In 2021, regulators and policymakers around the world launched different regulatory initiatives on a wide range of topics from FinTech to crypto, privacy and artificial intelligence. In TechREG, we expect that many of these regulatory debates will transform into new laws and regulations in 2022.
These are our 10 predictions for new regulations in 2022.
Buy Now, Pay Later (BNPL): BNPL is becoming a popular alternative for payments at checkout for consumers of all ages, and this tendency is expected to continue in 2022. However, as an unregulated product in many jurisdictions, it has raised concerns among regulators who fear consumers can accumulate too much debt. In 2022, countries like the U.K., the U.S. or Australia are likely to take regulatory action. Most of the concerns are related to consumer protection, so it is unlikely that countries adopt outright bans; other alternatives such as better credit checks and purchase limits may be a preferred choice.
See Also: BNPL Under Global Regulatory Scrutiny, With UK as Likely Frontrunner
Real-Time Payments (RTP): The big alternative to card-based payments is taking off steadily but surely. For RTP to succeed, new networks need to be rolled out to connect financial institutions and merchants. This has already happened for a few years without the need for government intervention. However, to ensure that these networks are compatible, and they use standards and open APIs, regulators could step in.
Open Banking: More than 60 countries have adopted open banking initiatives, and this trend is likely to continue, either market-led or regulatory-driven. The U.K. is heavily involved in expanding the scope of open banking to create a new payment infrastructure and a new pool of data from which different actors may benefit. Europe is also preparing new legislation. The U.S., which doesn’t have a legal mandate to share data, may be considering some action through the Consumer Financial Protection Bureau to speed up the adoption of open banking.
See Also: UK Is Moving to Open Banking 3.0 — and It May Affect £7T in Payments
Stablecoins and CBDC: Central banks and regulators around the world are scratching their heads about how they can regulate private stablecoins to minimize potential systemic risks. While new regulations on cryptocurrencies and digital assets may come as a package including cryptos, tokens or NFTs, stablecoins are the real trigger for the regulatory push — and in 2022 we will see the first rules. CBDCs are the other side of the coin (pun intended). Digital currencies issued by central banks could provide a safer alternative to private stablecoins. While we can see new white papers or consultations on CBDCs, 2022 is unlikely to see finalized regulations around this issue by the major economies, except perhaps in China.
Big Tech: Amazon, Apple, Google and Meta will continue their battles with antitrust regulators and policymakers in 2022. In addition to the antitrust investigations targeting the App stores and possibly the online advertising business, 2022 is likely to bring new regulations that will limit the way these companies do business. Europe will likely adopt the new Digital Markets Act, the U.K. will adopt a new code of conduct, and the U.S. could also pass new legislation. Other tech giants in China, South Korea and elsewhere will face similar regulatory risks in their jurisdictions.
Gig Economy: The gig economy, and in particular gig workers, will likely see new regulations to protect their rights. The European Union has already started with a proposal for a new regulation that will give gig workers the status of employees and the right to challenge decisions taken by algorithms. The antitrust regulator is also proposing new rules to allow gig workers to unionize without breaching competition law rules. These proposals are likely to become legal instruments in 2022, and the famous “Brussels effect” may encourage other countries to enact similar rules. Most recently, in December, the U.S. National Labor Relations Board launched a consultation to reconsider gig workers’ status.
See Also: EU Gig Workers Could Be Reclassified as Employees
Data Regulation: Data is at the center of most regulations in the digital economy. Troves of data are collected by firms with any single customer interaction, and regulators may seek to provide more security to customers about what companies are doing with their data. In 2022 we can expect two levels of data protection regulations. On the one hand, the EU and the U.K., which have very strong data regulations, will likely seek to align their industrial policies in banking, finance and new technologies with these regulations to avoid friction. On the other hand, countries that haven’t yet adopted strong privacy and data protection rules will likely start proposing new ones.
Artificial Intelligence: In 2021, regulators made timid advancements to regulate artificial intelligence and algorithms. For instance, the European Union proposed a harmonization tool to ensure that member states have similar legal frameworks. The U.S. suggested that it may issue guidelines to ensure that algorithms don’t harm consumers. In 2022, it is likely that regulators will continue preparing the ground for more regulation, but we don’t expect comprehensive regulatory packages. Instead, we could see a few interventions in some sectors to avoid potential abuses in the use of algorithms, which can also be tackled with enforcement tools.
Metaverse: This is still far from the regulators’ radar, which may be a good thing for companies that would like to invest or to acquire other companies to set the path for future investments. The Metaverse includes several legal issues that will require regulation, especially related to ownership, but it is in a very early stage to raise concerns among regulators.
Internet of Things (IoT): This category includes wearables, autonomous vehicles, smart cities, etc. — all the things that will be connected to the Internet and provide valuable data. While it isn’t likely to see a single regulation for all these purposes, we could expect regulators adopting rules as the IoT deploys. This may include amendments to IP laws, data and privacy regulations, digital identity and authentication.
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