist 25 years ago,” he said, stressing that Americans overall are “carrying much more debt.” 

But when they run into problems with these financial products, “they're often facing off against big financial companies,” Cordray explained. “And people can get very frustrated when they feel they're being treated unfairly and there's nothing much they can do about it.”

That’s where an entity like the federal or state CFPB steps in to help these consumers out, he added: “There wasn't a need for this 50, 60 years ago to anything like the degree there is a need today.” 

The bottom line for creating such an agency, he said, is to make “sure people are protected, that they're treated fairly, that things are being disclosed properly, so they can make good judgments about the choices they make on their financial lives.”

‘Plugging the gap’ left by the Trump administration

Two factors propelled the California’s mini-CFPB initiative into Newsom’s orbit.

First, the governor is relatively new — Newsom took office in January 2019 — and entered office deeply interested in consumer issues.

“When he was mayor of San Francisco, he tried to do an initiative to outlaw payday lending... and during his inauguration speech, he also talked about predatory lenders, and they have always been on Governor Newsom's mind,” Jan Lynn Owen, the former Commissioner of the California Department of Business Oversight and currently a senior advisor with Manatt, Phelps & Phillips, told Yahoo Finance. 

The second was the rapidly growing concern overall, over who was enforcing consumer protection laws.

“Things have changed in ways that leave consumer advocates very concerned,” Cordray said. “And plugging the gap that's left is especially important.”

Owen noted that Newsom “is focused and he understands the issue, which is pretty, pretty wonderful...  [and] Governor Newsom thinks that it's now time… as the Trump administration continues to undermine and weaken rules at the federal level.”

In a statement to Yahoo Finance, Gov. Newsom responded: “As the Trump administration undermines and weakens the rules that protect consumers from predatory businesses, California is filling the void and stepping up to protect families and consumers.”

California Assemblymember Monique Limon, who had previously introduced similar-minded legislation, and co-authored a “Student Borrower Bill of Rights” or AB 376, told Yahoo Finance that the effort was driven by the fact that “we wanted to do something to advance the consumer protections in the absence of the federal government being able to.”

Back in D.C., California Rep. Katie Porter cheered on the effort: “We need a strong Consumer Financial Protection Bureau that will protect everyday Americans from the predatory practices. This is an issue that affects the daily lives of all Americans, regardless of race, income level, or background. When the federal CFPB refuses to do its job, it’s up to states like California to make sure people aren’t getting cheated.”

The CFPB did not respond to a request for comment.

What does this mean for consumers?

So how exactly does this affect American consumers?

For student loan borrowers in California, for example, this move adds oversight into their lenders, servicers, debt collectors, and more — which consumer advocates hail as a win.

“California’s response is a lesson in the power of public policy to improve student loan borrowers’ lives,” former CFPB Ombudsman Seth Frotman, who now leads the Student Borrower Protection Center, said in a previous hearing. “But more than that, it can create a roadmap for how the government oversees all of consumer finance. It can provide the blueprint for California to build an oversight framework that matches the complexity and nefariousness of a financial sector that seems to know no bounds.”

For people like Limon — who said she’s fielded calls from constituents who have been scammed or defrauded and didn’t know where to go — the new agency represents a consistent way to screen the volume and the types of predatory practices that consumers were reporting to address existing issues and prevent abuses from taking place.